First Person: Learning to Live Without Credit Cards

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Over the past year my husband and I have paid down our credit card balances, and are now living credit card free with the exception of emergencies. Since retiring our credit cards, we've been forced to change the way we shop and spend. No longer having the luxury of charging things has also given me a fresh outlook on our budget. Here are a couple of ways our finances have changed without credit cards, and what we use our cards for now.

No more impulse spending

As much as I like to flaunt my self-control where my spending is concerned, I have to admit that I often overspent when I was using my credit card. Knowing that I had the card to fall back on if I spent too much money, or knowing I could pay with the credit card and worry about paying for it later always led me to buying more than I should. Now that I've retired my credit card, I no longer have a "guilt free" way to spend. I know that if I spend now it's coming right from my family's budget, and that has helped me resist the urge to buy on impulse.

More money left in our monthly budget

When our credit card balances were at their highest we were paying nearly $200 in monthly premiums. Now that we've paid one card off and are well on our way to paying off the second, we are only required to pay $50 a month. That means we have an additional $150 left in our monthly budget. Of course there are a lot of places we can use that money, so it's not "free money." However, no matter where we spend the money it's better than using it to pay back high interest charges.

What we use our credit cards now

Although we've retired our credit cards, we haven't closed the accounts. There are several reasons we decided to leave the accounts open, but it was mainly to keep the line of credit open for emergencies. We have an emergency fund, but it's always nice to have another means of paying for things in case we face a worst case scenario, and that's where our credit cards could come in handy.

I'll admit the thought of being credit card free was a bit scary. I've had my card for about 15 years, and until I quit using it I never realized how much I depended on it. Retiring our credit cards made financial sense for my family, and despite what I thought we are better off because of it.

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