Yes, You Can Stop Using Credit Cards!

Yes, You Can Stop Using Credit Cards!

credit card

Written by Kate Tietje, Contributing Writer

In the new year, one of the major resolutions a lot of people make (after losing weight) is getting out of debt.  A lot of families are reeling from their Christmas expenses — I think I’ve read the average family spends over $2000 on Christmas each year! Much of that goes onto credit cards. When you think about taking several months to pay that off at 18% (or more) interest, that’s a lot of extra money that you’re spending just to pay the interest. That doesn’t even take into account any late fees or other fees if you can’t make the payments or something happens.

The best way to avoid all this, of course, is to stop using credit cards entirely. It sounds a bit scary, no? But you can do it!

Our Story

When Ben and I got married 5 1/2 years ago, we had quite a bit of debt. We had his student loans, our mortgage, and around $10,000 in credit card debt. Yikes! I was still in college and Ben was freshly out, and we didn’t make a lot of money. Certainly we couldn’t do anything about this situation, right?

It was hard. I won’t lie.  Every time we sat down to look at our budget in the first year or so that we were married, we literally did not make enough to cover our basic expenses, let alone pay down our debt. I worked part time as a private music teacher while going to school full time and I had to. We scrimped and saved as much as we could (although in retrospect, not as much as we should have).

After a year and a small promotion it got easier. And we got smarter about our money. We ate out less, we cooked from scratch more, we bought used clothes and furniture when we bought at all. We prioritized saving and paying down debt.  Within about a year, our credit card debt was gone. We cut them up and haven’t looked back!

We paid off the last student loan just before we celebrated our 5th anniversary. All that’s left is our mortgage now. The total amount that we paid off was around $160,000.  Not bad,  in 5 years!

You Can Do It, Too

Does that sound crazy to you? It’s not. And no, we don’t make a ton of money now. We don’t struggle, but we definitely have to budget very carefully. If we can do it, anyone can.

The first step is to simply cut up those credit cards! You don’t need them — there are alternatives out there for some uses (like online transactions).

Some of you are saying, “Now, wait a minute…what about my credit score? Won’t it go down?”  Yes. But experts like Dave Ramsey say that it isn’t really a ‘credit score,’ it is a ‘debt score.’  It measures the amount of debt you carry and how you manage it.  If you don’t intend to carry around any debt, then you don’t need that score (which largely tells businesses whether or not they should lend you money — i.e., allow you to go into debt). Sure, there’s the issue of renting homes or apartments, but there are debt-free people who are able to do that with no problem (like Jessica Fisher). Ask her how it’s done; I know it’s possible. Besides, the idea that you “need” a credit card is just a myth (seriously, read those myths!).

Not having a credit card is freeing. There’s no one to pay back at the end of the month; my money is mine. If you’re wondering about emergencies, we immediately saved up $1000 and set it aside just for that, and we don’t touch it unless we have to (which has only happened once). After we paid off the rest of our debt, we saved up a three-month emergency fund (three month’s living expenses), and aim to save up six months soon. There’s nothing catastrophic that could occur (that I can think of) that wouldn’t be covered either by our insurance or our emergency fund.

Benefits to Not Using Credit

  1. Paying Less For Purchases — When you pay in cash, the transaction is finished. You’ve paid what the price tag said. When you use credit, you will pay 18% or more compounding interest, in some cases paying twice as much over time!
  2. Spending Less Money — Studies have shown that when you have to hand over actual cash vs. a credit card, you spend about 20% less. There’s a psychological factor involved here.
  3. No Surprise Fees — If you forget to mail your payment, you’ll pay a late fee (which happened to us by accident sometimes, and could to anyone else, too). There are various other fees involved, or your interest rate could change. Bills can surprise you.
  4. Protection Against Theft — If you carry cash, and you lose it or get robbed, you’ve lost that amount of cash. But if someone steals your credit card, even if you are not liable for their purchases, they could still use it to get additional information about you and you could become the victim of identity theft. That’s not possible if you use cash.
  5. Have More Money — Many millionaires and successful business owners avoid debt (including Warren Buffet, Bill Gates and Steve Jobs) because they know that debt doesn’t make sense. Their no-debt, frugal ways have enabled them to have more money and run successful businesses. Take a lesson from people who are successful: debt’s not the way to get ahead!

Doesn’t that sound pretty awesome?

Yes, You Can Stop Using Credit Cards!

Image by Images_of_Money

How to Stop Using Credit

The most important part is determination. If you start out saying, “I will avoid my credit card…unless I really need it,” you will just keep using it.  You will forget your cash, spend a little more than the amount of cash you have (on things you “absolutely need”) or there will be an emergency. Trust me.

