Would You Ever Cut Yourself Off?
Posted by: Leonora Epstein
Filed in:
news
8:20AM, Thursday November 19th 2009
Are cutting credit cards up a new recession trend? The Atlantic thinks so:
“Cutting up credit cards is a classic solution to the temptations of easy credit, but as Americans have become more and more reliant on plastic, there’s been a resurgence of interest in swearing off credit entirely.”
For those looking to cut back on mindless spending, ditching your Visa might seem like a triumphant move—you’d have to really think twice about the purchases you would have ordinarily made with it, plus the act of snipping the card might feel freeing. Yet, you might want to think twice about making the cut. Use the same mindless spending mentality on your debit card, and you’ll wind up with overdraft fees, which, one financial blogger notes, is “just another name for ‘short term loan.’” And, reports one Atlantic writer who tested out a credit-free life, paying for things in cash can get ... weird:
“It’s also hard to spend cash, because so many people look at you funny when you try. The very first day, I spent almost 20 minutes trying to check out in the “better dresses” section of a department store. The saleslady stared at the hundred-dollar bill in her palm as if I’d just handed her an eel. After a series of plaintive looks at my obviously card-free wallet, she started stabbing at the cash-register keyboard with a sort of bleak despair. To my immense surprise and relief—and clearly, also to hers—the cash drawer eventually opened.”
Our very own editor-in-chief, Amelia, tried this approach once, but points out that if you know your credit card number by heart, you can still shop online (which, let’s face it, is where a lot of our money goes).
Could you survive without a credit card? Do you survive without one? Think cutting yours up would amount to more trouble? Sound off in the comments after the jump. [The Atlantic]
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qnzmami718
wrote on November 19 2009 @ 08:29 am: [report]
lol i cut mine up 2 weeks ago! im glad i did cuz i found myself about to buy stupid sh*t & realizin i dont have my credit card anymore.. its a good thing cuz i didnt spend money i didnt have. i like payin with cash or debit cards better. &anyone; who overdrafts themselves on a debit is a f*ckin moron! its not tht hard to do the math & kno how much is left in your account..
bogart4017
wrote on November 19 2009 @ 08:32 am: [report]
Unfortunately a credit card is necessary in certain lines of work. Otherwise i could do without. Cash and carry is my motto.
bumbler
wrote on November 19 2009 @ 08:35 am: [report]
I’d never do this. I use my credit card exclusively but never carry a balance so I never pay interest or fees. The points my husband and I accumulated on our Amex account coupled with our frequent flier miles paid for our tickets to Italy for our honeymoon.
*sam*
wrote on November 19 2009 @ 08:37 am: [report]
I’ve actually tried this. However, when something unexpected came up with my car and I REALLY needed it to fix it, I realized how maybe it wasn’t such a good idea after all…
Riley
wrote on November 19 2009 @ 08:44 am: [report]
Just remember cutting up the card doesn’t close the line of credit in your name. At a certain point having all of that open credit will start to hurt your credit score. Makes a difference if you are planning to apply for a home loan.
I’m with Bumbler and Bogart; I use mine for work and do not carry a balance from month to month. I get to keep the points I accrue through work travel and then get reimbursed. I do need to switch to a miles reward instead of cash though; the cash max is abysmal on my Amex.
I think it makes tracking and reigning in spending easier.
CanadianGirl
wrote on November 19 2009 @ 08:45 am: [report]
I’m in this situation right now, sort of unintentionally. I’m American, but in grad school in Canada, and since my funding now comes in Canadian dollars, I can’t use my Canadian checking account to pay off my American credit card bill. And, since I’m just here on a student visa, I can only get a Canadian credit card with a security hold (so if my limit is $1,000, they place a hold on $1200 in my account), which is crazy! So far it’s been fine, but my only real concern is with buying plane tickets and things online since my Canadian bank card won’t work as a debit card online! As you can tell, things have gotten sort of complicated…
sammyisadog
wrote on November 19 2009 @ 08:53 am: [report]
I have never had a credit card, and boy oh boy do I want one, but I’m going to put it off as long as I can. I have plenty of debt from college - I doubt I’ll pay it off before I’m dead - and I just feel that I truly don’t need any more debt. I’m thinking about getting one in the next couple of months, but I just know my spending habits, and I think a credit card could really only mean financial disaster for a person like me.
emflow
wrote on November 19 2009 @ 09:17 am: [report]
I pay my full balance each month - so really my credit card functions as a debit card with a once a month payment and no interest accrued. It’s nice to have it for emergencies, but if my company adds an annual fee or starts immediately accruing interest upon purchase then I’m canceling the card.
lostrun
wrote on November 19 2009 @ 09:48 am: [report]
I have 3, but I have had them for years..at least 10 i believe. And it would be ridiculous to cut them up/close the account b/c that would actually hurt my credit score. But I don’t use them that much or at all.
sillygrrl
wrote on November 19 2009 @ 09:54 am: [report]
I’ve been good about not using my credit card, but have been a debt-holic for years - I know the card number by heart. I recently decided to take my spending money out of the bank so I can keep better track of where it’s going and not go overboard. So far, so good. If I want to shop online I have to put the money back in the back.
