Living Without Credit Cards

Not everyone has credit cards, or likes to use them. Here are some of those people:

Julie Beck:

I have never owned a credit card in my life. I know I probably should get one so as to build up my credit, which I suspect but don’t know is not great, since one time in college when I was away for three months on an internship, my roommates did not pay any of the bills, which were all in my name. I also have never checked my credit score. In fact, to this point, I have been living my life as though credit does not exist and I fear that by acknowledging it now I may, Beetlejuice-style, summon it down upon me. I should go.


Christopher Robbins:

My friends are usually surprised that I don’t have a credit card. I had one for two years in my early 20s for the same reason that many people get one. “Building credit” is necessary for many things (borrowing money from banks, renting cars, etc.)

I tend to spend most of my money on booze and food anyway, so I just ended up just spending more money on more booze and more food. I was spending money I didn’t have on shit I didn’t need.

The only other time I had ever been in debt was to repay a legal bill. The idea that I owed anyone anything, even if it was for a few hundred bucks, was frightening. Hearing stories of my friends who are five, ten, twenty grand in debt, I just can’t imagine what that’s like.

The only recent incident in which not having a credit card burned me was when I bought two 24-hour CitiBike passes for my friend and I. They put a hold on my debit card for more than $200 for around 10 days! I ate beans and rice for a week.


Mallory Ortberg:

I do have a credit card but I have not used it since August. This is because I lost it in August. They sent the first replacement card to an old address, which I found out two months later to call and say “where is my credit card.” Then they never sent me another one even though they said they would because I hadn’t paid my balance ($146) because I had no card. Then last week I took a bunch of cash to a bank and gave them my ID and a social security number and paid the whole balance. At some point this week I will get around to calling them and saying “please give me a credit card again,” which I will proceed to use never again out of spite.


Ester Bloom:

I have one now, but I didn’t for a very long time. Why did I need it? I just always used my debit card or cash. On some level I literally don’t think I understood why you would buy something you didn’t have the money to pay for. Lack of imagination I guess coupled with privilege coupled with extreme aversion to risk.

I only got it to make sure that i would have good credit for when we bought an apartment. When I did get one, I couldn’t because I never had one—my husband had to co-sign. It turned out i didn’t even exist in the financial world before i got one. I was some kind of specter.


Sarah Black:

The only credit card I’ve ever been approved for is a medical credit card, which I got this year to pay for chiropractic services during a time in which I was having horrible back pain. I’m paying it off, $100 per month, until April 2014.

I don’t have a “real” credit card (for like, groceries and clothes and Christmas presents [eek]), because I could never get approved for one in the past. Now that I’ve built up some decent credit from the medical card and student loan payments, I’m sure I could find one to approve me. It’s weird, though, because 2 years ago I was making $46K and I couldn’t get approved for the life of me. I’m making considerably less now, though. Maybe I should try to apply! But mostly, I don’t want to because I am scared of just being more in debt.


I don’t have a credit card because I am currently in the midst of filing for Chapter 7 bankruptcy and you have to stop using your cards on the date you file.


Nozlee Samadzadeh:

Especially as we grew older, my parents would occasionally talk to me and my sisters about their credit cards. They had just two or three cards in rotation at a time, carefully selected for their benefits and lack of fees, and they always, always, ALWAYS paid them off in full at the end of each month. Once or twice this was augmented by little speeches about the hidden folly of the American dream: living how you wished you could live, bolstered by credit, instead of living how you could afford to live. The lesson totally sank in — so well, in fact, that to this day I’ve never owned a credit card. Me and my debit card and my checkbook and my mostly-reasonable purchases get along just fine!

My parents also stressed the importance of having a great (not just a good) credit score, so I should probably just give in and get a starter card to put my groceries on. To be honest, though, the American dream continues to freak me out: your economic trustworthiness in the eyes of society—your economic worth itself, really—is judged by your ability to pay back monthly loans to enormous corporations, rewarded in the form of a magical and totally opaque number that determines whether you’ll be allowed to owe money to other enormous corporations, and punished with crushing interest? I’ll keep opting out for now.



