15 Reasons Not To Have A Credit Card

Credit cards can become a financial problem if they are not paid off each month. Here are fifteen reasons not to have a credit card.

Jun 21, 2023

Credit cards have become accepted as a part of everyday life in modern society. The major problem with credit cards is if you fail to pay them off each month, you will have to pay interest on the credit. Credit card companies incentivize people to get credit cards with perks. Credit card companies target young people and college students who know nothing about personal finances or managing money. These are fifteen reasons not to have a credit card.

Temptation To Buy Things You Cannot Afford

The first reason not to have a credit card is you may be tempted to buy things you cannot afford. You may want to swipe it to purchase something online that you want. You may know that even though you cannot afford something, you think you can put it on your credit card.

May Not Like The Idea Of Having A Credit Card

The second reason is that you may not like having a credit card. Credit cards work by charging you interest when you fail to make a payment or when you do not pay your card off each month. Credit cards have high interest rates that currently average 20.69%. This means that you are building up debt each month exponentially.

You cannot Trust Yourself With A Credit Card

The third reason is that you cannot trust yourself with a credit card. You know yourself well enough that you would overspend when you have a credit card. You would impulsively purchase things. You would fail to stick to a budget.

One of the most extraordinary things you can learn is to know yourself. Society wants you to focus on others by giving them your time, attention, and money. Only when you know yourself can you improve your life, from your health to your finances.

Purchase Everything With Cash

Fourth, you could purchase everything with cash. This would mean that you have no reason to have a credit card. Even if you would pay off your credit card each month, you would rather pay for everything you buy with cash using your debit card.

Sometimes You May Have To Do Some Extra Steps

Fifth, you recognize that you may sometimes have to take extra steps to purchase more essential items. Modern society has built itself around credit cards. It says that it is best to have a credit score. This will then help you get a loan for a mortgage or help you with other items that are significant purchases.

You may have to spend more time researching online to find someone who will accept you without a credit card history. You may have to wait a bit longer while the company you are going through verifies that you can make your monthly payments. Or, you may have to set up an alternative way to make a payment or to pay for a purchase without a credit card. It will require additional time and effort. It will be worth it, though, since you are living below your means, buying everything with cash, and have no concerns about potential unsecured credit cards to worry about. A good example of extra steps that may be required would be traveling.

If you do travel out of the United States, it can be trickier. But you can look for ways to pay for your stay. According to Nerdwallet, other ways to pay for traveling include:

Paypal
Debit card
Cash
Third-party payment service companies.
Gift cards
Points and mileage programs

People In Other Countries Don't Need To Have Credit Cards

Sixth, people in other countries don’t need to have credit cards. Credit cards are primarily a Western phenomenon. Credit cards are convenient. The cost of convenience is the high interest rate.

Other countries and cultures still may primarily use paper currency and debit cards. There may be limited access to credit cards. This is fine. People can live under their means rather than overspending with a credit card.

According to Qorus Global, credit cards have never caught on in Europe. Yet other countries such as “Japan, the Netherlands, and Spain rely on factors like one’s income, repayment history, and length of employment to determine creditworthines.” There are yet other countries that do not allow credit card payments. These countries have their own systems to determine if someone will likely be able to pay off their debts or be creditworthy.

It is more a reflection of Western culture, particularly the United States, by wanting everything immediately. Credit cards are easy. They allow Americans to build up a credit score, but they can be dangerous if improperly used.

Can Help You To Save Towards Financial Goals

Seventh, not having a credit card can help you to better save towards financial goals. You will not be tempted to use it to buy something that you see online. It will help to simplify your budget and expenses. Credit card purchases show up differently in your bank’s credit card account. They can be challenging to track because there may be subscriptions you forgot about or another large payment you included in your budget but was paid with your credit card. If you don’t pay off your credit card each month, you must have the interest cost in your budget.

Unable To Control Oneself With A Credit Card

The eighth reason to not have a credit card is if you cannot control yourself with a credit card. You may compulsively buy items. You may find that it complicates your budget. You always find yourself overspending, despite trying your best to stick to a budget.

