What's a Credit Card?

When I worked at an office job a few summers ago, I remember talking to a really sweet old lady on the phone who needed our service. As we got to talking, I asked her how she would be paying for the service, and she told me, "Cash, only cash. My husband and I have lived over 50 years without a credit card, and we don't want to start now." 

For some reason, that always stuck with me. I was impressed not only with her straight-forward manner, but also because she actually survived without a credit card. If she wanted something, she told me, she saved for it--and that's how she and her husband lived their life. 

It seems almost impossible, right? Buying things on credit is not only convenient sometimes, but let's face it--it helps to build your credit score if you are responsible. And I believe, too, that if you're taught at a young age how to manage a credit card, those habits will remain with you throughout the rest of your life, and most likely they'll translate into other useful areas in the future. 

I decided to look more into this idea, to see if this woman and her husband were all alone in their lifestyle. I found out that many people--even those who have been in the depths of debt--have decided to cut up their cards for good and simply live differently. 

Over at a blog called No Credit Needed, the author (who is conveniently called 'No Credit Needed,' or 'NCN' for short) gives personal testimony of how he/she got out of debt and remains that way to this day. Here are a few highlights of the article:

• Establish a $1000 emergency fund. This might take awhile, but because that fund is always available, there is no need to use a credit card in case something unexpected happens. 
• Open a secondary checking account. NCN's account held only $500, and this account was used only for online purchases. This was, in a way, NCN's debit card protection plan. If this account were to be compromised by a third party, the most that would be taken would be $500. This, too, also curbs online impulse buying.
• Personalized envelope system. Using physical envelopes in the beginning, NCN delegated how much money he/she would spend that week. Now, because it became so habit forming, envelopes are not needed, and that day's money can be carried around in a wallet.
• Plan for the week. Instead of finding yourself in a situation where you don't have enough money to pay for something, so instead you'd use your credit card, NCN states that planning will take that impulse out completely. There are plenty of budgeting and planning tools out there, but NCN uses You Need a Budget as a helpful resource. 

It can be done, ladies and gentlemen. It's not going to happen overnight, and it's not going to be easy in the beginning. In fact, I can imagine there being a few slips along the way. But the most important thing is that you stick to it, no matter what, if this is the kind of life you'd like to lead. 

I'm not saying credit cards are bad or evil or should be avoided. There can be some benefits to them. But they aren't for everybody, and if you're inspired by the sweet old lady I talked to on the phone at my job or by No Credit Needed's story, there is nothing stopping you from doing the same. 

Keep cool my babies! 

Michelle