Are you weird yet?

Just thought I’d point out this article I saw….

And of course this inspires the question: Are you weird yet? Have you ditched credit cards yet?

We’re now on month 21 of not having a credit card, the world didn’t end, our finances are better than ever, the recession is a myth for us, and we pay no interest no fees no nothing to credit card companies. Most importantly, not one of the “this will happen” predicted by so many around us has ever happened.

Life is good on this side of the fence.

The one thing the article did point out that I’ve been thinking about lately is the backlash that will eventually follow debit cards. As credit card usage continues to suffer, it’s only a matter of time before banks and credit card issuers start coming after the debit card crowd. I wonder how many people will, at that point, make the total switch from our national plastic addiction and go with cash.

When we turned off the credit cards 21 months ago, we made the move to cash as well with the exception of purchasing gas (debit card). It’s been a huge blessing for us.

Join in the CC revolution. Cut ’em up and get those snakes out of your life.

Yeah, so I’m a little passionate about killing CCs. Can you blame me? Easy credit is one of the primary drivers behind much of the financial trouble today. The buy-it-now generation has committed plastic suicide, putting themselves in bondage to these companies at rates as high as 29.99%. At the same time, CC companies have created this entire mythology where having one means something. Where not having one means you aren’t someone.

Since when did the color or brand of a plastic card in my pocket prove anything beyond the power of good marketing? Seriously. Think of it this way: You, the customer, the one who pays the bills, the one who manages your money, applies to them for the right to borrow money at rates as high as 29.99% and when you are approved, you think it’s a blessing? You think it’s a good thing? You think it’s an honor to be awarded the triple plutonium card with double points? We act like getting credit is a right of passage, like it’s a privilege, like it’s a necessity, like it’s something to be proud of. Think that through again… You are begging them for the right to give them your money, and you like it!?!?

On what world does that make sense?

Sigh…. Debt is dumb. Credit is dumb. Even for the crowd that pays everything off every month or buys only planned purchases. You do realize that most merchants tack on 1.5% of the sale price to cover the surcharge they have to pay the CC companies? Hope you like your 1% cash back. Did you know that most places will discount major purchases by at least that surcharge amount if you pay cash and ask for the discount? Hope you like the air miles. Did you know that studies have proven that shopping with a CC typically increases your spending by 18%? Hope you like the convenience.

It’s just not worth it. I realized that when my then-three-year-old knew how to swipe a credit card and the cashier thought it was cute. Katherine had no concept of money, its value, or its purpose. Now, 21 months later, she gets it.

Do you?

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5 Responses to Are you weird yet?

  1. nosurfgirl says:

    Mostly weird,and proud of it. 🙂 It has been a budgeting lifesaver for our family to not include credit. As I’ve said before, Skywalker is actually one of those really weird people who researches credit cards down to miniscule fine-print and utilized them to his benefit before our marriage. This is a man who could live on 9,000 a year, including rent and tuition, when he was single. In other words, very, very frugal and very, very not-susceptible to the temptation to spend more.

    That’s not me. I’m a pretty frugal person, I think. I don’t need the new car or new furniture (in fact lately people are telling us we need to get new stuff and I’m saying… why? We can still sit on it, can’t we?) For me the problem is mostly food, or clothes… I go without for a loooong time and then binge-spend when I start feeling deprived. The budget and non-use of credit cards has really helped to get Skywalker understanding better what we really do spend each month, and get me feeling more like it’s all concrete and trackable, and not like giving up because a certain amount just goes down the drain every month paying for the previous month’s expenditures.

    That having been said, we did put our huge gargantuan airline tickets on our credit card (it was all in savings already) and paid it off the next month, right on time, on purpose to gain better credit scores… we’ll probably continue to do that (save up for very large purchaces in cash, then use credit and pay it off immediately) just for the purpose of credit scores. Now I know Dave Ramsey has something to say about that, too… but I’m still a little skeptical that we don’t need to use credit a little bit to raise a credit score??? Anyway.

  2. Sarah B says:

    Okay, you know I was going to play devil’s advocate didn’t you?

    What do you say to the person who lives in a small Alaska town, would like to buy a home, but is told that the mortgage brokers in this area do not do manual underwriting?

    Dave Ramsey says it’s okay to get a mortgage, but for those who are in “underserved” areas, we can’t get a mortgage without a basic credit rating.

    Remember, I’ve never had a student loan, car loan, utilities in my name, cell phone, etc.

    What’s your advice to me?

  3. daveloveless says:

    Hi Sarah, and yes, I did know you would play devil’s advocate. 😉

    I would honestly say this: Personal finance is personal.

    I’ve heard many people say that Dave Ramsey is for those truly in trouble who have no control of their finances, and while that is largely true, much of what he teaches has a much broader application in our financial lives. You must remember that while he does emphasize the truly financially “sick,” he also spends a great deal of time focusing on what do to once you’re out of debt.

    Still, the principles he gives are, generally, for general situations for all of us. In general, it’s best to avoid credit cards for all the reasons stated here and other places. In general, it’s best to avoid long-term mortgages. But I get that there are always people who live the exception.

    In your case where credit cards really are the only way to maintain a credit score, you may have to go that way. Dave Ramsey would personally suggest that you not worry about the credit score, but I recognize that some people won’t live that way or, possibly, can’t live that way.

    I don’t want to sound skeptical, but I have difficulty believing that no one in Juneau will do manual underwriting. Then again, maybe I don’t. There is a growing movement against credit scores, particularly now that more and more industries are starting to hold your score against you.

    I would suggest pulling your credit score and seeing what is actually being tracked. Depending on your insurance carriers and your bank, some of your accounts with them may be tracked. Your home rental might be, but that depends on your landlord. The simple truth is that the credit score is a debt score; Without debt, you probably won’t have much of a score.

    Honestly, I know you and your hubby well enough to say you are some of the people I would worry about least when it comes to credit cards. I think both of you are mature and responsible people who would very carefully use a credit card to build your score. The ones who worry me are the ones who have less self control and use credit as a “buy now/pay later” arrangement.

    Just one other thought while we’re on credit scores: revolving credit like credit cards only make up a small portion of your credit score. How has that affected you? I know you don’t have any long term debt, and that would “negatively” affect your credit score.

    The short answer, again, is that personal finance is personal. In the end, you are responsible for you and how you live your life. As long as you are willing to own up to that no matter the consequences, I think you’re doing fine. If nothing else, you’re at least better than the people who leveraged themselves right out the front doors of their homes.

  4. Sarah B says:

    Honestly, Dave, I’m skeptical that no one does manual underwriting here either, it’s just what I’ve been told and I wanted to hear your reaction.

    Yes, having only revolving credit hurts a score, but that’s still a score.

    Am I weird yet? No, not as you define weird. But from the look we got from the seminary kids on Monday, yeah, we’re weird. Apparently 17 y/os don’t appreciate $1 garage sale finds. :o)

  5. daveloveless says:

    You make me laugh, Sarah (in the good kind of way, of course). Honestly, you and your husband were the LAST people I was thinking of when I wrote this post, although I expected you to be one of the responders.

    We’ll probably always have at least a slight disagreement on credit cards, but it was your husband who showed me how wrong I was about many other financial things, especially retirement accounts. I can still remember the day… We were sitting on the floor of our new home putting together some wardrobes for one of the bedrooms. We were talking about retirement, and I mentioned that I thought I was doing pretty good. Then Ammon starting outlining what you and he had done, and I realized that I was WAY off the mark.

    Oh, and anyone who takes as much joy as you do in garage sales definitely counts as weird (no matter what the seminary kids say!). 🙂

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