If that sounds like you, consider removing your credit card. There is a process to cancel your credit card. You'll be able to read about it here.

It’s A Myth That You Must Have A Credit Card

The ninth reason is that it is a myth that you must have a credit card. Big finance perpetuates this myth, particularly the credit card companies. Big finance wants you to be dependent upon it for everything from having a checking account at a big bank to investing with a well-known investing company.

Can Build Credit Through Other Ways

Tenth, you can build credit through other ways that do not require a credit card. It is a myth that you must have a credit card to build a credit history. You can establish credit through a credit-builder loan, a secured loan, or a co-signed loan. There are other ways to make your credit score in the United States without a credit card.

It May Not Affect Your Life As Much As You Think

Eleventh, not having a credit card may not affect your life as much as you think. What do you use your credit card for? Could you have paid for those with cash or another way? Could you set up another banking account solely for large purchases?

By not having a credit card, you limit yourself to better organizing your financial life. You only have to check your checking and savings accounts. You can better separate accounts into monthly payments, subscriptions, and large purchases. You could use multiple high-interest savings accounts for different uses. You can then transfer money to a main account for purchase as necessary.

An Emergency Fund Can Make Up For A Credit Card

Twelfth, a large emergency fund can make up for a credit card. If you know that you usually spend a certain amount each year on purchases with your credit card, you could create a separate emergency fund in a high-interest account that may give you a debit card to cover those purchases.

Budgeting Software Cannot Prevent Overspending With A Credit Card

The thirteenth reason is that budgeting software cannot prevent overspending with a credit card. Budgeting software is only as good as the person managing it. However, some budgeting software is better than others.

The psychological benefit is also seeing your checking account reach zero or near zero. You know you cannot spend or need to transfer money into that account. With a credit card, you tell yourself you can spend up to x monthly.

The first is a positive psychological reminder that leads to good financial well-being. The second can encourage you to spend rather than to save and live below your means.

Credit Cards Are A Scam

Fourteenth, credit cards are a scam. Credit cards are a scam because it is a way to get people trapped in debt. Once many people cannot pay it off each month, they pay the minimum amount. They then need to pay for the additional interest. The high interest rates of upwards of 20% each month quickly build up to mountains of debt.

Many financial tools we take for granted in the United States are scams. The Federal Reserve, and all central banks, is a scam. Banking is a scam since the money is no longer yours once you deposit your money to the bank. It becomes the banks. Credit cards are a scam. This is because you are paying with interest instead of with cash. In certain circumstances, learn to use these scams to your advantage since they are built into society. In other instances, decide to limit or end your use of them altogether.

Not Having A Credit Card Is Freeing

Finally, not having a credit card is freeing because it makes it easier to live below your means. You may have to jump through a few extra hoops here and there. You won’t be worried about accidentally miscalculating and paying high interest for a month until you can immediately pay it off.

Solutions

You can work to get rid of your credit card.
You can drastically decrease how much you use your credit card.
You can only use your credit card for certain online purchases.

Even if you are not ready to separate from your credit card, there are solutions to work to limit the control that the credit card companies have over you. You could decide that some of these are fifteen legitimate reasons not to have a credit card. You could then follow these steps to work to cancel your credit card. You could also work to reduce your use of your credit card. You would then only use it for certain online or smaller purchases that you can pay off at the end of each month.

You would then focus on building an emergency fund to cover the large purchases you have put on your credit card. Those purchases may include car repairs, self-education tuition (digital courses), insurance coverage, and online subscriptions.

Secure Single’s Algorithm recommends:

Summary

Modern society says that you must have a credit card. You could decide to become less reliant on your credit card. You may also choose to get rid of it altogether.

There is nothing wrong with not having a credit card. You may be better able to manage your finances without it. You may need to sometimes go through extra hoops, but if that works best for you, there is no reason to have a credit card.

How could paying for things that you can afford with cash or a debit card help your financial life?