The pros and cons of cutting up the credit cards...

[caseydog]

As a self employed person, I have always counted on credit to even out the ups and downs of my cyclical income. Then, cancer ran up my debts, and made me a slave to the banks. I didn't like that.

Well, as of right now, those medical debts are gone, my credit rating is crap, and the only debt I have is my mortgage, and I have 50-percent equity in my home. Not bad, on the surface.

Meanwhile, the banks are looking for new ways to screw us all. So, I cut up my credit cards, and gave them the proverbial finger. Hooray for me.

Well, being self-employed, and living only on what you have in the bank, is comforting, and at the same time, really life changing. Especially if your regular customers have difficulty finding their checkbooks. It seems to me that an Aston Martin dealer shouldn't need six weeks to pay an invoice, but I'm sure it is tough when your cars only fetch a couple hundred grand.

I have had 3 South Central teardroppers offer to pay for my campsite this weekend just to help me show up at the Ray Robert's gathering, and that really feels good. It's nice to know that they want me around, although I have a feeling they just want to get me drunk and get me to do something embarrassing. Not that I wouldn't do it for free.

Anywho, I am living a simpler life, and mostly enjoying it. I lost a lot of money when I had cancer, but gained a lot of wisdom. I hope to gain even more wisdom on this latest journey. Or, at least be able to tell people I gained something.

That which doesn't kill you only makes you stronger
Until it finally kills you all the way. -- Blues Traveler

CD

Gotta give them their props: http://www.youtube.com/watch?v=_Qf0Rj3ve2s

[S. Heisley]

Congratulations, Glenn. That's really the way to go. The latest way to get money from people is being done by department store creditors. Some are now charging a set fee from the first day you have a balance, even if it is only 50 cents. It is a good idea to keep at least one credit card for emergencies and to establish and to keep a good credit rating, though. Use the card at least once every 6 months, to keep it active, and pay it off again within days of using it.

Try to pay a little more than the required monthly amount on any loan you might have, even if it is just $5. That will also look good on your credit report.

I'm ornery. I always pay more than I owe by maybe a few cents or a few dollars, depending on how feel on the day that I'm paying. That way, the creditor has to send me a statement even if I don't owe anything. They hate that but it doesn't hurt me.

[caseydog]

Sharon, I did not get into credit difficulty due to discipline problems, I just got cancer, and my profession took a hit at the same time.

I used to always pay cash for cars, and I paid cash for the one I have now. I have a small house that I have more than fifty percent equity in.

The only thing keeping my credit rating out of he sewer is 24 years of on-time mortgage payments, and a half-dozen paid off cars.

Sh*t happens, and you deal with it. Then, you go camping.

CD

[ERV]

CD
I know where you are coming from. Jan and I got married young. Got our first house when we were 22. Paid cash. Janny had trouble having kids and it took 15 years. Tim was in the hospital for around a month. Total bill was around 200,000. Then 3 years later we had Jason, He only cost me 50,000. We paid cash for the house 50,000. For awhile there didn't think we would make it. At one point the house was worth around 280,000 with getting 2 loans against it. Luckily had a good friend that I banked with.
I was raised with a good work ethic so 12 years later we were debt free pretty much. Love the boys, But now they are in college. Back to the bank. We only have one credit card, and it is used to get camp sites on line and to play on ebay some. My Grandfather told me a long time ago " life is what you make it" And we are making it, Janny,Tim,Jason and me. You just got to keep looking up.

[angib]

I am amazed that any American could survive without a credit card - I found on a visit in the US in the 1980s, when credit cards here were still unusual, that it was impossible to rent a car without one. I volunteered to make a $1000 cash deposit and that still didn't swing it.

Aren't there 101 things that you can't do without one?

Here in Britain we are looking at the end of cheques in the next few years - their use has tailed off so much that their individual cost of use has sky-rocketed. As I mainly get paid by cheques, and can't afford the overhead cost of a portable credit card terminal, I wonder what the future will hold?

[Fenlason]

I don't know if there are 101 things.. but yeah.. there are things you can't do without a card.

We actually do a lot with our card. We have never put anything on a card that we did not have the money in the bank.. so we could pay it off at the end of the month.

We have a no fee card..so we get to use someone else's money for a month.. there are also protections, with credit card purchases vs with cash or check.

We also get "money" back.. from using it. It also gives us a better way to track our purchases.



When we first got married... we bought a house to soon, and had difficulties for a while, money was tight. We vowed to not get stuck there again [although there are never any guarantee's on that.. as in CD's cancer] We picked up extra odd jobs.. to make extra money... and worked to pay off debt.

Today we debt free...and have minimal monthly expenses... and we have a comfortable cushion in the bank. It certainly makes life a lot less stressful

[Shadow Catcher]

You can do quite nicely with out credit cards. We cut ours up five or six years ago, paid everything off and have finished up the mortgage, the only debt we have is car payments and our credit rating is way too good (too many card offers). Unfortunately a credit score is used for far too many things and not just credit, including security clearance. A debit card, just a plastic check for all intents and purposes is sufficient for car rental or...