For a long time I knew my microwave wasn’t good (a topic I’ll talk about in a couple months when Keeper of the Home tackles real food basics), but as long as it was in my kitchen, I was tempted to use it. “I forgot to get meat out to thaw for dinner! Well…I’ll just use it this once, just to thaw the meat a little.”  Once I simply put it away and it wasn’t accessible, I found other ways and I didn’t miss it. The same thing applies to using credit: it’s convenient and if it’s available, you’ll use it. If it’s not, you’ll find other ways.

  1. Cut up those credit cards and call the company to cancel.  Do not be wooed to stay by extra rewards or a lower interest rate; debt is debt (no matter the interest rate) and you won’t “save” enough, statistics show, to make those rewards points worth it.
  2. Create a budget.  If you know where your money is going, then you’ll have planned enough to spend on your necessary expenses (and maybe a few indulgences, if your finances allow) and you won’t have to worry about falling short. (Check out our current advertising, Pear Budget, for a simple-to-use budgeting and expense-tracking service)
  3. Save up an emergency fund.  You need at least $1000 set aside, and you don’t touch it unless you have an emergency. Not being able to have your weekly date is not an emergency. The car breaking down is.
  4. Set up a system to pay down the debt you have.  You may have to tighten that budget — if you only allotted for your basic expenses, including minimum payments, you’ll be in debt forever. Try to at least double the minimum, but pay as much as you can comfortably allow each month. Most or all of your “extra” money should go towards debt. This is temporary but critical.

It has been so amazing not to have debt.  We know that the money coming in each month is ours and that we don’t owe anyone (except for what we actually pay for our electric, insurance, and other services). When we look at whether or not we can afford something, we can usually find a way to work it out (if it’s really important) without having to stop paying any other bills. We have wiggle room in our budget so that unexpected expenses don’t scare us and we almost never have to dip into our emergency fund anyway.

You can have that freedom too! All you have to do is take the tiny step of not using credit cards, then work towards paying them off, and continue on your journey of paying down debt!

There’s a new book coming out on this very topic, from Barry Myers (the Mr. behind Stacy Makes Cents). It’s called From Debtor to Better, and details his advice as both a financial counselor and the head of a family who is personally out of debt (they paid off even their mortgage last year). It’s just launched, so if you’re interested in learning more about getting out of debt, you may want to check into this resource.

New Ebook!

Yesterday, I just launched my own new ebook! It’s the latest in the Modern Alternative Mama: In the Kitchen series, and it’s called Wholesome Comfort: Whole Foods to Warm and Nourish Your Family. It’s all about real comfort foods — with no white flour, white sugar, or canned soups that are so common in comfort food recipes!

There are many allergy-friendly recipes, too, and each recipe is designated with little symbols if it’s egg, dairy, grain, or nut-free, so you can see at a glance if the recipe is safe for your family. It contains 42 recipes and sells for $10.95. During launch week, you can get 20% off with WCLAUNCH20 through Friday 1/20.

Do you still use credit cards? Or are you on a debt-free journey and want to share some advice? Tell us your story!

Top image by Images_of_Money

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  1. While I can appreciate the essence of your post (get out of debt, financial freedom, etc), I am a firm believer that credit cards can be used wisely. We have (in nearly 10 years of marriage) never carried a balance on our credit card. We use it for automatic payments of fixed bills, utilities and fuel and use cash for all other purchases (groceries, household items, entertainment, etc). In this manner we can make hundreds of dollars each year in cash-back rewards, and keep our spending in check.

  2. We do have a credit card BUT we pay it off EVERY SINGLE MONTH. For us, it has been smart, because we live overseas and there aren’t any foreign transaction fees on our card, whereas if we take money out of a bank machine, there are. We are also building up rewards miles, and now have enough for at least one ticket home “in case of emergency”. I am not all about credit cards and I absolutely think that if someone has a problem with incurring debt if they have one, that they should cancel it. BUT I also think that credit cards can be used responsibly.

    1. Credit cards should never be considered “responsible.” The Bible specifically warns against debt….if debt and loans were acceptable, God would not have said “Owe nothing to anyone except to love one another; for he who loves [a]his neighbor has fulfilled the law. ” 🙂

      1. I just really have a hard time with some of the biblical arguments that Dave Ramsey and others give. I know this is harsh, but we do NOT, not matter how “good of a Christian” we are, follow to the letter every single verse in the Bible. And, the Bible was written in a completely different cultural context, time period, etc. But, I get the biblical argument for not having debt, I do.

