I’m 28 years old and have never had a credit card. I didn’t think this was strange until I talked about it more and saw how other people reacted. There is definitely a lot of confusion. Since then, I’ve learned that I’m in a very small group of people who don’t use credit cards.
Because of my past, I’ve never had a credit card for two main reasons: 1) My grandfather told me not to, and 2) I like to spend money, so I don’t think I would always pay off my credit card every month.
The Plan for My Money
When I was in my late teens, my grandpa told me, “Using a credit card is like taking out a mortgage on your clothes.” It looks like I’m easy to convince, because that’s all it took. I never asked why or gave it a second thought. My grandparents are very thrifty and have a lot of money. I thought and still think that they are good financial role models and that they know what they are talking about when it comes to money.
The second reason I didn’t get a credit card was that I was always spending money. I usually buy things based on how I feel and then try to explain why I did it later. I like some of the nicer things in life, and I think it would be very hard, if not impossible, for me to only use my credit card up to the amount I could pay off every month. So I don’t even want to be tempted in that way. I know that not everyone is like me, so I don’t think this is what everyone should do. But if you’re curious, here’s how I get by without a credit card.
How I get things done without a credit card
I’ve never considered using a credit card. Not ever. I never thought I should have it when I was growing up, and that hasn’t changed. I saved money over the summers while I was in college and used that money for any extra spending money I had. Now, I do things the way they used to be done: cash only, baby. Using my debit card as credit is more like the “modern way of doing things the old way.” I can only spend what I have on my debit card. When I use my debit card, I choose “credit” instead of “debit” so that I can get all of the fraud protections that Visa has to offer. I always have enough money because I only spend what I have in the bank.
My Credit
My grandfather tried to convince me not to get a credit card, but no one tried to do the same thing with student loans. So, by the time I finished law school, I owed $206,000 in student loans. Now, I owe $157,000 in student loans. Student loans are reported to credit bureaus as instalment loans, which is different from credit cards, which are reported as revolving credit. This means that I can build my credit by paying off my student loan debt. Because I always pay off my student loans and have a number of student loans on my credit report, I am building a good credit history and have an excellent credit score.
Because I have a lot of student loans that are being reported, this works for me, and as a result, my credit is great. I know that your situation is very different from that of someone who doesn’t have credit or student loans. For me, student loans help me build credit, so I don’t need credit cards.
I will say that having a good credit score is important to me, but it’s not as important to me as not being in debt and having a strong financial base. I don’t know what I’ll do once I’ve paid off all of my loans, but I’ll worry about that when it comes (I know it will not be getting a credit card though). My credit is in great shape right now because of my student loans.
The Good Things I’ll Miss
I’m well aware that I’m turning down miles and other rewards from my credit card that could “save me money.” But I know who I am. Because I like to spend money, I know that a $400 flight is not worth it. I’d much rather save money ahead of time and pay for things with cash than have my credit card as a backup plan. It’s just how I feel about credit cards and consumer debt in general: they’re just not for me.
On one of his shows, Dave Ramsey said, “If debt is an option, you’ll always be in debt.” I really think this. I don’t even give myself the chance to get into consumer debt because I don’t have a credit card. And I think that $157,000 in student loan debt is enough for the rest of my life.
My Philosophy
I have never thought about getting a credit card. I think this is a great example of what can be done with the right mind-set. Only because I was determined not to use credit cards did I stay out of consumer debt. It has also helped me get better at telling people “no.” Due to the number of times I’ve turned down cards at stores, I’d say I’m a pro at saying “no.”