My “Extreme” Credit Card Free Lifestyle

Now that my husband and I have lived for ten years with zero credit cards, I can confidently say this life is not only possible, but preferable for us.

First let me give you my definition of credit card because I don’t want to lose you right away. A credit card is a little piece of plastic that allows you to borrow money for about a month (usually longer), and make a payment (or many payments) to pay off the balance of the card in the future, with interest. Sometimes they have fees, and sometimes they have rewards or points, but in general the principle is the same.

What I am NOT talking about are debit cards. Debit cards have the same brand names as credit cards, ie they are underwritten by the likes of Visa or Mastercard, but they enjoy the special distinction of being linked to your bank account, with money you’ve already earned being pulled out directly when you make a purchase. We DO use debit cards.

But wait, don’t you NEED a credit card? You can buy some things with a credit card that you cannot buy with a debit card, right? In my experience, there is literally NOTHING I cannot purchase. With my debit card alone, I have purchased everything I have required over the course of the last decade. This of course includes swiping at the gas station pump, all the stores, and everything online my heart desired. Also the big ticket items: flights, a rental car, a hotel room, a bed and breakfast suite, a hot air balloon flight. We funded our elegant wedding only through a debit card, as well as a honeymoon in Napa Valley. All our vacations, weekend getaways, and a road trip to see the Eclipse have been entirely on the debit card (or cash). We have paid exorbitant vet visits, car insurance, and all the expenses related to a house, including repair work, all new windows, and property taxes.

I have found nothing and no one who will not accept a debit card (or cash!) in lieu of a credit card. Actually, most establishments will not notice you are handing them a debit card. The only time it is even slightly less convenient than a credit card? The fancy hotel or rental car service MAY ask to put a hold on a small portion of the money in your account, say $200-300. (But if you are on vacation at a fancy hotel, I hope you have $300 to spare in that account anyway.)

I also want to assure you that your debit card has as many safeguards (the new chip, anyone?) and security features as your credit card. If your card number is stolen, or a fraudulent purchase is made, the company behind your debit card has the same guarantee that you will not be on the hook for the criminal’s charges. You can also link a savings account to your checking with overdraft protection if you are especially nervous about using your debit card for large purchases.

Let’s talk about why you may want to consider switching from credit to debit – this should be obvious, but the interest is killing us, folks. Remember, the credit card company is not your friend. The fees and interest that most everyone with a credit card pays for the privilege of spending money they don’t yet have is outrageous – Americans paid over $100 BILLION dollars in 2017 alone (and 2018 will be even higher). If you are tired of paying your hard-earned money to big banks to borrow money on short-term credit card loans, join me in making the switch.

Here are the steps you need to take to make a credit card free lifestyle possible:

  • Stop using your credit cards. Commit to living each month on the money you earn, instead of overspending. This will be easiest if you create a spending plan.
  • Cut up all your credit cards. I’m serious – pull out your scissors. Delete the saved number on Amazon or your online store of choice. Switch your online bill payments to debit cards instead of credit cards.
    • You are allowed to keep one of them if you have no money in the bank and are legitimately afraid of getting a flat tire (not a store card though, the Old Navy card is not for emergencies people).
    • If you kept one card, freeze it into a plastic container full of water. This will at least make sure you are desperate when you use it, and provide time to think twice while it’s thawing. You also won’t have it in your purse when you are at Target and find a gorgeous throw pillow you just can’t live without.
  • Now start to save. Save up $500 – 1,000 that is reasonably accessible in a checking or savings account. (If you already have this money, congrats.) This is your new Emergency Fund. This Emergency Fund will replace your credit card addiction. The next time you have a large unexpected purchase, you can use your own Emergency Fund instead of falling back on Visa to bail you out.
  • Bonus points: keep a buffer of funds in your checking account. This means that you pay this month’s bills with last month’s paychecks. So there should always be at least one full paycheck in your account at all times.

Having your own cash set aside, a spending plan, and no credit cards on hand to tempt you into overspending frivolously, will help you avoid the temptation to go into credit card debt. Now you can create a plan to pay off your credit card debt without digging yourself into a bigger hole in the process.

The peace of mind that comes with knowing you can actually afford to spend the money you are spending, no longer dreading opening a credit card statement, ending the cycle of each month getting more and more difficult just to pay the minimum amount due… believe me, it’s worth the time to make the change. It may not be easy at first, but I promise it’s worth it.

What about you? Have you ever tried a credit card free lifestyle? Think I’m crazy?

After majoring in Business Finance in college, Samantha became a Financial Advisor with a big five investment bank. Becoming quickly disillusioned with the emphasis on sales rather than advising, she left the industry. She and her husband have paid off over $180k in debt and she is passionate about helping other women take control of their money! She has no conflicts of interest and is not getting paid to recommend any investment products.

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