Reasons Why I Don’t Have A Credit Card

Not having a credit card is not an issue for me. Aside from the incident that happened to me years ago, which will be written in due time, I have 11 reasons why I don’t have one.

1. Cash is King

There are more freebies when you buy things in cash. I get 10% discount on some items if I use cash instead of card. Just talk to the customer relations officer and I’m sure he’ll be giving you favorable discounts.

2. For Security Reasons

Identity theft is rampant in credit cards - unlike in debit cards. Just look at what happened to me.

3. I don’t want to complicate things

I go to the store where I want to buy some clothes and some shoes. I pick up some items, proceed to the counter, get some cash in my wallet and leave the store. I don’t have to compute how much I charged myself moreover I don’t have to wait for my billing statement before paying.

4. It’s easier to budget with cash

I think this is plain english. No need to expound.

5. Spend less

I can track everything with cash. And I can easily down size if necessary.

6. Maintain my investment amount

The effect of spending less is maintaining my investment amount. I am happier with this set up.

7. I am not a fan of credit card perks

I often see people go after the credit card perks like free food, free travel etc. If I may compute, I can have those freebies at a cheaper price without charging my card over my intended limit.

8. I can still book for travels

Most of my travel were booked via credit cards of office mates. They get to have the points while I get to have my tickets. Fair enough for me.

9. No debt = No hassle

10. Donations are easily done with cash

Although donations via credit is now acceptable, I still want my donations in cash. Less hassle to the organizations I support. Less processing more time on other things.

11. I don’t treat credit card as an emergency fund

People mistakenly treat credit card as their emergency fund. Well I don’t. I have a healthy sum of money in my bank account labeled as “For Emergency Use Only!”

There you go. I hope you picked up some really good tips.

~Till next time.

Credit Card Debt

You might wonder why I don’t discuss much about credit card debt in my blogs. That’s because I don’t really have anything to discuss about it. As much as possible I don’t want readers to incur credit card debts.

But still I feel the urge of giving something to you regarding this matter.

I have lots of friends who are digging themselves into credit card debt. They treat it as an easy way to get money. They have the motto “I want it NOW!”

But then one will realize that getting yourself in deep debt is a burden physically, emotionally and psychologically.

Here are a few steps to follow to avoid irresponsible consumer debt.

1. Do not use cash advance

The cash advance is there to mindset people that they have cash and it's ready to be splurged. Once you get the cash advance, the interest starts to tick.

2. Do not max out your credit limit if you cannot pay it in full on cut-off date

Use your card good as cash. Pay everything on or before the cut off date.

3. Avoid unnecessary expenses

4. Do not carry your credit card when you intend to shop

Most of the times people overcharge themselves because plastic is convenient. Oftentimes they miscalculate.

5. If you have an outstanding credit card debt, DO NOT borrow anymore.

Settle your debt first. Stop the urge.

6. Compute

Oftentimes people forget to compute. Your cellular phone has a calculator. Use it.

7. Pay On-time

Credit Card or No Credit Card?

Last week I was called by a banker and told me that I have a priviledge card from their office. She just wants to confirm my mailing address which happens to be my office address. I asked her what a priviledge card is. She told me it’s a pre-approved credit card. I was offered credit cards half a dozen times but I continue to decline. I am not against credit cards but I don’t see the need of owning one today. Maybe few years from now.

~Till then.

On Credit Card

A certain employee of a bank once sent me a text message saying they will send me a pre-approved credit card. All I have to do is send them my personal details thruogh the same number or go to any branch of that bank and update my details. I was confused because it was Sunday and I was about to hear the mass when I got a message like that. Do they need to do this on a Sunday afternoon? But I politely replied because I am a depositor of that particular bank and I don’t want them to brand me as a snob client. My text message goes like this, “Hi Ms. 'Jane Doe'. I don’t think I need a credit card. Please don’t send it to me. Thanks for the info anyway.” True enough, I did not receive a card.

Almost everybody wants a credit card because it can give you a better purchasing power. But, If not managed well, it can give you headache. No doubt I can manage a credit card but I don’t see the need right now. Who doesn’t want freebies or perks? Of coure I do. But to have those freebies I should spend more. That doesn’t work for me.

What do I miss in life not having a credit card? Actually, nothing. I have my debit card and a good bank standing and those are the things that matter to me the most. ;)

~till then

Credit Card as Emergency Fund?

Most of the people I have talked to consider credit card as an emergency fund. They will always tell me, “At least if an emergency, like hospitalization occurs, we have something to present at the hospital.” And I always tell them, "Can’t you make it with your cash?” Then they will reply, “Well, you know what, we have no cash at the moment that is why we need credit cards.”

Emergency funds and credit cards are two different things. You cannot treat the two as synonymous and similar.

Emergency fund is a part of our financial foundation. This is like a solid wall you can lean on. Why? Because it will act like a cushion if an emergency situation occurs. Imagine you are a bird and then a hunter came, aimed towards you and “Bang!” Your right wing was shot. You don’t have an option but to go down. You panicked. You didn’t know what to do. You are not prepared for this. You were going down so fast that you hit the ground head first. Then you died. What if this happens to your finances? You are a happy go lucky man. You live your life each day like there is no tomorrow. You shop too much, play so hard and eat like a king. Because of your lifestyle you got sick. You don’t have an emergency fund and nothing to present to the hospital.

Let’s go back to the story and pretend that you have a credit card as your emergency fund. If you get sick you charge the fees to the card. Yes you will be treated. Yes you can go out of the hospital. But because you don’t have spare cash you are forced to pay every payday depending on the amount. What if your 15-day salary can’t cover for the expenses? What if your 1 month salary can’t cover for it? Worst, what if your 2 month salary can’t? That will be the time your hospital debt will incur charges and fees. Instead of paying for the principal alone you are forced to pay for the interests and charges.

Imagine you saved three to six times of your monthly income and put it in a bank? You got sick and was charged 4 times of your monthly salary. Will you not be able to pay for it right away? Will you be happy to go out of the hospital, treated and free of debt?

Emergency funds are not just for hospital bills. They are for emergency situations. Like a sudden flood, house repair and most of all job loss. Can your credit card cover for your needs when you lose your job? For a month maybe but not for three months.

~till then