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Debt-Free Living

3 Myths About Owning a Credit Card

If you spread a myth long enough, then people start to believe it as a truth. That’s something we fight against every day.

For decades, people have believed life is best-lived through debt, whether it’s car loans, student loans or credit cards. But that’s simply not true.

You don’t need a car payment and a credit card to make it in this world. You can, and should, live without debt.

So what are some of the myths about credit cards?

1. Credit cards teach you how to be responsible with money. To learn how to be responsible with money, you need money, not a card that says “I promise to pay you back sometime in the near future.” How does that teach you how to be responsible with your income?

2. Credit cards are good for emergencies. No! An emergency fund is good for emergencies. An emergency fund is simply a savings account that you have set aside to cover all of life’s unexpected expenses, like a broken HVAC, a flat tire, or a trip to the ER. Start with $1,000, and once you are out of debt bump up your fund to three to six months of expenses.

3. Credit cards are great because of points programs that include airline miles and cash back. One study found that when you use plastic instead of cash, you spend 12-18% more. Whatever minor perks you gain by using that credit card is easily wiped away by the extra amount you spend. When McDonalds started taking cards, the average sale went from $4.75 to $7.00! When you use cash, you “feel it.”

Bottom line: There are a lot of myths floating out there about credit cards, so don’t buy into everything you hear.

Make a plan for your money and use cash so you aren’t stuck pulling out plastic every time you want to buy a burger or go on a date. Use common sense and don’t spend money you don’t have!

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  • Webly

    When I tell my friends that I haven’t owned a credit card for over 10 years now, the first question I get is “How will you buy a house without credit.?” Most people are afraid of not having a credit card because they want to increase their credit score. How would you answer this question on buying a house without credit?

    • ethu18

      You may have credit cards but not using them and you will build credit. They are looking if you are making your payments on time, if you owe nothing, you essentially made your payment on time.

      • April Del Rosario

        but if you are not using them, you don’t have any payments to make on time. hahaha….

    • Jess

      Hopefully this link works…about halfway into this article is advice on buying a home without a credit score. nnhttp://www.daveramsey.com/article/the%2Dtruth%2Dabout%2Dyour%2Dcredit%2Dscore/lifeandmoney%5Fcreditcards/

    • Lyla

      You can buy a house with cash. Which seems radical but it is possible!

      • ethu18

        You can have an excellent credit score and pay cash for your mortgage. Having credit cards open and not using them is the best way but only if you have your emergency fund and the discipline. Your savings by using the inconvience of cash is dwindled when you get a higher mortgage rate and your auto insurance is higher.

        • Lyla

          I won’t have a mortgage rate buying a house with cash!! And our Auto insurance is actually quite low. Why would I bother having open credit cards when I don’t use them. That is stupid. You only need credit if you intend to borrow money, which I do not.

        • April Del Rosario

          How is having a credit card open and not using it the best way? An emergency fund serves the same purpose – its the best way because you don’t owe it back…. Just save the discipline part for piling up cash in the emergency fund. We haven’t used a credit card in 10 years… our home is paid off completely.. no debt. We don’t care if auto insurance is higher!! That is the least of our concerns. That would be majoring in minors…. Caring too much about minor things….

    • Bill

      You don’t need a credit score to have good credit…how many of these do you pay every month?: Landlord, cable/satellite, phone, utilities, insurance….pay on time, better still pay early, every month then ask for letters from each as a “credit reference” making sure they include your dates as a customer.

    • You would either pay cash (which is totally doable) or through a process called manual underwriting. Here’s some more info on that process. that http://www.foundationsu.com/articles/article/contentname/foundationsu-the-truth-about-your-credit-score?ectid=RachelCruze.com

  • StartingBabyStep1

    Should I close out my cc acounts or keep them open and just cut up the cards? I was told that if I close the accounts, there is a negative impact on my credit.