        However, in our world today, if you want to be a professional, particularly a medical professional or lawyer, etc. you have to get a master’s or a doctorate degree. My husband is a physical therapist. His schooling cost $150,000. If we would have waited until we could ‘afford it’ without any debt it would never have happened for us. That’s the truth. Period.

        So while I would love to be debt free, I am not. And I think God is okay with it because it means that my family has food on the table and my husband is fulfilling his calling in this world to help people become well.

        And yes, we have a credit card. We live in Alaska and get cheap tickets to visit our families that we would not have without it. People can disagree, but the truth truly is that we would not have seen family every year without those credit cards. Even if you spend no money on the card, just having it means you get a $100 companion ticket each year. Normally tickets cost $600. That’s $500 savings for doing nothing but having the card in my wallet. I don’t even have to use the thing, except when I book my ticket so that the fare goes through.

        I understand the arguments for being debt free. I would love to be debt free and we are working towards it. I know people feel strongly about this. Clearly I do, as well, but not every Christian interprets the Bible in the same way. Not every person can live life exactly the same as every other person. Life just isn’t that simple.

      2. @Stacy, I’m confused by how you can say that ALL credit card use is irresponsible? As in Tamara’s case, they live overseas and would be charged fees to get cash. By using credit cards, they avoid those fees. How can it be responsible to pay more when you can honestly pay less – simply by using the credit card. And it gets paid off. So why is that a problem? THAT IS NOT DEBT! I use my credit cards as well, for the benefits and cash back. Instead of using a debit card or cash – with no benefits at all, I use the credit card, bring the receipt home, and immediately pay the credit card from my checking account. I get the extras for using it and still paid it immediately. That isn’t incurring any debt either, unless you count the 30 minutes between leaving the store and getting home to pay the card off….

  3. Thank you so much for this post! It is so timely. My husband graduated from law school last year, and during those 3 years our family grew to a family of 5. So the amount of debt we now owe is staggering (Take your number and double it) Sometimes when I look at it I feel so discouraged. It’s just such a big number! I know that going to school was the right choice, his earning potential also doubled. Still, it’s such a mental and financial burden. We live very frugally and are throwing all our money at the debt, but sometimes I just need a little encouragement. Before he started school we had paid off all our credit cards, and we still avoid them as vehicles for debt. However in the past 2 years we have begun to use them again in 2 ways. 1) We use a card with a cash back option for ALL of our purchases. I keep track of what I spend in our budget just like I would with a debit card or cash. While it does take some mental strictness, at the end of every month we pay it off. This gives us about 90.00 a month in cash back that we can put directly into our savings account (to build up that emergency fund) 2) We transferred some of the high interest school loan debt to a credit card with a 0% interest rate for a year. When the interest goes up it will be the same as the interest we were already paying, but in the year we will save thousands of $.

    So we have figured our ways to make the credit card work for us, but I think you do have to have the right mindset- the card isn’t one that can just be used, it has to have limits on it (the limit of what you make so you can pay it off . If you’re not that type of person, cash is MUCH better.

  4. Really good post, and I agree that carrying debt is a huge burden, and we should do everything we can to get out of it and be good stewards of our money. But I also wanted to share my experience with credit cards, and why we still use ours.
    1. We pay our credit card bill in full every month, using it more like a charge card than a credit card. When you do this, you never owe interest because the company only charges interest when you carry a balance. We set up automatic payments so we never get late fees or forget. Everything we buy on the card is in our budget, and we have the money to pay for it at the time of the purchase. In seven years, we have charged tens of thousands of dollars to the card and have never paid a penny in interest or fees.
    2. We haven’t bought a house yet, so improving our credit scores does matter. Using credit and paying the bill every month gives us a good credit history, and that can help get us a better interest rate so we pay less interest when we get a mortgage.
    3. We earn about $150 per year in cash back credit card rewards. So the company pays us to use the card, and like I said, we have never paid a penny in interest.
    I know this approach isn’t for everyone, and it takes a lot of self-control, but I just wanted to offer another perspective!

    1. Hi Kristen…..the debt-hater in me has to answer your comment. 🙂 I know you say you plan to pay off your bill each month, but my husband is a financial counselor and he sees this problem on a regular basis….someone was planning to pay it off, but they got sick or they lost their job. Now they’re in WAY over their head and drowning…it’s a very sad place to be. And very dangerous. It is VERY possible to purchase a house without a stellar credit score….that’s a lie of the devil and a myth that society has led people to believe. You can get a manual underwriter, and they consider your income and other things when giving you a loan for a home.
      You say you have self-control that most people don’t have, but I have to caution you – all the self control in the world won’t keep a crisis or a tragedy from coming to knock at your door. Is $150 worth the pain and heartache that might come? Debt always equals risk….even if it’s only part of the month that you are using “their money.”

