Declare your freedom by canceling credit cards
10 Reasons for Canceling Credit Cards
by April Borbon
Should You Break Up with Your Credit Card?
Living Without Plastic
I just paid off and canceled my last credit card. I have been slowly chipping away at my credit card debt and canceling credit cards as each card was paid off. The final cancellation came today when I paid off a small balance on the card and then called customer service to cancel the card. This was met with surprise and choruses of "don't you need the card for emergencies?" by the two people I talked to at the credit card company. No, I don't need it for emergencies and here's why:
- Canceled Cards not needed for Emergencies. I have a small emergency fund of $1000 put aside. I used to use my credit cards for emergencies, but the funny thing is that my cards would reside at or near the maximum credit level, so technically I would only have $100 worth of credit to use for an emergency. That doesn't even make sense. Having cash on hand makes sense.
- No Mercy from credit card companies. I never, ever want to be at the mercy of credit card companies that will ding me $35 for being literally an hour late making an online payment. Ditto for being at their mercy for interest rates, annual fees, a heinous universal default clause, etc.
- Canceled cards not needed for travel. I actually don't need a credit card for travel, online purchases, credit card protection coverage, renting a car, etc. any more. Bank debit cards with the Visa or MasterCard logo work the same as a credit card (I do need to have cash in the account to cover the hold and the charges, but with the ATM card linked to my emergency fund account, it works just fine.)
- Only the weird cancel cards. I will officially be "weird." Most average people have a handful of credit cards and a mountain of credit card debt. Weird people (like me) have no credit cards and no credit card debt. I'm happy to be weird.
- Canceled cards means no debt. I won't run up debt. Without credit cards, if I don't have the cash to pay for what I want, I will either need to buy something that I can afford, save money until I have the cash to buy the item I want, or not buy anything. No matter what happens, I won't end up in debt.
- No tracking for canceled cards I don't have a number of credit cards to keep track of. If my wallet were to be stolen, I won't have a dozen credit card companies to deal with.
- Canceled cards cause no temptation. I won't be tempted to blow my hard-earned money on things that I don't need. Using credit makes it way too easy to spend money because it doesn't really feel like you are parting with your hard-earned cash. I can't count the number of times I swiped my card to purchase expensive gifts, unnecessary clothing or shoes, or jewelry that I couldn't afford because I could afford the "low monthly payments."
- Canceled cards can't 'rescue'. I won't be able to "rescue" people. The Florence Nightingale syndrome can have a seriously negative affect on your bottom line. Better to provide moral support instead of financial support, which often leads to making loans that aren't paid back, ruining personal relationships over money, and feeling guilted into spending simply because I had a credit card to put the debt on.
- Canceled cards weigh less. My wallet is lighter. Being a minimalist, it is a nice feeling not to be lugging around a wallet full of credit cards.
- Not worried about credit scores. I don't foresee the need for a great "credit score." I own my home, and if I do decide to purchase another home, there is the option of manual underwriting or, better yet, paying cash for a home. I am self-employed, but if I do look for a regular job, I would want to work for a company that bases their hiring decisions on me, the person, instead of me, the credit score.
In our society, not having a single credit card is nearly blasphemous, but I am willing to take that risk in order to live debt free and not fall victim to the siren song of the credit card industry.
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