    • Ramsonian D00de

      Close them out! I’m sure Dave and Rachel would agree with me here- eliminate the safety net and it’s funny how much more careful you are walking the wire. Besides, a high credit score only means you are good at borrowing money. No more borrowing, eliminate that debt and build your wealth so you can start living and giving like no one else. Follow the baby steps and run like a gazel! Anybody can do this- and you can too.

  • Logan

    Rachel I want to teach my friends about saving money and not getting ripped off. My mom is teaching us about money and is funny cause she listens to your dad every day and her and my Dad keep saying gazel gazel gazel!!!!! Debt is dumb!!! What should I do?? Thanks! Logan

    • Logan

      oh yeah I’m 11. gotta go now. leaving for school. : )

    • Hey Logan!! The best way to teach others about being smart with money is to live it out. Show them how hard work and discipline, literally, pay off! Keep up the good work!

  • DrewD

    Hi Rachel, we have just started following you and your dad’s money plan and had a question with clearing out all debt and how the credit score is affected. There are so many businesses and employers looking at a credit score either for employment, auto rates and so forth that don’t deal with getting another loan but are making decisions based on the credit score. They aren’t going to take the time to ask our utility company, phone company and so forth to verify we are good at paying bills because they are using it as an indicator and not for loaning money. I guess I’m nervous about losing a good credit score. Thanks for your work, it has inspired our family!

  • Chris

    If you’re on baby step 2, and only have $1,000 saved. What happens if an emergency costs more than $1,000? How do you fund it?

    • Kevin

      Chris- It was this very reason (and that we were planning a child) that when my wife and I went through FPU we amended baby step 1 to be an amount we both felt comfortable with. That fund is in place to cover emergencies and also to help you and your spouse (if applicable) to calm the fear and feel “safe.”nnFor this reason we identified the number to where we felt that should be and worked to get it there. For us, that number was $5,000…but you’d have to ask yourself where this number is for you. we also use sinking funds now to help cover the now-identified “unexpected” things…yearly vet visit, memberships like Sam’s, auto registration/inspection. We were also initially good at emergency budget meetings to help redistribute monthly income even before we hit the emergency fund…which helped lessen the impact on it.nnThat’s how we dealt with it. Good luck to you! At this point, we’re 7 months away from being debt free (minus our house)…and that’s with a (now) one year old! You can do it!

    • Matthew

      What happens if an emergency costs more than $1,000 and you don’t have anything saved? Either way the money has to come from somewhere, and with an emergency fund you’re in a much better position that without. We also found the emotional security to be well worth the short term sacrifice to save up the cash.nnKevin’s suggestion for sinking funds is also spot-on. We use YNAB, but you can use physical envelopes or an Excel spreadsheet if you prefer. Good luck!

    • behindthecross@hotmail.com

      Th reality is, we likely didn’t even have a $1,000 towards an emergency, so begin somewhere. $1,000 is a pretty big start from nothing. And IF we are snowballing debt and a genuine emergency comes up that is more than $1,000, then we have learned that there are other options out there, including the money used towards snowballing.

    • rhondaleebaby69

      The idea of an emergency fund is great, but don’t think it’s going to save your bacon 100% of the time, no matter how much you have in your fund. $1000 definitely isn’t going to cover medical emergencies. Hell, $10,000 may not even cover that.

      • GeezLouise

        If you have insurance, you only need the amount of your max out of pocket.nIf you’re in dire financial straits, it seems risky to take on more debt. Or dishonest, if you cannot pay it.

  • Peter Poon

    This is the dumbest thing I’ve read in awhile. Credit cards are great if you use them responsibly. If you pay your balance in full every month, it’s like having a 1-month interest-free loan. And you accumulate those reward points, which is free money. Also, it’s much safer to carry credit cards than cash. Do you really want to be walking around with $200 every time you do your Sunday shopping? And don’t tell me you can pay with a check (most places don’t even accept them anymore) or a debit card (essentially a credit card with no Grace period our rewards).