31 Comments / Post A Comment

highjump (#39)

“Hearing stories of my friends who are five, ten, twenty grand in debt, I just can’t imagine what that’s like.” Oh, how nice for you.

tuntastic (#2,769)

@highjump I’m five grand in debt and this statement didn’t bother me, because before I was five grand in debt I couldn’t have imagined being so. I don’t think it deserves your snark.

highjump (#39)

@tuntastic It is just such a privilege not to know what that is like and I think his statement really lacked empathy. Bloom put it much more nicely “On some level I literally don’t think I understood why you would buy something you didn’t have the money to pay for. Lack of imagination I guess coupled with privilege coupled with extreme aversion to risk.”

WayDownSouth (#3,431)

@highjump I don’t think that the person was demeaning or negative to people who owe that amount of money. He simply said that he doesn’t borrow that amount, so he can’t imagine what it’s like. He appeared to use that phrase as an expression of emphasis, not in a negative sense.

AitchBee (#3,001)

I have two credit cards: one for emergencies (forgetting to close my tab & leaving my debit card at a bar), and one for…more emergencies (???). I sort of feel like a chump for not using them (points! rewards! airline miles!), but…eh.

SterlingCooper05 (#2,529)

Credit cards are fastest and easiest way to build a credit score to borrow more money to buy a car, to borrow more money to buy a house, to borrow more money for a home equity loan, to borrow more money for a parent plus loan, to borrow more money on a reverse mortgage. Or pay for stuff in cash!

milena (#3,288)

@SterlingCooper05 In a lot of cities a credit check is part of a rental application. Having to explain why you don’t have credit and why a landlord should take a risk on you when there’s plenty other people with good credit willing to pay market price must be a total pain. My boyfriend’s cousin (who is Canadian) is having a real hard time finding a home in NYC without credit, even though she has years and years of credit in Canada.

In short, credit is useful for things other than borrowing. It’s just a sad reality of adulthood that a credit record is basically the only way for others to assess your credibility.

jfruh (#161)

@SterlingCooper05 yes, it’s perfectly reasonble to sneer at people who don’t buy cars and houses with cash! There are literally no benefits to taking out long-term low-interest fixed-rate tax-deductable loans to cover the costs of things you will live in and/or transport yourself in for years or decades. Probably you shouldn’t have those things until you can save up to cover the five- or six-figure costs for them.

Goodie (#5,447)

@milena this may seem like a silly question-but I am Australian and we obviously do thing different here. But are you saying that by having credit cards and pay them off regularly you have a better credit score which will give you lower interest rates and also help with getting rentals and such?

@nnlsbin Yes, that’s basically true here in the US.

Goodie (#5,447)

@forget it i quit oh ok. In Australia your credit score is worse if you have credit cards. I pay mine off every week in full and have never paid interest on them. But when I applied for a home loan I got told I could borrow less because I had 3 credit cards. They didnt care that I pay them off regularly, just that I had them. So if you had never had a credit card in your life and had never had any debt of any kind it would be easier to get a mortgage.

though if you have defaulted on loans or credit cards or have debts elsewhere that will also lower your credit score.

WayDownSouth (#3,431)

@nnlsbin to be honest, I don’t think that what the person told you is accurate. I also live in Australia and was able to get a home loan when I had a couple of credit cards (that I also paid off in full every month). What the person at the bank told you simply doesn’t make sense to me.

Goodie (#5,447)

@WayDownSouth hey, i was able to get the mortgage but the amount they leant me was less than if I had no credit cards. It didnt bother me they were still offering me more than I wanted anyway.

The higher the combined total of your credit limit the less they will lend you, so if you have $20k (if its on one card or on 5) even if you owe nothing on it they will lend you less than someone who has 5k limit who earns the same amount.

WayDownSouth (#3,431)

@nnlsbin yes, now I understand what you’re saying. That makes sense. You’re right.

Goodie (#5,447)

@WayDownSouth Sorry didnt really explain myself properly.

But i just find it interesting that in the USA you need to have had credit cards in the past to get a good credit history where as here its kinda considered a good thing if you dont have them.

WayDownSouth (#3,431)

@nnlsbin it’s interesting reading your point of view. I’ve already learned something from you today.

I think there are two separate points in this thread.

First, in order to qualify for a mortgage, you need to have some history of paying loans back. Credit cards are a good way of demonstrating that you can do that.