[starleen2]

NO credit cards here. I have a debit visa card and a reloadable card to use for making reservations. Got rid of Ten of em at the same time - did some debt restructuring and paid off all my debt in 4 yrs. Haven't missed not having a credit card yet. CD - your antics are priceless

[tinksdad]

A debit card, just a plastic check for all intents and purposes is sufficient for car rental or...

Not always. I currently am under-employed by one of the major car rental firms, which shall remain nameless for the sake of this post, and we do not rent vehicles on a debit card. A major credit card is required for the actual rental and the balance due can be transferred to a debit card on return of the vehicle.

[S. Heisley]

Caseydog wrote:

Sharon, I did not get into credit difficulty due to discipline problems, I just got cancer, and my profession took a hit at the same time.

I know, Glenn. I wasn't insulting you or putting you down. You're one of the good guys out there in the sea of real-life 'Monopoly'. I just think it's best to keep one credit card semi-active.

[starleen2]

Caseydog wrote:

Sharon, I did not get into credit difficulty due to discipline problems, I just got cancer, and my profession took a hit at the same time.

I know, Glenn. I wasn't insulting you or putting you down. You're one of the good guys out there in the sea of real-life 'Monopoly'. I just think it's best to keep one credit card semi-active.

Strange thing I learned the hard way - Credit companies do not base your credit rating on what you have paid off - but rather the age of your oldest ACTIVE account. When we paid off all the credit cards and kept just one - they lowered our limit - even though we owed only $50.00 with a 1500.00 credit limit. When I inquired why they did this - the response was that credit rating was based on the OLDEST active credit account you have - not your ability to pay. WHAT??

Yep, the advice given is to keep your oldest account active if you want to keep a credit card and credit rating. Leave a five dollar balance if necessary. Sure there are "other" factors that come into consideration that affect credit rating - but it's just another way for the credit card industry to get ya'. My credit scores are based off of two car and a student loan payment - even though I have paid off several loans and credit cards.

[S. Heisley]

Andrew wrote:

Here in Britain we are looking at the end of cheques in the next few years - their use has tailed off so much that their individual cost of use has sky-rocketed. As I mainly get paid by cheques, and can't afford the overhead cost of a portable credit card terminal, I wonder what the future will hold?

You'll still be able to use checks. The way it is working here is that more and more companies take a picture of the check by running it through a small optical scanning device that sends the photo on to be processed via electronics. They either hand you back the check (if you're in the store) or destroy it after it has been photographed (if you aren't present or it is one you're depositing). Already, when making a deposit at an ATM (Automated Teller Machine), the ATM's take a picture of the check that you are depositing and you can get a copy of it back with your deposit receipt. That works okay. I like it better than the old way.

Credit is kind of ironic. It was encouraged, after the Depression, to help get us out of that economic slump. Now, through over-use, it has landed us into the greatest recession since the Depression. Someday, maybe we'll all get it right.

[jimqpublic]

We have three credit cards but generally only use one for ordinary purchases.

For Costco purchases we have an Amex card with no fee.

The last is used for recurring automatic payments (so the amount is always the same, it's easy to reconcile, and if our normal card has fraudulent activity and has to be reissued we don't have to hassle with changing the recurring payments.

We don't have debit cards- our credit union ATM card has no Visa or MC logo. I don't want anyone to get direct access to our bank account. We use the primary credit card for almost all of our purchases including lots of online transactions. It seems every couple years we get some fraudulent activity which luckily has always been caught very quickly. I much prefer that to happen with the credit card than the bank account!

All three cards get paid off every month and have no annual fees. We use them for a combination of convenience, our protection, and to run up rewards programs. If the merchants start passing through the cost of credit cards or discounting cash purchases we will change our tune.

Even though we pay them off each month, I personally would probably spend less if I had to peel off greenbacks for every purchase. Definitely something to consider.

[robfisher]

When the building boom went bust I took the only job I could find. It was a credit card debt collector. After hearing about 3 weeks of credit card woes from people who want to pay and just can't was all I needed to go home and cut my cards up. So many people have such sad stories, life was good, they were never late in 15 years and the bottom fell out. Now their lives are in a mess and they are at risk of losing everything because of credit.

Yes I miss the convenience of credit cards. But the peace of mind knowing what little I have is paid for is a great comfort

And I did have to switch car rental companies.

[caseydog]

I am amazed that any American could survive without a credit card - I found on a visit in the US in the 1980s, when credit cards here were still unusual, that it was impossible to rent a car without one. I volunteered to make a $1000 cash deposit and that still didn't swing it.

Aren't there 101 things that you can't do without one?

Here in Britain we are looking at the end of cheques in the next few years - their use has tailed off so much that their individual cost of use has sky-rocketed. As I mainly get paid by cheques, and can't afford the overhead cost of a portable credit card terminal, I wonder what the future will hold?

Andrew, i still have a VISA Check Card, which is a debit card that will pass as a credit card. I have used it for hotels and air travel, which I only do these days for business (for which I get reimbursed).

I have not tried to rent a car with it. That may be the tough one. I'll deal with it if I have to.

CD