    • James

      Peter, this is how so many end up in debt. Let’s face it. The reality is when you are swiping your credit card left and right, you’re not thinking about the money that you’re wracking up and what you are going to have to pay. So when you use a credit card you technically have not paid for what you are bringing home. When you pay with cash you FEEL what you are spending and have more control of your money. You actually THINK about the cost and value of what you are buying.nnnAnother important thing to consider, is what would you do if a crisis took place in your life? Job loss? Severe health issues? Vehicle destroyed? Critical home repairs needed? Bankruptcy? No matter how good we believe life is going for us, it can take a whole 180 degree turn instantly. If emergencies like this happen you can bet this is going to take a toll on your money. Would you want to have credit card money that you owe on top of things like this??? Heck no! Especially if disaster strikes the source of your income. Then you are stuck with money that you owe and there’s no way out! I hope this never happens to you. But I can tell you from personal experience that stuff like this CAN happen, my friend.

      • Peter Poon

        If you need to actually have little green rectangles of cotton in your hand to realize what you’re spending, then you probably do need to cut up your credit cards. When you pay your monthly rent, do you walk down to your landlord’s house with a stack of 100s that you had squirreled away under your mattress or in the cookie jar? Do whatever floats your boat, man. The rest of us who have entered the 21st century will use money management software and online tools to maximize our discounts. You ask what would happen to me if disaster struck? We have our checking account, savings account, 2 retirement accounts, college savings account, health savings account, equity in our 3 homes, and ZERO credit card debt. We’ll continue using our credit cards to get 1% cash back every month, thank you.

        • Jessa Moser

          Peter, the people who follow and live by Dave Ramsey’s philosophy believe that cash only is the way to go. It’s obviously you’re just on here to pick a fight. So please, do so elsewhere.

          • Jimmy mack

            I have followed Dave for a long time. It’s just that some of his fans reject this specific philosophy. Y’all are so deep into hating credit cards that it HURTS you to believe there are people that pay them offs and simply enjoy the perks. It is possible to enter every credit card transaction on a ledger and track sending identically to if you had written a check.

          • Michael Henke

            I am glad you are part of the 56 percent of Americans who pay off their card balances each month (consumer reports fact). Sad thing is 44 percent don’t.

        • Jimmy

          Right on! My feelings exactly. Love the security, love the points, pay it off monthly.

        • rhondaleebaby69

          A credit card was stolen out of my purse a couple months ago and thank god I wasn’t carrying cash! The thief was able to use my credit card at a couple convenience stores and fast food places where the transactions were low enough that a picture ID (or signature) was not required. I called my credit card company and they cancelled the card right away and reversed all the charges. Imagine what I would have lost if I carried cash? Side note: The police were able to track the thief and arrest him based on the trail of credit card transactions and security camera footage at each place.

          • Michael Henke

            Think of the time spent on the phone canceling cards, changing account numbers, and cleaning up your stolen credit. Cash it would just be gone. I have the same protection with a debt card, plus I can’t go into debt.

          • rhondaleebaby69

            If you’re using a debit card, that’s just like using a credit card without the benefits. No grace period (i.e. interest-free loan), fewer rewards (for most cases, no rewards). Plus a credit card actually provides more security. Credit cards have limits and in most cases require ID and/or signature. Debit cards are direct links to (as many on this board have said) your cash reserves with no ID requirement. It is a lot easier to have fraudulent transactions reversed on your credit card account than to get $20,000 returned to your bank account.

          • Michael Henke

            You are wrong, sorry. I have the same protection since I don’t use the pin. Also a benefit is no stress. I actually pay for the item when I buy it. Crazy idea.

          • rhondaleebaby69

            Yeah, you paid for an item now when you could have kept the money in your interest-bearing account for almost a month longer and paid the exact same amount later. Crazy idea…

          • Michael Henke

            Don’t talk to me about tenths of points in an interest bearing account for less than a month that is really a crazy idea.

          • GeezLouise

            If you spend about 15% more using plastic (about what surveys show) and get 1% rewards, you are out 14%.