One of the differences between the US and Australia is that banks in the US are limited to repossessing the house if you don’t make your mortgage payments. In the US, your liability is limited to the house. In Australia, if the value of your house doesn’t cover the outstanding amount due, then the bank can continue to go after your other assets. As a result, it’s better to be cautious down here, since the banks can take more of your stuff if the house falls in value.

Second, your overall credit limit is obviously taken into account (as you pointed out earlier). I didn’t think of that prior to reading your earlier post, but it makes sense. Credit cards are basically unsecured loans, so it makes sense that the banks would include them when calculating their loan amounts.

limenotapple (#1,748)

I use my credit card every day, and pay it off every month. I don’t really have a problem seeing it as “not real money” because I do pay very close attention to where my money is going, pore over the bill when it comes, and am, by nature, a cheap bastard. I used to use my debit card more than my credit card, but if you’ve ever had your account compromised, it can be a Big Clusterfuck to undo the debit card mess, especially if that means you do not have access to your money until it gets sorted out, meanwhile waiting for my credit card mess to get sorted out isn’t as bad because I can still get cash from my bank. (My debit card number was taken because Some Company’s site was hacked, and it was a huge mess of screwball purchases and overdrafts and whatnot).

However, I do sympathize with people for whom credit cards pose a problem, because it can make it super easy to rack up debt. Not everyone has my Cheap Bastard gene.

CubeRootOfPi (#1,098)

@limenotapple Hello my credit card and cheap bastard twin!

Also, my credit card gives me cash back rewards, which is essentially free money of sorts (piddly amounts of, but it adds up over time). So it’s (very) slightly cheaper for me to use a credit card instead of cash.

wallrock (#1,003)

@limenotapple I’m about the same. I had one in college but never used it, opting for a debit card and writing checks all the time. When I started my job I traveled a good deal and it was immediately apparent I needed to use the credit card for hotel reservations, out of state gas purchases, USPS fees, etc. I ended up applying for another card with a better rewards program that I use strictly for business expenses, so now all my stops at the liquor store don’t show up when I submit an expense report. Plus I’ve racked up a good amount of rewards points and a shiny credit score off all the work purchases.

My sister only got a credit card a couple years ago, after she got her debit card hacked after buying school books online. She’s even more frugal than I am so it’s rare that I see her using it. I gave her a bit of grief when she started writing a $8 check for flax milk at my co-op a month back.

garysixpack (#4,263)

On top of the cash back, credit cards give you a free 30-day float on your purchases. Effectively, they loan you the money for your payment for interest-free for 30 days. This is a great deal, so long as you pay your credit card debt on time.

milena (#3,288)

My credit card is what I use for my everyday expenses. I’m obsessed with racking up points (and I’m too good at it)and thinking of a large bill to pay if I keep running my CC definitely helps me curb my spending. Whereas if I spend whatever is in my checking account after taking care of savings, I’ll look at it as a finite-but-large pool of money that is perfectly OK to spend until it’s gone. (Not that that’s an irresponsible stance, but I guess I spend less with my regular MO.)

I see it as the epitome of financial responsibility to only purchase things with cash, but in my reality, a lack of credit would be more trouble than the upside. The thought of having my dad cosign everything or paying punitive interest rates for big expenditures (house, car) just makes me want to curl up and cry.

pengu1n (#4,391)

I totally understand that people want to be responsible with their money and only spend what they have in the bank, but I also find it super condescending and also counterproductive to get up on a high horse about how using cash is the ONLY good way to buy things. First of all, using your debit card for day-to-day purchases can carry risks too, and when you find your card stolen or are in a dispute over a bad purchase, you’re stuck in ways that you wouldn’t be with a credit card, which offers protections and allows chargebacks. I’ve had friends who’ve been overcharged mistakenly for purchases on debit (decimal point shifted over a place), which overdrew their bank account, accrued bank fees, and made them broke for weeks until the charge could be reversed. So when I have the choice I use my credit card, get rewards points, and buy myself “free” ebooks on Amazon with those points as a treat every few months.

I use my credit card all the time and I’m incredibly responsible about it, and having good credit has benefited my life more than having no credit. I realize this doesn’t work for everyone. But there’s no point in sneering at someone who chooses to use their money differently.

