Dear Hivers
To my own surprise, I cut up my credit card one evening last month. I got tired of accumulating credit card debt. I grew tired of being an impulsive buyer. And I wanted to be free from debt, totally! This works for me. I don’t know about you. Here’s my question for you, then.
Should you stop using credit cards?
Advantages of cutting your credit cards
You drive away temptation to spend.
According to studies, people spend less when they purchase by cash. Why is that?
Because parting with cash HURTS more, compared with using the magic plastic card! Not convinced? I’ve looked up two studies whose findings confirm this:
should you stop using credit cards?
Study after study shows the correlation between credit cards and impulsive buying behavior. As for me, I didn’t need to read these two journal articles to be convinced that I needed to get rid of my credit cards! I only had to feel the pain of my bad cash flow management and really bad credit card spending habits!
Cut all connection from something that represents debt.
This is so true for me! Cutting up credit card is a mental exercise that empowers my resolve to get rid of all my debts! The credit card is one of the classic example of a human slave that ended up becoming the master, and humans becoming enslaved! It’s like Sauron’s one ring of power in the Lord of the Rings, that eventually enslaved those that capture it. The problem is, it’s way too easy to get a credit cards. And banks all too willingly oblige people when they apply for one!
Disadvantages of getting rid of your credit cards
In the spirit of fairness, we also need to explore the disadvantages of cutting up your credit cards.
Lack of an online payment facility.
Credit cards can be great tools, especially if you purchase a lot of things online. With just one click, you can easily make a purchase, then it will be delivered at your doorsteps. The name of the game is convenience! Besides, we are moving towards digital goods like eBooks. I’m now a fan of Kindle. It’s very easy to use and a book can be delivered to me in a matter of seconds! How cool is that?
But then again, in those moments when the frenzy hit me, I ended up buying lots of books and not reading all of them! Ugh. My bad!
Lack of an “emergency” fund.
Credit cards are great for real emergencies. Like when you’re at a hospital because of an accident and you don’t have cash with you. Or there’s a real emergency at home, like tuition fee maybe that parents couldn’t afford for one of their children.
But then, again, if I had an emergency fund, this won’t be a problem at all!
What the heck, I’m cutting up my credit card and just leaving one – with a $350 credit limit. It’s better to maintain, I can pay it all in one go. And I can avoid racking up multiple debts.
What would work for you? Do you need to cut up your credit cards, too?
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