Going Credit-Free
March 10th, 2008
This weekend, my husband and I agreed to give up using our credit cards. It’s a bit of a scary, since by doing this we end up with one month of overlapping expenses, but I think it will be worth it.
It’s a result of being a Dave Ramsey show listener and in the process of researching for this book. I have come to the realization that even though we pay off our credit card each month, it is stressful worrying where to pull the money from to cover the bill.
There are studies out there stating that if you regularly shop with a credit card, you generally spend anywhere from 12-20% more than the person who pays with cash. Why? Because when you have to dig into your wallet and pull out the actual dollars, the spending is more “real”. I find it is true for me–even though I am a careful shopper as a general rule, I am even more so when I am spending cold, hard cash!
This is not to say we are canceling our credit cards tomorrow. Instead, we will go back to how we used to live–using the card only for purchases such as airline tickets and hotel rooms, but only after the money is in the bank to pay for these things.
We are also keeping our Lowe’s/Home Depot credit cards for emergencies (remodeling a bathroom does not count as an emergency!). Like a couple of weeks ago when our garage door finally gave up. They are there if we need them, but not as a rule to use them. Only in an emergency.
A big weight has lifted off my shoulders…I like paying with cash.
Many will ask what to do about Internet purchases if you are a debit-card sort of family. Protection is paramount, so if you are a debit-only household, try using either PayPal or a “rechargeable” debit card. PayPal is widely accepted these days and is safer than sending your debit card info over the Net.
I am wondering how other moms are handling this, particularly as the price of everything seems to be skyrocketing these days.
So here’s the question: how do handle the credit card situation?
Copyright 2008-2009 Kristin Delfau, author of Turbo-Mom's Guide to Saving Money Without Wasting Time a womens' personal finance book, and Aji Publishing.
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