Have You Sworn Off Credit Cards?

[ccmisery]

Credit Cards are only good if you can pay off the balance at the end of the month other than that they provide a false sense of financial freedom which will get you into trouble very quickly if you are not careful, I can attest to this. I got into credit card debt at around $25K+ and paid all them off nearly down to 0, listened to Suze Orman who said "Do not close your accounts" because of my FICO, so I tucked them away in a secret place for emergencies and used them lightly paying off the balances owed just to keep the active since it looks good on your credit report. That felt good, I felt like I was on top of the world, that was short lived. In terms of emergencies there is no denying the usefulness, if you are maxed out or near it then the usefulness is non-existent.

I used my debit card a lot over the past 5+ years but in that time my wife lost her job, cars needed this and that usually big repair bills, my income wasn't enough for groceries and etc., expenses soon grew made a lot of bad financial decisions but really have nothing to show for it, then the downturn in the economy grew worse, I slowly accrued debt going back into the hole I just crawled out of. I started making a dent in my debt over the past year or two, then I lost my job, the cards I was not using started becoming a lifeline after severance, savings ran out and unemployment which in Florida is only $275/week could not cut it.

I look at my debt and I hate to say it but I attribute much of it to groceries, dining out and transportation. We never go on vacation and if we do it's a staycation, personal property amounts of nothing abnormal in my opinion compared to others we know and work/worked with. Fact is my expenses are way beyond my income and it's not typical measurable BMW in the driveway, McMansion and trips to the timeshare. We just don't fit the stereotype.

Do I blame the credit card companies, nope I blame myself. I do think it was way too easy to get credit cards back in the day, I had $25K in credit one time on one card and was going to school full-time with no income, what is wrong with that picture? This is before the internet and when they use to use those credit card machines with the carbon copy and most places did not have the means for credit, it was a cash only society and to tell you the truth I never really used it for anything.

The problem with Credit Cards and my debt issues, isn't the balance owed it's the interest rate. I could have paid off my current debt in 5 years or less if it was interest free and I still had a job at the time. I bought a lot of things, electronics, furniture and etc with no interest for 90 days, 1 year or 2 years and paid off all 100% in time or early. When your paying 15 to 25% interest on $10K and 15% on this and 10% on that and so on, it's hopeless to pay the minimum but when you got $30K+ in debt and not enough income to go above that substantially it's a hopeless cause.

Isn't' it interesting how CD and interest rates are not what they use to be, remember when a CD would pay 12%? You would have to go back to 1984 to remember that. Banks are making a fortune off of interest and with more and more people carrying the so called bad debt like what I am, I am what they call a "good customer" believe it or not, I hear it all the time when I call them.

Debit cards are good, but you still have to manage your money because you can easily overdraft your account with ease.

[MarkHenry]

Thanks for the information.

[HRx]

Exactly!

Having no credit to use keeps you from even having the possibility of spending more money than you can afford to pay back. That's what I love about it.

Congratulations you've seen the light! If everyone could realize this they'd be in better shape financially.

[botsal]

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[GoingDown]

Then I remember that's what got me in trouble in the first place. For over 20 years, I managed to spend about $3,000 more per year than I was taking in. So, in some ways I am grateful for this forced budgeting of chapter 13.

Exactly!

Having no credit to use keeps you from even having the possibility of spending more money than you can afford to pay back. That's what I love about it.

[GoingDown]

We have never had an issue with hotels accepting debit cards.

I wouldn't know about Hotels. I only stay in the cheap dives-- motels where I can park right next to my door, so I can keep an eye on my vehicle.

[lillymarlene]

Of course my chapter 13 has forced me to swear off credit cards, at least for the next few years and in many ways I am enjoying the debt free lifestyle. I pay my utility bills in cash at my local Western Union Office; my mortgage and tax bills by money order. I have a checking account, but I hate waiting for checks I've written to clear the bank.

Sometimes though, I do miss having a credit card. For instance, my car needs repairs, my house could use some maitenance, I'd like a fancy new watch, and I'm in need of some dental work. Then I remember that's what got me in trouble in the first place. For over 20 years, I managed to spend about $3,000 more per year than I was taking in. So, in some ways I am grateful for this forced budgeting of chapter 13.

[Snax]

We have never had an issue with hotels accepting debit cards.

However, having the one credit card at our disposal literally saved our dog's life recently. We simply did not have the cash on hand at the moment she needed emergency surgery. Our limit is well within the bounds of our ability to pay it off every month, so having a zero balance and enough room available to cover that was priceless to us.