      1. Stacy, everytime someone comments that they pay off their card every month you come back with saying, “Sure, but what if something bad happens and you aren’t able to pay it off?” Your argument is illogical. I agree with you that debt is sinful but so is pride. Just because there is a family tragedy or job loss, doesn’t mean that the family in question would necessarily not pay their credit card bill that month. If you take your readers at their word then they will have the money to pay that bill. You do realize it is possible to have both an emergency fund and a credit card, right?

        Forgive me a sinner, but I find the arrogance in your comment replies very off putting, even with your strategically placed emoticons.

        1. I definitely agree with you Elizabeth. Though the article is well written and has good points, there is a tone of arrogance in the replies to people who comment on using credit card responsibly.

        2. We also use our credit cards for most purchases, and pay our bill off every month. I find this argument against this curious. True, my husband could lose his job but we would still be able to pay those bills, using money we have in our checking and savings accounts. People who are paying their bill in full every month are not charging thousands of dollars they won’t be able to pay back if a paycheck doesn’t arrive.

          It’s fine to follow the financial plan that works best, but not every plan works for everyone. I do know people who find the cash-in-envelopes plan works best for them. There are other ways to spend responsibly!

        3. I agree with Elizabeth above. We use a credit card for all our monthly purchases and pay it off each month. We use a budget to track everything we spend and save quite a bit each month. I also keep 2 months worth of expenses in my checking account and have at least a 6 months emergency fund in savings. As well as savings accounts for fun stuff like traveling. I have never carried a balance and even if one or both of us lost our jobs would be able to pay of our credit cards. We use it like a debt card and only spend what we have in our checking account and what we have budgeted. You can use programs like Mint to see exactly how much you’ve spent towards your budget at anytime. I don’t think credit cards are the devil and I also find your comments to replies arrogant.

          2nd I would like to hear from someone who bought a house without a credit score. I tried and the banks practically laughed in my face. That is why I now have a credit card and have developed an excellent credit score even though I’ve never been in debt.

  5. I think credit cards get a bad rap when it’s really the consumer that creates the problem. Credit cards give me added protection when purchasing large items, enables easy online transactions and keeps all of my spending documented in one place. The challenge is to make sure you don’t spend more than you can afford to pay in the next pay cycle. Once you start carrying a balance, it’s a slippery slope. Don’t start and learn from the beginning that you always need to pay off your balance each month.

    1. Emily, while your argument seems right, it is VERY dangerous. Debt ALWAYS equals risk….even if you only have debt for part of the month. What happens if you lose your job? Now you also have to figure out how to pay your normal bills AND a credit card bill….and they are not so friendly when you don’t pay them. “…borrower is servant to the lender,” Proverbs 22:7 Being a slave isn’t so fun.

  6. We have not been able to pay down our debt very much this last year but not using the credit cards (ever) has been the biggest thing for us. Not incurring anymore debt is a huge start for us.

  7. We stopped using credit cards for every day spending also. We do have 1 for purchasing online, but immediately pay it at the credit card site so we never receive a bill. We used to have a credit card we paid off each month like the above commenters. When we went to cash only, we found we were spending about 30% and had lots of extra money each month. Most of that goes into a savings account, so we are saving more than ever. That savings, outweighs any rewards that we could possibly receive from the credit card. Plus this math really hit us hard: to receive $10 in rewards (at the typical 1%) you need to spend $1000! Why not just cut my spending a bit and save that $10 myself. Even airline miles aren’t worth it. Set up a fund to save for those tickets.

    So we won’t be going back to credit anytime soon. Spending cash and saving for what we need is the way to go for us.

  8. I would like to point out that in many industries if you are applying for a job, the first thing they do is pull your credit report. Also, if you have to apply for a mortgage to buy your home, they will pull your credit report also. No credit = not a good risk for the bank. In my family, we do 90% of our purchases in cash, but still strategically use the credit card for things like gas for the cars and if we rent hotel rooms, etc. We track these purchases then pay the bill upon receipt. I doubt Mr. Ramsey will be applying for a job or a mortgage anytime soon– I don’t know how realistic this advice is for the rest of us.

    1. It’s certainly true now that Dave Ramsey has enough money that he doesn’t need to take out mortgages. But it wasn’t always that way. He was rich and completely lost his fortune because he had so much debt along with his money (real estate). He built his wealth from the ground up, using these principles. He is not the only one, either. The book I reference at the end, From Debtor to better, Barry Myers (author) also lives by these principles and is far from rich.