          • jimmyv65

            Ive never had issues with my debit card, my credit union has a rewards program for using it, and offers the same protections as they would a credit card and I dont have to carry the cash with me. I know some on here say just use the credit card and pay it off each month, thats fine, but using my debit card I dont have to worry about sending in a payment. And since Ive stopped using credit cards, I have more money left over each month, even with using the debit card

          • David Ratliff

            Missy people would keep 20k in a savings account.nOnly money for bills and necessities on a debit card.nAlso on a debit card, when there were no funds the card stops working.nOn a credit card they will usually let the card go over limit so they can charge you 35 dollars for it.

          • rhondaleebaby69

            If you’re spending so much that you’re at risk your bank account runs dry and need overdraft protection on your debit card, then yes, you probably shouldn’t be trusted with a credit card….

          • GeezLouise

            Not accurate. Credit & debit have the same protections and your credit union or bank will put the money back. In my experience, less than a day to put the money back. Debit cards are used with PIN or used as credit cards with a signature.

          • Michael Henke

            Using a debt car I have the benefit of not going into debt. Credit cards and debt cards have the same security if you don’t use the pin on your debt card.

          • David Ratliff

            That very thing couldn’t been done with debit cards too! Debit cards are cash cards.nYou can do all the same things with your own money, not on credit, which is someone else’s money.nI think people are confusing credit and debit cash cards.

        • jimmyv65

          who allows you to pay rent with a credit card?

        • David Ratliff

          Kudos, you’re one of the responsible disciplined people.nAverage American has between 8-12 k in credit card debt.nIt’s those people he’s talking to.

    • Matt Lucas

      So many people tell themselves they pay them off every month and they don’t

    • jimmyv65

      My credit union debit card has a rewards system so I dont carry cash, I can use it to book flights, hotels cars catch is the money is already there, Im not borrowing it. last month I received $38 deposited into my account for using the card, not a lot of money I know, but they paid me for using my money

      • kevin

        And if you packed lunch or did some other cheaper alternative to any money spening activity you could prob save more than 38 bucks or what the banks percentage on spending

        • Tim Newton

          There is always a trade off. Sure I could change my oil, but would the 2-3 hours it would take me to do it be worth my time? Would it be done as well and would I know what other signs to look for? Probably not. nThere’s a tradeoff with convenience and money spent. I can make bread every day, but in the end it’s probably better for me to buy it and spend that time with my daughter. I’d rather use my debit card everywhere than waste my time on writing checks or have the danger of carrying cash with me everywhere. nAlso nowhere in his statement does he not say that he packs his lunch every day or uses the cheaper alternative. Stop deciding what he is and is not with zero evidence.

          • Jeff

            I think you’re changing your oil wrong…

          • Tim Newton

            It isn’t easy getting to things in my car’s engine. That wasn’t my point though.

          • David Ratliff

            If it takes you 2-3 hours to change your oil, you should never be allowed near a car, just saying lol.nTeasing you… Couldn’t help it 🙂

        • jimmyv65

          Well i do pack my own lunch , or i make a stew /hotdish to bring to work. by using my debit card last year i received $326 in rewards which was then used as an extra principle payment on my mortgage.

      • Mon Cheri

        I like that jimmyv65, what credit union do you belong to/

    • Kevin

      I agree I get on average two free vacations every year paying with my Southwest by Chase credit card. Just pay the balance on time and be responsible.

    • wally1121

      The key word is DISCIPLINE!nI have had one or more credit cards for over 45 years. nIn all that time, I have paid interest TWICE on major purchases it took me TWO months to pay off.nI hardly write checks anymore. I put almost EVERYTHING on my credit cards.nFor me, it’s an EASY way to pay quickly without hassle. nBUT — I keep track of what I have spent and know what I owe and reserve the funds to pay it off at the end of the month.nDISCIPLINE! If you don’t have any, I concur, cash is better.

      • David Ratliff

        And a debit card with no overdraft is exactly that a cash card.

