Why I Don’t Use Credit Cards

A few weeks back, a fellow personal finance blogger wrote that he earned an “easy” $1,000 last year from his credit card rewards. I posted in his comments section that I thought this was great! But I also made a comment that I don’t use credit cards.

Why not?

Well, my response in the comments was that I would prefer to trade the potential credit card rewards for simplicity in my financial life.

How Much in “Rewards” Am I Giving Up?

Let’s do some quick math. My average monthly expenses are roughly $5,000. Out of that, I would be able to charge about $2,250 onto credit cards. This equates to $27,000 per year that I would put on my figurative credit cards.

Let’s say that I could earn 2% cash back. That’s a whooping $540 in rewards for the year.

By not using credit cards, I’m not earning this $540.

Simplicity in My Financial Life

Instead of the $540, I am making my life a tiny bit simpler. Since I live on a budget, I am able to use my checkbook and debit card to pay for all of my expenses. Credit cards don’t even need to come into play at all.

I don’t have to carry around the extra cards, and I don’t have to remember to pay off the cards every month.

What Should You Do?

I don’t think that credit cards are necessary at all, and I recommend that you don’t use one. However, if you want to use them, keep these things in mind:

  1. The rewards really aren’t that great! Don’t let the rewards be the sole reason why you are using cards.
  2. Make sure you pay off your credit cards every month!
  3. You still need to operate on a budget.
  4. Credit cards should not be your “emergency fund” and should not be how you survive between paychecks.

If you like credit card rewards, then make sure that what you’re earning is worth the hassle. In my case, it’s not worth it.



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