Lynn
wrote on November 19 2009 @ 10:08 am: [report]
I just got my first credit card a couple months ago, because I need to start building credit. I had ZERO. I had just always used cash or my debit card before that. And honestly I still do that mostly - I have one of my monthly bills automatically billed to my CC, just to charge something on it, but other than that I don’t really use it.
CheeeeEEEEse
wrote on November 19 2009 @ 10:17 am: [report]
I have no credit card, nor any debt.
bumbler
wrote on November 19 2009 @ 10:26 am: [report]
I once had my credit card information stolen and for the first day all the guy charged was a small donation to the United Negro College Fund. I almost felt bad about reporting him, wondering if he was a modern day Robin Hood. Then he tried to buy a website domain for $127 and I didn’t feel bad anymore.
Riley
wrote on November 19 2009 @ 10:52 am: [report]
@Cheese - Must be nice to have no school-related debt.
indianagirl
wrote on November 19 2009 @ 11:00 am: [report]
I cut mine up 3 years ago… and I find that I have more money now that im not playing credit card catch up every month. I hate intrest. The only thing I have a REAL payment on is my house. I dont even have car payments ....sawweeet!
CheeeeEEEEse
wrote on November 19 2009 @ 11:00 am: [report]
@Riley: I’m still 24 with not much income, so I’m still stuck in limbo with life aspirations though.
SouthOC
wrote on November 19 2009 @ 12:30 pm: [report]
Riley’s philosophy is great for building a healthy credit history. When you apply for an auto or home loan, this is critical. Creditors want to see a history of paying your bills on time.
meredith806
wrote on November 19 2009 @ 01:08 pm: [report]
I have a credit card simply to keep a decent credit score, I pay off the balance monthly. My parents had huge credit debt, so I am very careful to keep out of that.
Jessalyn
wrote on November 19 2009 @ 01:44 pm: [report]
@emflow: same here. I just treat credit cards as cashflow management and pay them off in full every month.
SueSue
wrote on November 19 2009 @ 01:53 pm: [report]
I carried pretty big balances for a long long time and I finally got rid of the plastic and paid everything off about a year ago. Since then, I didn’t even want to look at a credit card b/c for day to day life, I don’t need it. But I know that I need to build my credit up again and a credit card would help out there. Plus, if I ever want to rent a car, I need one. The car rental places I’ve been to don’t take a debit card as collateral/insurance, they want a credit card.
Lately I’ve been getting very persistent solicitations in the mail from Capital One - so far, 3 in the past two weeks…I might have to break down and apply for one soon.
Jessalyn
wrote on November 19 2009 @ 01:59 pm: [report]
@SueSue: If you haven’t already, you might want to dig a little deeper into why a car rental place you’re looking to use doesn’t take debit cards. One of them explained to a friend of mine a few months ago that they charge some standard amount (I think it might have been $500?) as soon as you sign and whereas with a credit card they can just reverse the charges a week later and charge you what you actually owe, no harm done, with a debit card it actually takes the money out of your account immediately. I’d imagine they run into a lot of people who don’t keep the necessary cash in their checking account for that. Maybe if you explained your situation (and made certain you had enough in your account), they’d accept a debit card?
SueSue
wrote on November 19 2009 @ 02:14 pm: [report]
@Jessalyn That was explained to me once when I didn’t have one and they told me they would take either $500 in cash or a credit card. Even if they would have accepted it, I sooo didn’t have an extra $500 in my bank account. I ended up asking my father to rent it for me - just when you thought you were an adult…
Frederica Bimble
wrote on November 20 2009 @ 11:36 am: [report]
I don’t use credit cards unless I know I will pay off the balance before the interest hits. Credit cards are a trap for the (in the US, lower middle classes) and (in the UK, for the poor) to stay forever in debt.
I believe in being monetarily wealthy, therefore, I’m not going to give the bank my money when it could be in my account…...
Queen Frostine
wrote on November 20 2009 @ 12:14 pm: [report]
I haven’t had a credit card in over eight years. It’s changed my life for the better.
kippon
wrote on November 20 2009 @ 07:29 pm: [report]
if any of you girls have bipolar, let this be a warning:
2 years ago i had a fairy tale life in boston: nice job at the hospital, decent apartment in my favorite neighborhood, nights out with friends, new clothes when i wanted them, the works! my finances were under control and i even had enough left to accumulate a nice little nest egg in savings. then i began a severe manic episode in the summer. my first truly dangerous manic episode. and since i wasn’t in treatment at the time, my life went out of control and i lost my job. i then proceeded (QUITE unwisely) to bill my entire life (including one month of rent, towards the End) to my credit cards! several months later i closed up shop and moved back in with my parents. i stabilized and sought treatment. it took me a year, but i finally paid off those 3 cards.
come summer, again with the mania, not quite as bad though, as i’m receiving high quality treatment. but AGAIN, i spent like a madwoman. most of that debt is back! here i am again, AGAIN, paying it all off. and it is excruciatingly painful. how i’ve made it this far with a good credit rating, i do not know.
i have steeled myself to NEVER do this again. any similar personal stories or *suggestions* for Next Time Around?