    • T Dayton

      Then stop reading and following Dave Ramsey. If you don’t like what is on tv, you change the channel. Problem solved.

    • David Ratliff

      Using a debit card is using cash.

    • Mari Alvarez

      Not so dumb when you listen to Dave Ramsey’s advice and end up being a retired cop who paid off and owns her house outright, has 0 debt, and pays CASH for everything. I don’t owe anybody a dime and I have NO credit cards. At 56 I’m perfectly content never ever having one again! LIVE DEBT FREE!!!

    • Bonnie Gaither

      If you can pay your balance every month, why do you need a card? All you are doing is giving someone money to spend (your) money. That doesn’t make sense. You are paying more than what the purchase actually was.

      • rhondaleebaby69

        Your comment makes no sense at all. Even people who disagree with me re: usage of credit cards have to agree with me that paying your balance every month is a 0% loan. You’re not paying a cent more than what the purchase was worth. All you’re doing is deferring payment from today to the credit card payment due date. You’re actually making money (albeit a tiny amount) because the purchase amount is sitting in your interest-bearing account for anywhere from 10 to 30 days.

    • GeezLouise

      Not safer. You think a crook is going to be kinder because you have plastic to steal?

      • Peter Poon

        I think you’re missing the point…you’re giving up either your card or $200 cash. Which do you think will be easier to recoup your loss?

  • April

    Something that is really disappointing to me is when I was part of the TMMO forums online and other members would say credit cards are fine, and I would ask “should I cut mine up?” they would say no… only Dave does well without them because he is rich…. worst advice ever!!! Also when I took FPU at church the group leader said he uses credit cards and pays them off every month… he seemed proud of his discipline saying “some people should not use them”. He told the class this- people!!! Hello!!! If you are leading FPU please don’t say that!!!! I seriously don’t get that….. Weird… It shows that you should not believe everything someone says simply because they are leading FPU or on the TMMO forum and have lots of popularity. UGH…..

    • Two-Thousand One-Hundred

      How do you think he became rich? Not by maintaining credit cards. That is what he and his is trying to teach… that. they. is. not. necessary.

  • Don’t cut up your plastic! That’s silly. We get a free trip to Cancun every year by just using our card!

  • John Brewton

    The very best advice I ever received concerning money management came from the father of a girl I dated in High School. He pulled me aside and whispered, “if you spend less than you make, you will never have any financial problems”. This man paid cash for everything, his living expenses, entertainment, vacations, and even the family cars when they needed to replaced or no longer met the family’s needs. The only time I saw him use credit in anyway was to purchase his home, which he paid off prior to the mortgage due date. This family lived very comfortably without the financial stress of wondering where or how they were going to pay for their existence. He also taught the difference between want and need. I think a lot of folks get these two confused and are being driven by their wants rather than their needs. I am more than confident the emotional and financial benefit of living free from debt outweighs any perceived convenience buying on credit might bring. I guess that’s why we refer to it as being debt FREE.

  • Daffodil

    As soon as I get my refrigerator, paid of July of 2015, I will be putting the extra on my credit card. Credit, can be good IF you pay the balance off each month but it is a slave when you don’t. I’m sorry we too bought into the credit hype. I believe before each child, graduates from Highschool they should have money management class , they must take on learning to buget money. This is something I will be teaching my own daughter, because all kids seem to think money grows on trees, or because of credit cards mom and dad can and should buy it.

  • guinb

    ugh. same regurgitation of dave’s ideas. look, if you’re using a budget (which Rachel and dave advocate) then you won’t overspend on a credit card. also, how can anybody promote debit card use but not credit card use? wouldn’t overspending occur either way considering they are used exactly the same?

    • jimmyv65

      no because lets say you have a credit card with a $5,000 limit, but your checking account only has $1,000 in it. On a debit card you can only spend $1,000, on the credit card you can spend $5,000, so that now puts you $4,000 in debt

      • guinb

        but thats where the budget comes in. if you only have $1000 then you on budget for and spend $1000 no matter what your credit limit is.