@pengu1n Apropos of debit card risks, Target got hacked recently:

“The type of data stolen — also known as “track data” — allows crooks to create counterfeit cards by encoding the information onto any card with a magnetic stripe. If the thieves also were able to intercept PIN data for debit transactions, they would theoretically be able to reproduce stolen debit cards and use them to withdraw cash from ATMs.”

Credit cards offer a layer of security between your money and the thief.

Beaks (#3,488)

@pengu1n Absolutely the only thing I use my debit card for is to get cash from ATMs. Everything else goes on my credit card- I keep cash for cash only places and super small transactions, but I don’t carry much. I would much, much rather have the credit card company on the front line of fraudulent charges than my personal bank account.

Of course, I was brainwashed as a small child that you always, always pay off your credit card, so they haven’t carried the personal temptations for me that they do for others.

readyornot (#816)

I really respect the people who have determined credit cards don’t work for them and decide not to use them. “Credit cards are my kryptonite,” indeed. But I do think that what Nozlee’s parents taught and her current practice are not the same thing. Their advice was sensible moderation (2-3 cards, no fees, no balance), her takeaway was extreme (0 cards).

calamity (#2,577)

I have two credit cards. One I don’t use very often and don’t keep in my wallet – it’s in case I leave my regular one at a bar (as I’ve done many times in the past), or lose my entire wallet in a cab (as I’ve done fewer times).

The second one I use for almost EVERYTHING – I get 1% cash back on all purchases, and 2% on groceries. Those tiny percentages add up! But I was also only approved for a $1500 limit, and I set the bill to be due the day after my mid-month paycheck comes in (aka, not the one I use to pay rent). So almost all of that goes straight to the card. Barring some big unforeseen expense, I feel like I’d really have to try hard to get into credit card debt with these CC limits … occasionally I’ve had to dip into savings so I have more than $20 in my checking account after paying the credit card off, but seeing as I put everything on the card anyway, I just try to tone down my more frivolous purchases (ie: stay away from Sephora) until my next paycheck comes in.

viewfinder (#5,201)


You are 100% right. These small amounts do add up. Not very fast nor to enormous amounts but they add up nonetheless.

A little over 10 years ago, I started a 529 plan for my daughter with the contributions from the Fidelity cash back card paying back 2%. I also started an auto deposit of a nominal amount as not to get charged an account maintenance fee.

I contributed $5.7K over the years in “real money.” The account is at $23.6K largely due to the cash back contribution and appreciation. What I wanted to do was to conduct a real life experiment in saving, investing, and capital appreciation. Due to the volatile markets the return has been only around 7% annualized over the years but considering my real contribution the return is more like 27% annualized.

The account is only going to pay for a year of college (if that) but I’m looking forward to being able to craft some money lessons for my daughter based on this experiment.

thegirlieshow (#5,285)

Credit cards are my kryptonite, but one day I will be able to say, “Credit cards _were_ my kryptonite.” That’s the dream.

MyrnaMay (#5,597)

I’m 33 and have never had a credit card, and so have read all of The Billfold’s Credit Card-Free stories with great interest. (They also helped me feel like less of a slacker.)But! My blissful credit-free existence bit me in the ass when I applied for health care on because without a credit record, they couldn’t confirm my existence! How could they not know I exist?! Not only have I had leases and utilities in my name, I’ve been sending the government nice stacks of tax money every year. Has anyone else had this problem?

vanderlyn (#2,954)

My take: If you’re even a little responsible and can set up auto-pay transfers between your bank and your credit card company, you should have a credit card and use it all the time.

Capital One offers a no-fee credit card with 1.5% cash back, Amex offers a no-fee credit card with 3% cash back on groceries, and I am sure there are many others. I just couldn’t imagine leaving this kind of money on the table, for fear of…losing self-control? If you are not using a credit card for these purchases, you are really adding 3% to every grocery bill, and 1.5% to every discretionary purchase. It adds up.

Gary M. Freedman (#5,601)

To survive without credit cards, you need some money-You don’t have to be rich. I have NO credit cards, and no debt, thanks to the help of Dave Ramsey. Living debt free means no credit card worries. I just got a one year lease on a house with no job and bad credit-I gave them six months in advance… Getting a job might be tougher now, since many companies are checking credit, but credit just get in the way of life!

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