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Debt-Free Living

Why I Hate Credit Cards

I’ve heard all the reasons why you should have a credit card, but this one bothers me more than any of the others.

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  • Mannie Love

    Rachel, I love your video blogs. My favorite words of this year is to be intentional with money! Planning and budgeting is a challenge with my irregular income. But creating a international income and managing it the right way is why I love everything you and your dad do.

  • Instead of being pay day it becomes exchange day. Love it when you said it is like living your life looking in the rear view mirror. True! We are still snowballing our debt, but we are closer than ever to being debt free! Love you guys!

  • Chris Kurland

    I hear you load an clear on the credit card! Here is situation…I do alot of ordering for my business and some personal online. I do have one credit card I use for this. Mostly because I have dealt with identity theif for many years and found I don’t like using my debt card online. I am very disciplined and when I collect the money for my business orders I set it aside for my cc bill. And, when I order for personal, I set that money aside as well. I take cash from the category envelope and clip to my cc index card where I list what I charge. In fact, if my kids ask me to order something for them, they have to pay me before I will order it! This way when my statement ends and the bill is due, I have all the money to cover it! Just deposit and write a check and mail! n

  • Ken

    I don’t understand why you and your dad villainize credit cards so much. I have followed your dad for years and absolutely love your vlogs, but this is one point I disagree with you on. A credit card is a tool, you wouldn’t throw away a hammer because you whacked your thumb putting in a nail – no, you practice with the hammer and learn to use it properly. I agree that credit cards are a more advanced personal finance tool and a beginner should forgo them – but just like my checking and savings accounts are extensions of my finances, my credit card is treated no differently. We only spend what is budgeted and carry no balance. I don’t spend money on my credit card that I don’t have allocated for it in my budget / bank account.nAdditionally, I use my credit card to leverage $1200-1700 in cash back and other discounts every year. it just takes knowledge and discipline.

    • Matthew Turner

      I agree with Ken. Using a credit card in conjunction with categorical budgeting is just smart. I totally understand that, statistically speaking, most credit card holders fail at using a card wisely. But if you do pay it off every month, and budget categorically (which everyone should do regardless of how they pay), a credit card is basically free money (if you get one with perks).

    • Lynnette Marie Adams

      I agree with you , but MOST people are not disciplined to do it. I think in the beginning it’s good to get rid of the cards till you are acclimated with a budget and being responsible. I disagree with her on the miles thing. I travel OFTEN and I absolutely use my mileage and those free trips come in handy. What I don’t need is 11 credit cards which I had at one point and I am on my journey to pay ALL of those off and only have ONE.

    • Robert Chapman

      Exactly, Ken. I think what’s happened to Dave is that he spends three hours a day talking to idiots and so starts to assume everyone is going to be irresponsible with a credit card. If you are disciplined, pay off the balance every month, and buy only what you would otherwise buy with cash, it’s a smart program. In your case, Dave would leave $1200 – $1700 a year on the table. Now that’s just stupid.

  • stxpx

    I agree with you about the problems that can be caused by credit cards, but they are safer than debit cards; when a debit card is stolen/hacked, you will not be reimbursed for the theft but with a credit card, you will be reimbursed for all but $50 of the theft. When I was younger, I wasted a lot of money on credit card interest and late fees, and carried a balance. Now, though, I keep just one credit card and rarely carry cash. I mainly use it for intentional, planned purchases (fuel, utility bills and groceries), I do use the reward points, and always pay it in full. Your video has motivated me to be more thoughtful before using it for anything else, though. Thanks.

  • Anastasia Kenney

    Rachel, what about rental cars? Companies do not let you use a debit card for a car rental. For those of us who need to use rental cars, what answer is there but keeping a credit card?

    • bitsofsweetness

      Check with the company. I was just able to use a debit card with Enterprise because I had a return airline itinerary.

  • DW

    Typically a credit card purchaser ends up paying for each item 2-3 times. The first time is the actual purchase, the second time is when the monthly bank statement arrives, and for those that carry a balance the interest and fees can build up to the cost of the item for a third time.nIf you have to pay for a negative event in your life (failed medical, death, legal fines, etc), when you see the credit card bill again; then you get upset all over again because the issue still isn’t over yet. nPay for something ONE time, and move on with life.