How I Live Without a Credit Card

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Updated on Tuesday, January 5, 2016

Black woman using credit card and laptop

I am 29 years old, and I’ve never had a credit card – ever. I didn’t know this was unusual until other people were shocked and surprised that I have never had one.

Here are the main points that people like to know about my life without a credit card.

Why? Because I’m a Spender

The main reason I do not have a credit card is because I am a spender by nature. I just like to spend money. Having a credit card would be tempting for me. Some say that I don’t give myself enough credit and that the temptation wouldn’t be as bad as I think. However, these people are wrong. I know they’re wrong because I know myself better than they know me. I’ve actually dipped into my savings before for non-emergencies – just because I wanted something so badly. This is how I know that I cannot have a credit card. If my savings is at risk, I know that a card would be even more tempting for me.

Initially, I didn’t get a credit card because my grandpa told me that “using a credit card was like taking a mortgage out on your clothes”. This sunk in morally for me, and I decided I didn’t need a credit card. His point was more directed at carrying a balance on a credit card, which we can all agree is not a good idea, but I still decided I didn’t want anything to do with it.

Over time, I’ve deciding my personal temptation to spend money is high enough to warrant continuing to not have a credit card. This is why I use my debit card for almost everything.

I Use My Debit Card Like a Credit Card

I use my debit card for almost all of my purchases (the alternative being cash). I always choose “credit” when I’m paying with my debit card, because it’s best to minimize the use of your pincode as much as possible. In addition, Visa and MasterCard both have a business promise to provide zero liability protection on a debit card if you first, take reasonable care to protect your card and second, report the fraud in a timely manner. However, because any fraud on my debit card means direct access to my funds instead of fraudulent charges on a credit card – I take other measures to be proactive about protecting my information. I make sure that my card is up to date, and I’m usually issued a new card every one-to-two years.

I can stay at a hotel, rent a car, book a flight, and do anything else I’ve ever wanted to do by using my debit card. I always make sure I have a small cushion in my checking account, because in some instances, there will be a higher hold charge when using a debit card (e.g.: staying at a hotel).

Personally, I have never had a problem using a debit card as credit. That’s not to say it can’t happen – it just hasn’t happened to me. I know plenty of people who have had problems with credit cards and / or with debit cards. I make sure to monitor my accounts, and pay close attention to my credit so if there is any problem, I know about it immediately.

I Pay Close Attention to My Credit Reports

Because I only use a debit card, I am on heightened alert to pay close attention to my credit. I order my credit reports from the three main credit-reporting agencies (Experian, Equifax, and Trans Union) every year. I look for errors or fraud, and I report any incorrect information immediately.

My Credit Score

The biggest question people have for me is how I keep a high credit score. I have two responses. First, I actually do have a high credit score because of my student loan debt. I monitor it annually, and I know that it’s in good shape. I am aware that this won’t last forever, but it does work for now.

Second, I am not as concerned about my credit score. For me, credit is a “debt score”. Unfortunately, our system measures your creditworthiness based on how much debt you have and have paid off, not on how much you have in assets. For example, you could have $2 million in the bank, but if you never took out a line of credit (debt), you wouldn’t have a credit score and wouldn’t be able to get financing. I wish that the underwriting was different and that assets were measured and included, but since they’re not, I understand the need to have a high credit score if you want to buy expensive things, like a car or house.

My personal financial goal is to be financially free, without debt. I don’t want to take out more debt, so I am not as fixated on having a high credit score.

I am not so naïve to think that I may never need my credit score (particularly if I want to buy a house), but my goal is to live according to my personal values, and not have my credit score be a determining factor in my financial decision-making. I will likely revisit this when my student loans are repaid, but it will probably be in the form of financing something when I have cash in the bank to pay for it solely for the purpose increasing my score, as opposed to using a credit card. I do not foresee me ever using a credit card.

I understand that people without student loan debt may need to use a credit card to get a high credit score, but this just hasn’t been my experience. Personally, I have student loan debt and I am a spender, so it doesn’t make sense for me to have a credit card.

Points I Give Up

People also swear by their credit cards for the points that they get for spending. They go on trips and get material things that I cannot get for free by using a debit card. This is one area where I am aware of the perks I’m missing out on.

For me, I compare the perks I’m giving up on the one hand to the certainty for being consumer debt free on the other hand. I am a spender and I like to buy things. I would much rather not having the temptation and remain consumer debt free than benefit from credit card perks.

I think I could get a few free flights out of having a credit card, which would be amazing on the budget I’m on; however, I am certain it would not be worth it if I got into debt and couldn’t repay my card every month.

This is a personal choice that works for me.

I Don’t Like Debt

I don’t like debt, and I don’t like being tempted to spend more money than I otherwise would. I am committed to repaying my student loans and building wealth. Personally, I am not focused on credit card rewards or building my credit.

I like my life without a credit card, and I plan to keep it that way. It works for me.

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