      There are ways to apply for a mortgage and get a good rate without a credit score. I can’t remember what they are at the moment, but perhaps someone with more knowledge than I about mortgages can answer this.

      I’d just like to say that all the stuff we have been taught about “the way money works” is NOT necessarily true! There are lots of ways around things, so that you can make it work for you without having any debt. 🙂

      1. Oh, my husband (who loves finances) has this to say about mortgages: “for a mortgage without a credit score, it is called “manual underwriting.” It means they look at your employment records, bank balances, etc. to determine if you earn enough, and pay your bills well. 25 years ago, 100% of mortgages were issued that way.”

        That’s how you do a mortgage, and get a good rate, without a credit score. 🙂 Totally possible!

        1. Manual underwriting is really the best way to go. 🙂 Actually, the best way to go is to not get a loan at all. 😉
          Great post Kate…I enjoyed it all and your points are spot on. You’re very knowledgeable.

  9. This is interesting and something that we’ve considered. We did do it for a short time, but we ran into some problems (maybe its just since we are in Canada) with not having a credit card at all, there was a time we actually needed one so we had to reapply, even though we read and re-read what Dave Ramsey said about not needing it, in this case, we did (sorry I really can’t recall what the situation was right now, it was either renting something or buying something online that didn’t work with the alternatives). But we don’t have any debt on them, so that is better than nothing right now. It definately is easier to just “spend” money with them though since its not as “visual”.

    We are doing other things that Dave Ramsey recommends, but we’ve had a lot of set backs, unfortunately. We did save up that $1,000 emergency fund but no sooner than we did that, we had emergency costs (flood that wasn’t entirely covered, car wasn’t worth fixing anymore, and we had to get a bigger vehicle anyways for our 3rd child). So we spent that plus some, and then we had another emergency this year that is actually not covered by insurance- water damage in our bathroom. So we had to get a loan from the bank for that- mold and rot aren’t an option really. So we’re back at basically where we started plus some, which is frustrating. But we’ll keep working on it.

    1. Nola, I would agree that as a Canadian, there are a few things that are particularly difficult without a credit card. There are a lot of easier ways to get around not having one in the US. Personally, my husband and I actually do have one credit card, which we do earn points with (for free groceries, mostly), and we use it primarily for business expenses and when we are travelling in the US (because the exchange rate is often better than exchanging cash and most US businesses will not accept our Canadian debit cards). We pay it off monthly, without exception, and try to use it very minimally. I do love the idea of not having a credit card at all, but I would also agree with many of the commenters about the need for self-control first and foremost.

      HOWEVER, my husband and I have still seen the odd time when we used our credit card for a few purchases that couldn’t be made in any other way, or on a trip when we were a bit stressed out and not tracking expenses as carefully as we should. We found that we had spent more than we intended, even though we are usually very on top of what we spend. I do think that a credit card lends itself to sometimes being a bit more careless or getting yourself in trouble, which is why I agree that even for those with very careful money management, it’s not really a good idea.

  10. I love your microwave analogy! Right on Kate! Cut up those credit cards and never look back:) And thank you for sharing the release of your new ebook! So exciting:)

  11. In about our 3rd year of marriage we had about 5 credit cards and they were all pretty much maxed. It was emotionally draining trying to keep up with the payments, but we finally got them paid off.
    Ten years later we do still have one credit card. We have paid it off every month for the past few years. We mostly use it for medical expenses that get reimbursed. That seems to work for us.

  12. We use a credit card and just pay it off every month. The debts we owe and make goals to pin down are student loans and the mortgage. I think a credit card can be a good thing if you have the discipline to only spend what you have budgeted. It also comes with more perks. For one thing, it is protected and not linked to a bank account, whereas a debit card is not as safe. If someone hijacks an online purchase (or as happened to my friend, a gas pump purchase) and steals thousands of dollars from my account, I am in trouble, but if they hijack my credit card (which has happened) the company deals with the security breech at no cost to me and I have no worries about bounced checks or fees. By using a credit card every month and paying off the total balance I have also greatly helped my credit score and credit limit. This really helped us get an amazing interest rate on our house and helps our peace of mind in emergencies. It will also help with the upcoming midwife/homebirth expense that our insurance reimburses. The money never really leaves our account because it will be refunded before the statement balance is due.

