I’m sure everyone has their own reasons for using or not using credit cards. My husband and I had several conversations and did a lot of researching before finally making the very scary decision of cutting up our credit cards. We listed out all of our pros and cons, and decided that we were really just keeping them around for security; because it just made us feel secure in case we had an emergency. Yep, we had a ton of rewards points which really in the end are kind of a joke, and the backing of the credit card company, and travel insurance, and the list goes on and on.
My Safety Net
We weren’t impulse shoppers and we usually didn’t hold a huge balance on any of our cards. Paying them off and cutting them up was a pretty quick process once we decided on it. We were stuck on thinking somehow these little plastic cards were going to save us from a disaster that was just waiting around the corner. I had a Firestone credit card that I applied for as soon as my warranty and maintenance plan on my car expired. What would I do if something happened to my car? How would I survive without my car?!
The fact is, emergencies happen. Cars break down and AC units go out and the pool pump will stop working. Sometimes all at the same time, usually in the middle of summer, especially if you live in the desert. If emergencies are unexpected, how can we possibly know when they’re going to happen? Well, we don’t know WHEN, but we do know that they WILL happen, eventually. I shifted my thinking and feelings from Credit Card Safety Net to Emergency Fund Safety Net. And I found that I had a false sense of security with my credit cards. If I used a credit card to pay for something like new tires, I would have to pay that money back anyways. But what if I couldn’t for some reason? Having cash in my emergency fund instead of a credit card is real security. Just pay for the tires and be done with it. No worries and no what ifs, and no bill to keep paying on.
My husband’s reasoning for keeping our credit cards were more logical. With identity theft being such a huge problem right now, he liked having the security of using only his credit card to make purchases. If the card number was stolen, he had the backing of the credit card company. If his debit card was stolen, the money in his bank account could be taken out.
You see that VISA logo on your debit card? If you do not use your PIN to make purchases, you are backed by VISA if your card number is stolen. Now, if he uses his debit card, he only uses it as Credit at the register. Otherwise, he likes to just carry cash on him.
So why not just keep that little piece of plastic tucked away in a safe? If we don’t use it, what’s the harm? Well, we are currently on our way to financial freedom. We’re following Dave Ramsey’s Baby Steps that you can read more about in his book The Total Money Makeover. We knew that this was the first crazy thing we had to do to really get our Baby Step #2 on a roll. It comes down to a change in habits and behavior. Debt free life is so close now – just a few months away!
What are some of the things that keep your credit cards in your wallet?