Friday, September 11, 2015

Why I Ditched my Credit Cards

I'm not saying I cut up my two credit cards; what I'm saying is that I no longer use them. I no longer rely on them.

I wasn't chased by collectors or have a super low credit score. I wasn't spending recklessly (anymore). I simply chose to stop using my cards as a financial improvement. Granted, I would only use them if A) I have the cash in my bank to transfer to my card the second I use my credit card and B) for deposit such as hotel rooms, etc. and C) for emergencies like my dog getting sick or something like that.

I have friends that automatically whip out credit cards when purchasing items. These people are broken into two categories: those who use the CCs to rack points up and pay off the balance in full, etc. etc. and those who put it on the credit cards because they're low on cash.

I used to rack my bills up endlessly. I hated the feeling of constantly paying my credit card bill. There were months when I struggled because my hours were cut short from work. But when I do pay off the month of September, October rolls around and I feel my paycheck goes to my CCs automatically because I'm usually owing something, regardless of how much I paid off last time. And we're not talking about $50, we're talking about couple of hundreds.

I ditched my credit cards because I felt like I wasn't actually saving at all.

All the long hours I worked, I used it to pay my CCs on purchases I probably regret. Since switching to my debit card aka cash I actually have, I spend less.

I value what I purchase. I think about my purchases rather than simply put them on my cards. I save for stuff I want and it feels rewarding! Putting items on my credit card and later paying the bills makes me somewhat stressful and unhappy with my purchases.

And you might think, so what happens if you miss out on that opportunity?

Then so be it. There's no item that I want badly enough to whip out my credit card. If I miss that opportunity, I see that as another chance to save. I see that as, "So I didn't get that bag I really liked. At least I saved $200!"

And same goes with a sweater at Forever 21. $25 doesn't seem that much but the moment the bill comes, you automatically just spent $400 that month. Take it from me, little things add up easily.

Right now, the only things I have on my visa bill is my Netflix and my cellphone plan. Other than that, nothing else it put on my card. It's such a nice feeling to be free from constantly paying my bills. I love it.

I was taught this lesson by Mark. He doesn't have a credit card so he pays off everything with cash and I like that. I don't want to be tied down to paying bills. He essentially has a lot of savings because he's not using his paycheques to pay for previous purchases. He travels a lot because he saves all his paycheques.

As someone that pays their credit card every month, take the challenge and skip your cards for a month or so and see how liberating it is to not see your money go back into credit cards. Watch your financial habits improve when you realize what you spend your credit on.

There's a saying, "If you don't have the cash for it, don't buy it." I never realized how true that was until I was free and see my friends complain about paying their bills.

Credit cards aren't a bad thing but I feel like a lot of us easily abuse it or don't realize just how much their paycheques is tied to their credit cards. It shouldn't be that way! Your paycheque should be tied to your bank account, not your credit cards!

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