    If self-control is a problem then a credit card can be dangerous, but most people I know with credit card debt were not compulsive shoppers. They used the card as a loan in an emergency (for example one friend was forced to back pay a year of his roommate’s rent after his complaint was rejected, another couldn’t get approved for a student loan in time to pay her tuition). Sometimes debt can be a helpful strategy.

    Another perk: Credit cards do not charge interest on a balance if the statement balance is paid in full by the due date and you don’t use credit cards to get cash. It takes about a month and half for a statement balance to become due. In the meantime that money is still in your account EARNING interest.

    1. Hi Frances,

      I see a few myths about credit cards in your post. I hope you don’t mind me addressing them. 🙂 I just want to make sure anyone reading and considering a plan to get out of debt has all the information!

      Credit score/limit — Is not necessary if you will not be using debt. Mortgages and other loans if absolutely needed can be manually underwritten, which requires no credit score.

      Protection — We have this on our debit card. It is an option that you can choose so that you are not liable if the card is stolen.

      Emergencies — This is a key reason why you have an emergency fund saved up. We would be able to pay cash for any of the situations that you mention. It’s a huge part of the get-out-of-debt plan for a reason!

      Interest — Most banks pay about 0.1% interest these days, not nearly enough to make it worth it, especially in the small amount of time (one month) it takes for statements to show up.

      Thanks for your comment!

      1. I actually have a bank that pays 2.9% on my checking account (yeah local banks!) and so while I pay with my credit card (and pay it off at the end of the month) and get 80.00 in cash back (1-5% depending on what you are buying, and we pay our bills with it) we also get $3-5 in interest from our bank. Every little bit helps! if you CAN game the system do it-they will game you any time they can.

    2. “Sometimes debt can be a helpful strategy.” This is a lie that society has led people to believe. If debt were helpful, would God himself have said “Owe nothing to anyone except to love one another; for he who loves [a]his neighbor has fulfilled the law.” Romans 8:9
      Relying on your credit card each month, even if you think you have the money to pay it off is like playing with a snake. You might think it’s okay….but it can still strike. It’s a wild animal.
      Something to think about. 🙂

      1. Cash is always better. 🙂
        “Owe nothing to anyone except to love one another; for he who loves [a]his neighbor has fulfilled the law. ” Romans 13:8

  13. Thanks for a great post. We used to carry a credit card and pay it off every month. However, it was always easier to spend more than we should and we eventually stopped paying it off in full. Then the balance got bigger and bigger. It is easier not to play with the snake that keep it from biting you in the end. It is possible to live with out a credit card. We use a debit card for any online ordering we need to do. It is a great feeling not to pay more than the asking price for things. 😀

  14. We have been debt-free for a while now. We paid cash for the last two vehicles that we bought. (Such a good feeling! Worth buying an older model used car when you can pay for it outright!)

    My husband is self-employed, and I can’t imagine how we would do it if we had a large amount of debt. True, we may have a much simpler lifestyle than many people our age do, but we don’t have the burden of the monthly payments either.

    We haven’t had much success building up a lot of savings due to things like $1500 car repairs and midwifery bills! But at least we’ve been able to pay them, even if it wiped out anything we may have saved.

    Some things do have to be put on hold, like ordering parts to repair the washing machine. But taking my laundry to Dad’s house for a few weeks has been doable. And it felt awfully good to know that there was money in the bank to pay for the parts once we did order them! 🙂

    Not having credit cards has made us learn to be a bit more creative and patient at times, but it has also taught me that most things (like a broken washer!) are not true emergencies. Inconvenience? For sure! But if I had a credit card it would be too easy to convince myself that it was an emergency.

    By American standards, we are certainly not well-off, but compared to 80% of the world, we are positively rich! Remembering this helps me to keep things in perspective and be thankful for all of the blessings that I DO have. 🙂

  15. I agree with the strategy and the reasonings, but have major concerns. If I’m reaidng correctly the author and her husband paid down $160k in debt in less than 5 years. That’s an average of $32k per year. I don’t make enough to pay down $32k per year. Period. I have stopped adding more debt to my card and I have a strategy to pay them off in 3 years and that includes my little student loan. At that time I will have only a small car loan payment left.
    I just don’t think it’s realistic to use an example of someone having almost $2700/month just to go towards debt when that’s more than many people bring home. And while that didn’t stop me from reading the article, it can be off-putting. And while I don’t think the author is bragging, seeing those #s can make people stop reading and never realize the full benefit of the encouragement and highs and lows of the author’s experiences.

    I don’t mean to be rude, but just want to explain that the way this was approached can turn off many people.