        • jimmyv65

          And that’s why this article wasn’t for you. if everyone did that, there would be no such things as credit cards. The vast majority of the people carry a balance on their credit cards, that is why credit card companies exist

          • Two-Thousand One-Hundred

            Exactly

    • Two-Thousand One-Hundred

      So, why are you trolling Rachel’s page? You know what the Ramsey crew preach. If you do not agree, then you should not be reading their regurgitated information. IJS

    • personal finance wizard 101

      you retarded if you think they are the same thing. one of them you have the money in your account and the other one you don’t. yeah they look the same good detective skills, they are ont the same at all dummy.

  • Leighanne Lankford

    I have not had a credit card in over 6 years. I don’t need one. Rachel’s advice is spot on. Whenever the cashier asks me to sign up for a credit card for a 10% discount or whatever they are offering that day I just point to my young daughter. She says “We don’t believe in credit.” Life without credit cards is life without chains.

  • Brenda Schilling

    100% agreed. Consolidating all of our debt and cutting up credit cards was the best thing we ever did. It probably saved our marriage. We have continued to pass the lesson on to our two kids. It’s a huge temptation in college when you’re broke, and they haven’t fallen for it yet. I am a teacher and each year when I have graduating seniors, I tell them that my best advice to them is not to get a credit card.

  • Rebecca Rice

    Everyone saying “not true- just be responsible and credit cards are awesome” are missing the point.

  • Diane

    Will my MC debit card provide the same protection as my VISA card? If so, then I might cut up my VISA and close the account. But first, I need to be sure because I cannot afford someone to clean out my bank account. Any advice?

  • Western Hope

    What about the benefits of them, to help establish credit to qualify for a mortgage ? Most lenders want to see at least two years of established credit from something more than a cell phone bill. Just saying..

    • rhondaleebaby69

      Ramsey glosses over the importance of establishing credit in his program. He can do this because he became rich from selling his program and from the fees he collects from the ELPs (financial advisors) he recommends investing with. He has the ability to pay cash for a new home (unlike 99.9% of the US population).

    • GeezLouise

      Find one that does manual underwriting, maybe Churchill.

  • Ms. Long Hair

    I have 7 credit cards and a score of over 800. There is only a balance on one of them right now that I could pay off with one payment whenever I want. I use them for my convenience. I pay recurring monthly bills that are always the same amount automatically then just pay off the card. I very rarely use them for normal shopping. I use them for big ticket items that I don’t necessarily have that much in my checking account for and then pay them off promptly. Last year I got $300 in rewards that I used for gift cards for Christmas. I don’t carry “debt” that I can’t afford.

  • Christine E

    I’ve been through the Dave Ramsey program twice. Each time I was hit hard financially afterwards. This last time it was for an extended period of no work. Because if my amazing credit having owned a business I was able to “survive” using my credit cards. By the grace of God and answers to prayer after two and a half years I finally received a contract that paid almost double the last one. I feel Dave’s advice is amazing…but there is no magic formula. Many of “us” are self employed or are single parents and in my case…both and sometimes only God has the perfect solution.n

  • Tracee Okrainec

    There are times that a credit card is a necessity, due to the nature of the transaction. That said, if the balance is paid in full immediately after the use, you’re not in debt…

    • GeezLouise

      When? No one has ever rejected my debit card.

  • jackie sit

    I follow Dave Ramsey’s book…i also hate debt…but if you pay off your credit cards weekly instead of monthly you most likely…if responsible…won’t get off track. Love the book and the principles of it…but I do love rewards for responsible spendingu263a.

  • Kevin LeRoy

    I agree with much of what Dave says. However, paying cash for things is not always feasible. Especially in my neck of the woods where a 50yo House w/ 1700 sq ft will cost you upwards of $500k. A Car (2-3yo w/ not much mileage) will cost you upwards of $10-15k. Not to mention the amount of money it takes to pay for insurance, gas, etc.

