How to not use your credit card

[Persevere]

From time to time I've read tips on how to not use your credit card. My favorite is to freeze your credit card in a bowl of water. If you decide you want to make the purchase, you have to go through the trouble of going home, melting the ice to retrieve your credit card, then returning to the store to make the purchase. By the time all of this is done, you've had time to reconsider the purchase. Does anyone else have tips to share?

[mylegs]

Hide them. In your wallet, in your closet, just somewhere that you don't have them out to spend. And then don't spend. Or cancel them. Or cut them up.

[4jacks]

Hide them. In your wallet

Lol, yeah that never seemed to work for me, and my wife hid her in her purse.


I like the Ice idea, that is pretty ingenius, but that still looks at the CC's as if they were your emergency fund.

If you actually save up an emergency fund, you don't need them in the freezer.

[KrozFan]

I hear the ice thing all the time, the only problem for me is I'm really a numbers type of guy and have memorized my debit card number, exp. date, and security number on the back so if I wanted something online I could just get it, ice or no ice. The problem I've heard with hiding your card is then you forget where it is. The best way is to work on resisting the temptation and sticking to a budget and think long term. Work on thinking "is buying this really worth sacraficing x"

[matt]

Work on thinking "is buying this really worth sacraficing x"

This is a great habit to get into because it not only works on reducing your CC spending, but your spending overall. The less you spend the more you can save, CC or not.

[Steve Orris]

I've heard that canceling your credit cards can hurt your credit score so I wouldn't do that. Hear is an idea with some accountability included. Husbands carry their wife's credit cards in his wallet. Wives carry their husbands cards in her purse. You want to spend money? You both have to agree.

[KrozFan]

I've heard that canceling your credit cards can hurt your credit score so I wouldn't do that.

Canceling cards hurts your credit score in two ways. Part of your credit score is based on credit history, so if you're closing an account you're cutting short your history. It also hurts because you are getting rid of some of your available credit, so you raise the ratio of outstanding debt to available credit, assuming you're carrying balances.

[iamwarner]

Who cares if you hurt your credit, if you aren't going to use credit ever again?

Find a good, local bank/credit union who will apply manual underwriting and your FICO no longer matters.

Best way not to use your CC...... don't have a CC!

[rubyq]

I agree - if you are not planning to use CC, you can cancel them. It hurts your FICO but I think, the impact should be temporary.

[toylady85]

I like the idea of hiding them. Perhaps in an envelope on the top shelf of your closet under a bunch of stuff that is difficult to reach.

[matt]

Who cares if you hurt your credit, if you aren't going to use credit ever again?

Your credit score also effects things like your insurance rate. I recently got a notification from my homeowners insurance (esurance via homesite) that my rate was changing because of a change in my insurance score that they get from Trans Union. It said it could be because of one or more of the following:

You have opened two or more new credit cards in the past 12 months

Your oldest credit line is younger than 215 months

and one other thing that I can't remember now, I'll check it when I get home.

I'm pretty sure ours is the first option, as we've made two rather large purchases recently and gotten 0% financing for a period of time via putting them on CC's which we plan to pay off in full before the promo period runs out.

If you're thinking of canceling your card(s) keep in mind that it still can have an effect on other things you're probably not going to cancel, like your insurance.

[guy@howto]

To properly answer this question. We mush research a generation that had no problem with credit cards. Of course they didn't have them 50+ years ago, however, the system they used can work today.

It's called.... wait for it.....

*CASH*

Get a good budget tool and work out what you will allow yourself to spend. When you get paid, take that amount out in cash and put it in an envelope, jar, wallet, whatever. When it's gone, it's gone. You don't even allow yourself the choice of the card. Also, psycologically, we tend to want to spend the cash less, because you actually see money leaving your pocket whereas with credit cards you don't.

Keep one credit card with you, however you must ask yourself 3 important questions before using it (remember, this only comes into play if you've spent all the cash, or cash is not accepted. ie, internet)

1) Is this an emergency. Will the sky start falling if this purchase waits until payday?
2) Am I willing to reduce next pay period's budget if I make this purchase? (Do I have the discipline to take the cash from next pay, reducing available funds by leaving them deposited and make a payment towards this purchase?)
3) If I'm using a card for the benefit of points or convenience (internet or large purchase), do I have the funds available in cash to pay it off before I will incure interest charges?

Happy spending,

Guy


P.S. Number three is important. 50+ years ago, people only made big purchases after they'd saved for it. Usually no matter how long it took.

[matt]

I brought the letter into work today, here what it says:

There are many factors which are used in producing the consumer credit report. According to Trans Union, the following criteria had the largest impact determining your insurance score:

The consumer has made 2 bank credit card applications in the previous 12 months. Optimum value is 0 in the previous 24 months; score will improve as number of applications decreases.

Oldest bankcard account was opened between 97 and 215 months ago. Optimum value is 216 months or more.

Most recent credit application was 5 months ago. Optimum value is 25 months or more; score will improve as months since last application increases.

Homesite uses your insurance score as one factor to determine your overall premium level. One or more of the reasons shown above has led to a premium other than the lowest premium level. ...

216 months is 18 years! When we have children I'll open a card in their name on their birthday!

Anyway don't cancel your cards as it does hurt your credit score and your insurance score (whatever that is). Also apparently, don't open any new cards either, but you knew that already anyway didn't you?

If you have your card number memorized then call the credit card company and tell them you lost your card and would like them to issue you a new one with a new number, then cut it up when you get it and don't even look at the number

[tony34]

My auto insurance were also higher b/c I had opened too many cards - so, there's a cost to closing open credit lines.

[katsinis]

I used a pair of SCISSORS to avoid using my credit cards ever again.