    1. Monique, we are not rich. In fact, when we began this journey, we were making less than the national household average. A year later we began making slightly more than average. We were not making crazy amounts of money in order to pay off this much debt. No, we sold things we did not need, we did extra projects on the side, we got our expenses down to bare minimums and did without in a lot of cases, in order to make this work. It’s absolutely possible, even on an average income.

      1. I really appreciate this response, Kate. As a person with lots of school debt issues, it is nice to hear that it does take the ‘above and beyond’ to get rid of the debt. Sometimes people make it sound like they can do it on just their normal income…and it just seems like that isn’t possible!

  16. Well everything you said makes sense. It does sound a bit scary. But perhaps once the tax return comes in I will pay off the credit cards, cut them up and use the monthly payments I was making on them to put into savings. Now lets see if I can find the discipline to do it!!!! God help me!!!!

  17. Ugh! How can anyone say that they are debt-free if they still have a mortgage? A mortgage is the most DANGEROUS debt, in my opinion.

    Our goal is to get out of our mortgage by buying a few rural acres and building our home debt-free with our own hands and muscles (likely cordwood, strawbale or earthbag). I would love to hear about anyone who has had this same dream of building a debt-free home and has achieved it. I need some inspiration and some encouragement and any advice. Email me at

    1. Elissa, we have a plan to get rid of our mortgage quickly (less than 5 years) and plan to, in the future, buy and remodel a debt-free home.

      1. Awesome, Kate. My comment wasn’t specifically directed at you. I just have noticed in our culture that people who say that they are debt-free usually do have a mortgage — which is debt. I just wonder why mortgages are so acceptable even among those who “hate debt”. Again, I’m not throwing stones but I hope that more and more people realize what a terrible thing mortgages are and try in whatever way they can to buy a home or build a home debt-free. Think of how much money a mortgage payment eats up of most families’ budgets. It’s like a third of ours. It’s horrible and stressful — and, yes, we got ourselves into it. Part of our homeschooling curriculum for our boys will be learning how to build homes and home systems. They will help us build our home (hopefully within the next 4 years) and I want them to have the freedom to NEVER have to be burdened with a mortgage b/c they will know how to build their own home. This post about a 16 yr-old who build his own tiny home was super inspirational for me:

  18. Kate,

    Thank you for this great post! You’re proof that debt-free living makes sense. I like reading these comments that people find it a little strange to carry no debt and avoid credit cards. If that defines “strangeness,” strangeness is fine by me! Thanks for the mention of my book, too. If you don’t think you can beat debt, I promise you can!

  19. Credit can be like alcoholic drinks. Many people can use it just fine, but there are some that cannot, and like an alcoholic, they must completely avoid it.

    Kudos to those of you who’ve chosen to cut up your credit cards and be debt-free (including mortgage or not). You are living within your means.

    However we still use a credit card and pay it off every month. I appreciate the convenience as well as the reward points. We’ve never carried a balance and never been late for a payment.

  20. We use credit cards, but as a means to receive cash-back bonuses. Our payment is automatically linked to our debit account and ALWAYS is paid off every month. So, we actually make money by using a credit card. One day we will need to get a loan for a home. We live in southern California and there’s no way we’ll be able to outright afford a home without one in the next 10 years, minimum on just my husband’s salary. We DO NOT put charitable contributions on our credit cards though, because that just means giving less money to the charity of our choice and that the credit card co. makes money off of our giving, and we don’t like that.

    1. I agree! We enjoy getting all our bonuses from our card – cash, gift cards. It recently allowed us to get a new tv (much needed) and in the past it paid for our washer and dryer completely. We pay it off several times a month to keep on top of it and watch our spending closely. It is also much more convenient than carrying around cash.

  21. Whoo aparently reading about one person’s great, responsible outlook regarding money fires people up…

    GREAT post, very sound advice!

  22. Kate, thank you for sharing this. You make some interesting points, and I always enjoy reading blog entries that make me stop and think. 🙂 If you don’t mind, may I ask you about where you (or someone in general) might keep an emergency fund so that it’s always immediately accessible? The reason I ask is because an emergency is the only situation where I could see a credit card being potentially necessary.

    For instance, if you keep the fund in your home security may be a problem. If you keep the money in the bank and have an emergency at, say, 2:00pm on a Saturday (after business hours) you wouldn’t have access to the money until Monday. If you keep a debit card in order to withdraw the money at any time I don’t see how that’s any different than carrying around a credit card you pay in full every month.

    I would love to hear your opinion on this, and thank you again for sharing your thoughts!

