Managing Money

How to Kick Credit Cards to the Curb

Female hands cutting credit card with scissors
Written by Jason Cabler

It’s easier than you think.

Is it really possible to stop using credit cards and still live a normal life?  Well, yes and no.  You can definitely live without using credit cards, but you won’t be normal if you do. And that’s a good thing, by the way!

Spending more than you make

Consider this: The average family has well over $15,000 in credit card debt. When you’re that deep in credit card debt, it’s costing you a ton of money in interest and fees every single month.

And if you’re like most people, credit cards are enabling you to spend more than you make every month, which isn’t sustainable over the long term.

Myths about credit cards

The first thing you should know is that, as a society, we are practically addicted to credit cards.  Most everybody has used one at some time in their life, and over half of people with at least one card carry a balance.

That means way too many people (maybe you) are wasting a ton of money on interest and fees.  Not to mention that credit card spending is one of the main reasons so many people spend more than they make month in and month out.

So why do we do that?

It’s because we’ve been convinced of the magical thinking that credit cards are a necessary part of life. That’s just a myth. There are also more specific myths about credit cards that most people believe.  But when you consider reality, these myths just don’t hold up.

For example…

  • You need a credit card to rent a car: Totally false.  Most rental companies are just fine with renting you a car using a debit card.  I’ve done it probably a dozen times over the years with no problems whatsoever.
  • You need a credit card to rent a hotel room: Nope. Hotels are glad to take a debit card as well.  I only use a debit card when I travel. I have used my debit card at cheaper hotels and more expensive ones too.  In over a dozen years without credit cards, I’ve never had a problem or been inconvenienced at any hotel I’ve stayed in.
  • You need a credit card for emergencies: Not true. This is one of the biggest myths people believe about credit cards.  If you’re smart about putting together a proper emergency fund (even a small one), you simply don’t need a credit card for emergencies.

The interesting thing about having a credit card “only for emergencies” is that it tends to get used when cash flow gets a little tight due to a lack of good planning, causing you to carry a balance.

The myths don’t hold up under scrutiny

Most people just blindly believe these myths due to excellent marketing by the credit card companies and the herd mentality that says “everybody else has one”.

But does getting financial advice from a credit card marketing campaign or the average broke person seem like a good idea to you?

It sure doesn’t to me, but too many of us still do it anyway.

You gotta commit to being different

So now that you understand credit cards are not essential to your financial well-being, where do you go from here?

The first thing you have to do is make a commitment to getting rid of your credit cards for good. Decide that you’re done being like everybody else, falling prey to the marketing hype and the paycheck depleting, never ending payments.

Commit yourself to cutting up your credit cards, closing the accounts, and never using them again, not even for an emergency. Go ahead, forget about them forever.

Make a plan to live without credit cards

Once you make the commitment and decide you’re done, it will feel a little weird at first. You’re going to feel naked. But that’s OK, this is a good kind of naked, not the mother-in-law-walking-in-on-you kind of naked.

Anyway, cutting up your credit cards and committing is only half the game. When you completely commit to going cash only, you have to have a plan.  And any good plan for going cash only needs to include at least two essential parts: a budget and and an envelope system.

The budget

Why is it necessary to do a written budget when you get rid of our credit cards?  It’s because now you’re spending only what you have instead of spending more than you make, which is what usually happens when you use credit cards.

Do a zero-based, balanced budget, and give every dollar a job to do on paper before you spend it in real life. Check out this page where you’ll find everything you need to do a killer budget.

Start an envelope system

When you ditch the credit cards, that means when you pay for things, you only use cash or cash-based transactions such as checks, bank transfers, debit cards, or even an app on your phone that’s linked to your debit card.  That way, you will never spend more than you have available.

When paying bills, you’ll probably want to use a bank transfer or a debit card.  But for most of your regular purchases, cash can be very handy. Learn how to start an envelope system here.

Never go back to credit cards

When you finally commit to living without credit cards for good, you’ll discover that it feels weird at first. Any time you develop a new habit it feels foreign, but it quickly becomes normal and you’ll wonder why you didn’t start using cash a long time ago.

When my wife Angie and I finally cut up our credit cards for good, I’ll be honest, I was concerned. It just felt strange. But as we began budgeting and using our envelope system, after a few months it became our new normal.

It just made sense. We no longer spent more than we made on junk we didn’t need. We started to think more about how we spent money instead of mindlessly swiping and signing. That one decision has made all the difference in our finances!

The neat thing is that anyone can do it, even you.

I don’t care if you have a low income and depend on credit cards to get you through the month- when you’re willing to commit to the process, you can make it work.  You’ll never have to give those stupid credit card companies another dime… ever!

About the author

Jason Cabler