Credit is GOOD when used RESPONSIBLY!

[GoingDown]

Unfortunately, no. Most car rental places won't rent you a car without a valid credit card with enough available credit to pay for the entire rental period. They can instantly tell the difference between a debit card and credit card, and generally won't accept a debit card even if you have plenty of money on it to pay the rental fees upfront and in advance. They use it as a method of screening people out with bad credit.

I have heard of a few car rental agencies which will accept debit cards, but there are very few of them.

As for renting motels, the cheaper ones will generally accept a debit card or even cash.

[DaisysMom]

I really want to. I love being cash only and using my debit card for gas and other conveniences. BUT......we have to travel at times and we are finding it more difficult to make hotel reservations plus I know it will be a hassle when we need to rent a car. They will want to see a credit card.

Does anyone know if a prepaid card will work as well as a regular card? As soon as I am discharged I am thinking about getting a pre-paid one if it will be accepted just like a regular one would. And how about the ones you see at check-out counters where you load them with $ (Wal-mart, etc. carries them)...Do they work like a regular card for renting cars etc?

I absolutely don't want to get back into the credit hamster wheel. Any advice would be appreciated.

DM

[GoingDown]

I do not have any credit cards at all, and I have no intention of ever applying for any credit cards, nor any loans of any kind ever again in the future.

I use cash, money orders, and things like Amazon and Walmart gift cards.

I pay my rent with cash (I get a receipt, of course), I pay my electric bill at S.R.P. in person with cash, and I pay the water bill in person downtown with cash. My cell phone is a pay as you go cell phone, so I just buy a Net10 card with cash and then input the little code number on the card to refill my cell phone. It costs about $15 per month. Not bad. It works everywhere that has cell phone towers.

I used to have a pre-paid debit card, a Walmart MoneyCard, but I cancelled it because I didn't like the $3 per month fee and the loading fee. I mainly used it for online purchases, but now, if I can't find something at Amazon or at Walmart online, then I simply don't make any online purchases. I simply buy an Amazon or Walmart gift card with cash at Safeway or Walmart, and then use it to make purchases online. There are no fees, and the balances never expire. And now Walmart offers a service where you can order something online, have it shipped to your local Walmart, without any card, and then go pick it up and pay for it with cash, and avoid the shipping charge altogether.

Now that all of my debts are beyond the SOL, I'm thinking about getting a free checking account at the Bank of Arizona. I just haven't bothered with it yet.

This cash only existence has saved me so much money and made my life so much simpler.

[DesdemonaB]

I use four cards - two are debt cards, one is still the pre-paid I need during the BK process and the other is my Perkstreet check - cash back debt card in one year I have managed to save 250 in cash back to be used as this year's Christmas budget. The pre-paid I used for child support deposit - I have an somewhat of a deadbeat ex - he remained unemployed for 27 months (living off his parents and his live in GF/maid) before he was ordered to pay support - now if he sees me in/with anything new he accuses me of spending the kids money on myself. The only thing going on the card is my CS so I can verify any charge in court.

My two credit cards are being used as 30-day cash - but during the 0% intro time frame I did run larger balances but made two payments a month, but now that I am unemployed I am afraid to do that so I charge what I can afford pay during the month only. Both cards are cash back but their cash back is very low due to non-use or small charges vs. large purchases.

I have a 2013 goal of purchasing a house - looks much later in 2013 due to the unemployment so I need the credit to build up my credit again.

But I pretty much use my Perkstreet account (cash) because that's how I had to live a year before the BK and if I don't have the $$ I don't get it, or I have to save to get it.

[hhwwe2]

i wish

[memama]

My husband and I plan on moving to an all-cash system, at least as much as is practical. We'll still use a debit for online purchases (gluten-free food is MUCH cheaper on Amazon-my son has Celiac's disease), and we'll likely use automatic withdrawal for my student loan payments which will come due in December. Other than that, we're using Dave Ramsey's envelope system

[StartinOver]

Been deep in debt on credit cards and worked our way out of it too many times, in the past. I know me all too well. I will never feel like I did for the last 6 years, before we finally caved in and went through Chapter 7 and foreclosure last year. Never. Ever. Again.

And the only way for me to accomplish that, is no more debt of any kind. No mortgage, no car loans, no employee purchase financing, no nothing. And above all, no stinking credit cards!