  23. i really appreciated this article. i think it interesting all the nay sayers who have all the reasons why it either wouldn’t work for them or why credit cards are somehow wise.

    we are a family of 6, soon to be 7 in april, who live completely on missionary support in full time ministry in the most expensive state of the union, california. i had always considered myself careful with money, and yet like so many people we got into debt on credit cards and other stuff because of some tough times we were in several years ago (got in debt charging food and gas – not extravagant at all).

    one reason we decided to do away with the cards is we realized that we weren’t really trusting the Lord when we came to rough places with finances… we always had the “american way” to fall back on. now we have had much tougher financial times than ever before and yet we see the Lord provide miraculously again and again and again. i know it is hard to think that there is a way to survive in an emergency without a credit card and the option of going into debt, but really we only think that way because we don’t really believe the Lord is telling the truth when He told us that He is our Provider and that He cares for us more than for the birds.

    i just want to encourage anyone who thinks it not possible to get out of debt when they don’t make enough for their bills that it is possible. if you take the dive and ask the Lord for help, He will give you creative ideas of how to pay it off. i also believe we are to let our yes be yes and our no be no and that He will greatly reward us for not defaulting on our debt but actually following through and paying for it. you can do it!

  24. My husband and I are actively working to get out of all our debt also. Our goal is to be completely debt-free, including the mortgage in the next few years. God lead us to an awesome resource that, for us, has been FAR MORE helpful than Dave Ramsey or ANY of the other books, classes and courses combined. Her name is Dani Johnson and the home study course is called “War on Debt.” Here is the website address: Dani has the experience and the results to prove she KNOWS what she is talking about, having been both homeless and a multi-millionaire. She teaches people how to pay off their debt WITHOUT making any more money than they do right now, the difference between wise and foolish spending, how to uncover excess spending and use that money to quickly pay down your high interest accounts, Although currently a multi-millionaire, she feeds her family (husband and 4 kids – 3 of which are teenagers) on less than $100 per week! They live in a normal modest home and they homeschool!!! Check out the website; she has the results to back it all up! I really don’t mean to sound like a commercial, it’s just that Dani has made such an incredible impact on our lives personally (and thousands of others) that I wanted to pass it on so others can Declare WAR ON DEBT!!!!!

  25. Kate, thank you so much for sharing this. You make some interesting points, and I always enjoy reading blogs that make me stop and think. 🙂 I do have one question for you, though. If you don’t mind my asking, where do you keep your emergency fund? I only ask because an emergency is a situation where I can see a credit card having a strong advantage over cash.

    For instance, if you keep the emergency fund in your home, security may be an issue. If you keep it in a bank account and then have an emergency at, say, 2:00 pm on a Saturday (after business hours), you wouldn’t have access to the money until Monday. If you keep a debit card so the fund is accessible at all times, I don’t see how that’s any different than carrying around a credit card you pay in full every month.

    I’m genuinely curious about this, so I would love to hear your opinion. Thanks again for sharing!

  26. My husband and I used to be in debt and used a variety of methods to get out of it. Now we are debt free and loving it — but we still use our credit card for monthly purchases. Everything goes on the card and we pay it off every month, thus avoiding fees, etc. We NEVER (I repeat: NEVER) carry a balance. We also live within a very stringent budget and have never had a problem.

    We do make a point to use a credit card that gives us something back. For instance, last Christmas we used credit card points to purchase every single Christmas gift on our list. Since shipping is included in those purchases, we spent $0 on Christmas. $0! (Not that we have a huge list because we took a sword to it a few years ago! But that’s for another time.)

    I would feel negligent it I didn’t mention that this takes self-control and accountability, and we must be very deliberate in our purchases. If one isn’t able (or willing) to exercise restraint, then they shouldn’t use a credit card.

  27. I am a little late in responding, but I just want to add something we’ve done recently that is working for us . . . I don’t really have a credit card, as such. My husband has a debit card linked to our checking account, but I switched over to an atm-only card, as I found I was using the overdraft protection a bit too frequently (ahem).

    But it made me nervous to think we had no “emergency” card (we are in the process of building our emergency fund, but like one of the posters mentioned, every time we get to that 1000.00 figure, the car dies. the fridge needs a repair. etc). So I took my only remaining card and gave it to a dear friend for “safekeeping.” This way, I know it is available if we really, truly need it – but I would have to ask my friend for it, and that would require me to pause and evaluate the purchase. I found I was using my cards for mostly reasonable purchases (food, gas). But now if we are out of cash, I really have to shop my own pantry, or walk instead of drive for a couple of days – I can’t just zip by the grocery store and justify my use of credit with “I’m just buying healthy food for my family.” It’s a good thing.

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