Life without credit cards

Can you imagine going to the store to buy something and not using a credit card?  Well that is how I now live my life.  It is going on six years, and I DON’T BORROW MONEY!!!!   Was it the hardest thing I’ve ever had to do?   I’m not sure I can actually answer that.  I can tell you that it was by far the smartest thing I’ve ever done.   Now, thinking about my life with the use of credit cards, It just didn’t make sense.  Here is what I was doing.

My paycheck would come in,  I’d “pay the bills”. Little situations would arise and small purchases needed to be made; I’d go to the store to start buying. There would be nights that going out to eat seemed like a great idea, so we’d go spend fifty dollars ($50) on a meal at a local restaurant. Then,when the debit card went dry… the credit card was a viable solution.    By the end of the month I’d have a balance on my credit card more than what was in my pay check.

In truth all I did while doing this was increase the amount of money that I was spending out of my paycheck  every month.  There came a point that even the credit card was no longer an option, and my monthly salary  could not cover my expenses and the credit card debt that I’d accumulated. After lots of thinking, I decided that another credit card was not the answer.

The decision to not use credit was the best decision that I could have ever made.  I can honestly say, I get more done with cash, than I did using credit.  Every month I sit down to create a budget.  Ensuring to leave room for the little things that come up such as school trips, or just wanting to have a good night out with my family. If it is not in the budget, It doesn’t happen.

At first was the transition difficult?  Of course it was.  There have been many  times where, I know how much my wife really wanted an item, or the kids really wanted to go out for ice cream. But If the money was not allocated, we could not do it.  The hardest part has not been living without the use of credit cards; In fact, the hardest part of this process has been, telling my household that I can’t do it now or No… Have you ever tried  explaining to your little bundles that you can’t do something because the money just isn’t there? (yeah…that one broke my heart). But, if I was going to not borrow money then, a line had to be drawn.  Eventually , with a little creativity, and brilliance,  my wife created the reward system for the children that allowed me the time to allocate funds, and them to get the rewards they deserved.

Cash only! No thanks to the credit card offer. Many people see having cash as being a hassle. Some college campus cafeteria’s don’t take cash. So what do you do then?  Can you say Debit Card!  The funny thing is people look at me funny when I tell them I don’t use credit. Even in the stores, when the cashier asks me “Do you want to save 10% by opening up a credit account?”  Of course I say No. But think about it, you save 10% now, to pay 25% (or higher) later. I happily say, “No thanks!” “well its only a probelm if you dont pay it off every month” is usually the next statement that follows.  A debit card, is the perfect solution for the person that does not use credit cards.  It gives you all the benefits and, since it is linked directly to your bank account,  none of the side effects. I’ve been asked “isn’t that like using a credit card? ”  For all intensive purposes I will answer no. Once you pay with your debit card, there is no bill later.  If you are addicted to swiping.  Then I suggest you go on a strict no card life style.  But for everyone else.  A debit card gives you all the benefets of a credit card and the benefets of a cash only system.

Is it difficult living life without credit cards?  Once you’ve made up your mind that borrowing money is not something you want to do, then making the necessary adjustment in your life will take some getting used to. For me, the decision was not difficult, the life style change has not been over taxing on my family.  Truth be told, I now have more money to go around, since I dont have to pay credit card fees. Today, we still say it is the best decision that we have ever made, and… the best part about it, after I pay for it,  It is DONE!  There is nothing worse than having a great time today, then having to pay double for it tomorrow.  If you ask me, I’ll tell you, a life with no credit cards us the way to live.

How long does information stay on your credit report?

While talking to a banking representative the question was asked; How long does information stay on your credit report?  The answer that was given was. “7 years from the date that it went delinquent”.  NO, NO, NO, NO, that is not correct!

Items stay on your credit report 7-10 years after that last activity. If your creditor is still updating information on your account then it is still active on your credit report.  Here is an article to give you some more information.

http://blog.equifax.com/credit/faq-how-long-does-information-stay-on-my-credit-report/

The Beginning- Getting Fed up

I won’t even pretend to remember what the exact time or day was. If you ask my wife she’d probably be able to tell you down to the nano-second. She’d probably even be able to tell you exactly what I was wearing on this day. For what I want to convey here, let me stick with what I know. The one thing that I can tell you is things were not all peaches and cream in the my household. Toward the end of 2005, we lived a life that was in total disarray. We’d just purchased our home, and were on our way to building the life we thought we wanted. But, SURPRISE!!!  As Dave Ramsey,  constantly says, Life happened.  Life has a way of inviting you to every party it throws, no matter if you want to be there or not. And usually there is a huge bus headed straight for you full speed ahead when you get there. After the purchase of our house I began to track our family’s finances.  You know, the normal, “where every dime was going”.  To my dismay, at the end of the month I found it was only by the grace of God that were were making it.  Our output way surpassed our income; we had no savings,  I was 28 years old and I saw no light at the end of the tunnel.

A series of events and poor judgments led to an even more dismal mind-set over the next month or so. My wife and I had many of adult “DISCUSSIONS” about things in our household. Finances, as you would guess, were among the most common topic. The “DISCUSSION” however, was not us trying to better our financial state. For the most part each DISCUSSION was about our shared financial responsibility that was in fact non-existent. During one of these many discussions, I brought up my need to always have some cash in my pocket. You see, my office is always going out for lunch together and I was always more worried about what check is going to bounce because Captain Whoever wanted to go out to eat again. So what did I do? I applied for a credit card specifically to supplement my offices eating habits. Several more life events transpired,  and I thought to myself; “I need some extra money to fall back on… You know, just in case of an emergency.” I got the second credit card in the mail about 2 weeks later. Needless to say, that these two items caused more trouble than they were worth. In a short period of time I managed to single-handedly make 2 poor decisions that completely put more on me than i could bare.  Can you see the walls are closing in on me!

Over the next few months many things had happened, some of which I will not get into. The most important thing that happened was I was fed up! During one of our adult “DISCUSSIONS” my wife informed me of a book she wanted US to read together. It was a way for us to get our finances in order. During this particular discussion she was not fully aware of the hole I had dug for us. All she knew was that I was struggling and having a hard time. So she continued to tell me about this book one of her friends, told her about.  She also told me that her friend had promised to lend her his DVDs of something call Financial Peace. I agreed to go through the training with her however, my mind was not fully focused on the words she was saying, all I heard during the conversation was “I was talking to ANOTHER GUY about how YOU CAN’T handle OUR MONEY”! Immediately I knew my marriage was in trouble. So my agreement was not an agreement to fix my mistakes it was an agreement to save my marriage. And this was the beginning, the moment I got fed up!