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Credit-free! - Suffering From Elation
A Survivor's Tale
I would like to announce that I just cancelled my credit card and chopped it into teeny tiny pieces. Hooray! I'm pretty pleased with myself, so brace yourself for the written equivalent of me dancing and going "neener-neener!" at our credit-fuelled culture.

I have one personal debt left to pay - a favour from a friend at Interrobang's birth - and I'll be taking a massive chunk off that next payday, and the rest the payday after, with the net result being complete freedom from debt (not counting the block of land) by Christmas.

When I called the bank to cancel my credit card, three different operators tried to do the hard sell with attempts to convince me to keep it or upgrade. Oy vey. Then, when my coworkers saw me cutting it up, even they started acting shocked that I was getting rid of it.

What if I needed to buy something online?

My ATM card is also a debit card, which works the same way as a credit card except it uses only the money I already have. I can purchase anything from any online site with that card and my own money.

What if I had an emergency?

There's no such thing as an emergency purchase - what is so urgent that it can't wait a week or two until my next payday? Besides, now that I'm done paying back the credit card I can put those same amounts into my ING savings account, build up to a balance equal to what my credit card would have been able to loan me, and have that as my emergency fallback.

My mortgage repayments come out of my account automatically first thing after my pay comes in, I always have enough for my rent, there is always some form of food in the house, and if I am utterly skin-flint broke, getting to work isn't a problem - it's just an hour's walk away. Medicare will pay for my ambulance and hospital stay + treatment in the case of a real emergency. Thanks, evil socialised national medical system! I keep a savings account over at ING with at least $100 floating in it at all times, just in case. If for some reason I incurred a medical cost that Medicare didn't cover - this is the only expense I can see being a real emergency that ordinary budgeting and organisation won't cover - I know one or the other of my parents will come through with a loan. I don't have children or dependents of any kind, barring the cats - and on the off chance that one of the healthy little fuzzballs had to take an emergency trip to the vet, I know a vet who bills as an alternative to payment-up-front, and doesn't charge interest.

I prepay my mobile phone, and if I run out of phone-credit before I get paid, I suck it up and don't call anyone, or text from the numerous free SMS sites online.

I maintain a good credit record via my regular over-repayments to my block of land, demonstrating my ability to meet (and exceed) the requirements of a large loan. Actually, Adders tells me that making repayments above the minimum may actually disadvantage me when it comes to getting a loan in future (as rapid repayment robs banks of the interest profit they make) but I figure the benefits of paying that loan off faster outweigh the disadvantages.

Besides buying something massive like property, there is no reason someone my age needs to have a credit card. But I understand my coworkers' bewilderment. It's hard to turn your back on available money, even when it's not your own. That's why I cancelled the fucker and chopped it into tiny little pieces.
14 have fought ~ fight the power!
(Deleted comment)
tania From: tania Date: November 19th, 2008 01:25 am (UTC) (Link)
I agree - what I caught myself using it most for was really unnecessary purchases... just STUFF, and later I would barely even be able to remember what I'd bought or why it was so vital to have it RIGHT THEN.

I've also put a small ban on myself buying any more STUFF until I offload 80% of the contents of the garage. If Joe and I are going to move into an apartment we're going to have to really streamline our possessions 'til it hurts. Hurts goooood. We're both bowerbirds by nature, and it's incredible how much crap we've managed to accumulate in the years since we left home.

Love the icon; I remember when I was reading the fourth book for the first time I went 'til 3am in the morning to finish it because I just couldn't stop!
From: pariahsdream Date: November 19th, 2008 01:24 am (UTC) (Link)
Well it's a little different for everyone. I have one credit card that's a pure credit card and that's it. I have it for a) emergencies (car repairs, medical, real emergencies which sometimes can't wait until next payday) and on the off chance that my ATM card wouldn't go through on a purchase. From my time at the condos, I realized having one 'extra' card isn't a bad thing.
Granted, I'm apparently way more sensible than about 60% of people who own credit cards atm. Which reminds me, I need to get them to lower my limit again. They keep upping it and I don't need it- not to mention if it gets stolen that's more money they can rack up on MY account.
tania From: tania Date: November 19th, 2008 01:30 am (UTC) (Link)
That's fair enough - If you can keep it and not use it, total power to you! I'm afraid I don't have the willpower, so I need to just not have it for the same reason I don't buy cookies with the grocery shopping... if they're there, I'll eat 'em; if they're not there I don't miss them.

Admittedly, my life and budget right now are set up with massive amounts of wriggle-room, I use public transport and my feet rather than a car (though this is one of the most frustrating aspects of my lifestyle; the public transport here is shoddy), and with our healthcare system here, true medical emergencies (of the fiscally-straining variety) are very rare. Once my debts are paid I'm going to save for a week or two and go to the dentist though, I'm overdue there!

And yeah, I have a moral objection to the sort of thing your bank is doing to you - offering more and more money in the hopes of netting in undisciplined young'uns who'll blow it all, then spend the next few years practically working for the bank as unofficial indentured slaves to pay back the debt and interest. :\
From: pariahsdream Date: November 19th, 2008 02:13 am (UTC) (Link)
My parents were pretty good at instilling in me a sense of not spending money I don't have. I basically treat my credit card like a second ATM card. Only a few times have I not paid off the whole amount that month.

And yeah, there is that. You're very fortunate and you're being smart about how you're spending your money now. Kudos to you. There is public transit here where I am now but in a lot of places, particularly small towns its not available or isn't feasible due to when they run vs. work schedules. So yeah, kinda have to have a car in a lot of places in the States.

