My wife and I finally did it. We got rid of our last credit card. Last February, we got a love letter from Capital One. In that letter, they stated that they were going to raise our interest rate from 8% to 17% for no apparent reason. We used the card occasionally, and haven't carried a monthly balance or paid interest on the card for a couple of years.
Inspired by Dave Ramsey's books and website, we decided we're going to stop borrowing other people's money and thus being required to play by their rules.
This morning I called Capital One and closed the joint account. This evening, we decided to light a fire in our backyard fire pit and roast some marshmallows and credit cards. The video above is one of our credit cards. It didn't give up easily: no bright flames or puffs of smoke, just a slow, smoldering death.
As a substitute, we have two checking accounts, one at a bank and one at a credit union. We'll keep a few hundred dollars in one of them for the occasional online purchase, and the other one will continue to be used for our normal day to day purchases.
From now on, we will be planning our purchases, spending money we already have, and we will no longer have any worries about whether the last credit card bill was paid on time.
But, you may ask, what about EMERGENCIES? How will we survive if something unexpected comes up? As it stands right now, we have almost as much in savings as the our credit limit on that card. If an emergency came up, give me two minutes on the computer to transfer the money into my savings account, and I'll pay for the emergency with my debit card.
Have you considered getting rid of your credit card(s)? Please post your comments below.
4 comments:
I agree with the theory of getting out of debt wholeheartedly, however, I disagree that there are no responsible credit card users out there. Ryan and I use our credit card for all of our everyday purchases, bills etc. and have never carried a balance or paid a late fee or finance charge. We get 3% cash back on all purchases, and have recieved several nice sized checks from the credit card company. They pay us, we don't pay them. We only make purchases that we have money in the bank to back up. I don't think it is wise to carry lots of cash around, and cash leaves no paper trail. It is hard to keep track of. Not to mention, I have a hard time giving up the ease and convenience of a credit card. I realize that most people don't use credit cards wisely, but I believe with self discipline it can be done. I just didn't like how Dave Ramsey made it sound like NO ONE can wisely use a credit card.That said, I think it is great that you guys are doing what is right for your family. Financial goals are so important!
Both Monica and I will continue to use our debit cards. We'll be spending money already in our checking account, which has a self-imposed spending limit, 0% APR, no late fees, and a paper trail.
I have Credit Cards but dont use them, Canceling credit cards goes against your credit score.
Good for you guys, Kevin!
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