  • Pamela Rodgers

    Hi I’m 52 yrs old and never used a credit card the interest your paying…stays in my pocket every month and debt free…I know a lot of people who owe a lot of money in debt,wouldn’t want to be in debt right!!Jsay’in ud83dude00

  • Peggy Hoyman

    Our society has been brain washed! We need to get back to the days where if you don’t have the cash …you don’t need to buy it. We are a NEED now society and it has gotten out of control!!! Credit Cards are BAD BAD BAD! nDebit cards are like cash in your pocket – You don’t need a credit card! This is the smartest thing Ive read in a awhile!

    • Christine

      Coming into the Christmas season, I am ECSTATIC to be using cash ONLY to pay for presents. To the previous comments about credit being the way to go for perks/rewards, here’s an example: I got a check back from a work credit card for over $600. Sounds like a lot, right? That was over THIRTY THOUSAND dollars in spending. It is absolutely RIDICULOUS to see that as a “positive” – we could easily earn/save the 600 ourselves by paying attention.

      I hate hate hate credit card bills. The beauty of using a debit card is, it’s one and done, no “second” bill to pay, no risk. I’d rather have the simplicity and my time. My grandparents didn’t deal with all this – they used cash, check and worked. For readers who haven’t ever lived without the “convenience” of a credit card, don’t knock it ’till you’ve tried it. It’s different. It’s less stress. Even if you’re paying it off every month, it’s still not better.

  • bogart_83

    I’m a regular credit card user, and I never carry a balance. Because of credit cards I can fly pretty much anywhere in the world for free. Here’s how I do it.

    I think of a credit card as a checkbook that pays me to keep it balanced. We budget every month, down to the last Netflix account including savings. Then, whatever we have left is discretionary; we can spend it how we like. Usually most of that is on groceries, gas, and other necessities. The key to this method is that every time we whip out the plastic, we write down what we spent in a free app called Spendee. That way we can see how much we have spent from our discretionary fund, and how much is left for the month. We only ever spend what we have, and pay it off at the end of the month.

    It’s just like writing checks and keeping a checkbook, only American Express pays me to do it. If you have discipline, there is no reason why you can’t do the same.

  • Stacy

    In my opinion responsibility with money lies in you , not the credit cards. We never overspent with credit cards or I can’t think of anything which we bought just because of credit cards. We buy our regular stuff with credit cards and they r easy especially for travel. We pay them off at the end of every month. My husband does a travel job and his co pays off his travel expenses later. He puts them off credit card and then he gets paid at the end of cycle. Otherwise he has to spend money from his own pocket. Also emergency funds are always there.

    But in real emergency you cannot drain your funds totally. I mean if i had 20k in the bank and loose a job and get into emergency I would use part of it from bank since you can’t pay things like rent with credit card . For other expenses I would put on credit card which would give us buffer time to sort the problems. They also give fraud protection and we get so many rewards.

    Yes I agree no one gets rich with credit cards but as a middle class person I definitely like to get privileges like free vacation a year or cash back . Otherwise I will have to pay for my vacation.

    I would definitely recommend putting away credit cards if have temptation to overspend . It is dangerous. For us we run everything in budget and they make our life simpler. So why not be smart and take benefits of credit cards. I mean there is no reason for us to cancel them and make our life tougher when credit cards are helping us.

  • Stacy

    i don’t agree with that . Credit cards are bad for people with no self control. Why would a financially responsible person swipe anything just because you have credit cards . I would not do that . I have a budget and write down each and every expense . I roll on a budget . I just buy what ever there in my budget with credit cards. I pay them off in full every month .life is easier with FICO score. Because of our high scores we could get a home mortgage with very low rate of interest . If you do underwriting to get your home , the process can be difficult . Moreover the interest rates can be higher . The problem is not with credit cards . The decision making to financial planning should be there in your mind. I would want to spend my money wisely and I am giving to do that . Just because I see a credit card does not give me any urge to swipe it .