You and me both. It's ridiculous. It's like, 'hey, she's not spending as much money as she can, let's give her MOAR debt she could rack up!" It makes no sense. If I don't request my balance being upped, why are they doing it?

What's ever more sad/infuriating is how aggressive the banks go after young people- I'm taking young. I swear, I was getting credit card applications when I was in high school. Do they honestly think most 16 year olds are capable of handling that? Bah.
From: niqaeli Date: November 19th, 2008 02:02 am (UTC) (Link)
It's great that you can turn your back on credit cards, that there's no such thing as an emergency purchase or cost for you that cannot wait until your next paycheck. It's just that it's not true for everyone, certainly not most people I know here in America. I'm fortunate enough to have decent health insurance and you still couldn't get me to give up having at least one credit card on hand, to cover my deductible were I to land in the hospital. And then the cats, well, no e-vet around us offers so flexible a payment system -- and I have had to take cats in several times in the middle of the night and/or on a weekend. And were my car to die, well, it's not precisely practical for me to walk, it being 15 miles away. And I'm really fairly fortunate to be able to live even that close to where I work. Now, I could take the bus, if only my city's public transit system were at all functional for getting you anywhere in a remotely timely fashion.

So -- yeah. *wry* I really wish I had the option to turn my back on credit cards but I don't. I'm choosing not to use them at all at this point in time, because I *have* had a number of emergency costs rack up debt -- but I can't just chop them up because it's possible I'll run into another emergency.
From: dawnstar_au Date: November 19th, 2008 02:41 am (UTC) (Link)
If you haven't found it or used it yet I highly recommend Wesabe for tracking budgeting, spending, all sorts of stuff. Really kick ass forums as well.

Although a strong US bent there is an active AU subset and lets face it most of the concepts of saving and being finacially sane are the same everywhere.

Congrats on getting rid of the card. It's a define goal of mine after the US trip - for the moment I'm glad to have had it at zero oweing for 4 months now.
leelakin From: leelakin Date: November 19th, 2008 04:01 am (UTC) (Link)
Whooooo you're free now! XDDD That's awesome. We're not that much of a credit card country here, like the US or something @_@;;; I'm really glad about it.
gushi From: gushi Date: November 19th, 2008 04:22 am (UTC) (Link)
Actually, there is one reason.

Car rentals.

Yes, I know you probably don't need to do so now, but it is the policy of many car rental agencies to a) make the distinction between a credit and a debit card -- and their system knows somehow, there IS an account flag that's set somewhere in there. When that happens, they'll refuse to rent to you, even if you have five grand in the bank, or worse start requiring large cash deposits, plus secondary forms of ID (like letters proving address). In short, their policies are made to be diskish.

Ask me how I know.

Also, most credit cards, at least the higher end ones, offer better purchase protection on things like fraud or damaged goods -- simply because with a bank, they already have your money -- with a credit card, if you claim you didn't get what you paid for, it's within your right not to pay.

With the travel plans I know you have, you might want to consider keeping ONE active, even if only for these reasons.
tania From: tania Date: November 19th, 2008 05:23 am (UTC) (Link)
Guess who doesn't have a license? ;)

I've never seen the need. I honestly quite prefer travelling by buses, trains, whatever is available... being sealed into the air-conditioned leather-scented plastic-and-metal capsule of a rental car is, I feel, a bit of an inoculation from the real experience of being in a place.

The only downside is that when we're moving, I can't drive the truck, though I try to make up for it by covering the cost entirely (I pay cash ahead of time; truck rentals don't seem to be as assholeish as the car rental places you're describing). I'm going to get an open license when we move to Caloundra, as a just-in-case thing, and if I'm to travel overseas at any point I'll consider opening a credit card just for the duration of the trip. But I don't want to have one just sitting there, tempting me and accumulating unnecessary fees.
rahball From: rahball Date: November 19th, 2008 04:59 am (UTC) (Link)

We have a credit card account, but they must despise us because there's no annual fee and they've never gotten a single cent out of us. Except the fees for currency conversions, maybe, but you expect those.
sigmoidal_suseq From: sigmoidal_suseq Date: November 19th, 2008 07:34 am (UTC) (Link)

my first credit card was a complete disaster - I really don't know how my parents manage about 6 each (business and personal) although I do love looking at dad's platinum amex card, it's just so damn shiny.
whyrl From: whyrl Date: November 19th, 2008 08:39 am (UTC) (Link)
What if something happened to one of your cats and it had to go to the vet for a few days?
tania From: tania Date: November 19th, 2008 10:10 pm (UTC) (Link)
As I said in the entry, there's a vet in West End who bills (ie, you can pay after the event), I have a current cushion of $100 for immediate emergencies just sitting in a savings account, and once my other debts are paid I'll be increasing that cushion to $1000. If something terrible happened between then and now, I know I could trust my parents to each loan me a little money just to see me through. They know I'm good for it. :)
flyingfluff From: flyingfluff Date: November 19th, 2008 04:11 pm (UTC) (Link)
Yay! No more credit card! Woooo!

I only have one because my mommy and daddy are paying for it. Plus, it's kinda a necessity here in the States to have some sort of good credit built up if I ever want to put a down payment on a house or something. If I weren't still a dependent of my parents, I probably won't not have a credit card and if I did, I'd stash it away so it was out of sight and out of mind.
14 have fought ~ fight the power!