25 Reasons to Cut Up Your Credit Cards

April 25, 2017

25 Reasons to Cut Up Your Credit Cards

Are you thinking about ditching your credit cards? Making the decision to cut up your credit cards can feel scary especially if you have spent years relying on them.

When I tell someone that I don’t use credit cards and only use cash or a debit card, I can almost instantly see the surprise and confusion on their face.

They question how I do things like travel, rent a car, handle an emergency, etc. Basically, they want to know how I survive without having a credit card, and they don’t understand why I would make that choice. I’ve even been asked if I have a discipline issue.

I used to have credit cards and even though using them earned me free travel, along with that perk also came the ability to live beyond my means, anxiety, and money stress in my marriage. After years of use, I decided I wanted out.

Everyone is different, and I believe in doing what works for you. Some people swear by a cash-only lifestyle, while others declare the benefits and perks of using credit cards. It’s important to identify the best path for you.

That being said, there is much to gain by doing away with your credit cards. Here are some reasons you might want to go ahead and get those scissors out and cut up your credit cards.

25 Benefits of Not Using Your Credit Cards

  1. Using cash helps you stick to your budget. When the money is gone, you stop spending.
  2. No more mid-month, “Stop using the credit card!” panic moments.
  3. You won’t have the ability to live beyond your means and go into (further) debt.
  4. No more struggles with “should I buy it or shouldn’t I?”; if the money isn’t there, the decision is already made.
  5. You’ll have fewer bills to worry about and pay.
  6. It will take you less time to do your monthly budget.
  7. You’ll know exactly what you’ve spent your money on and won’t need a statement to tell you.
  8. Handling emergencies with cash is less stressful.
  9. There’s never any fear when buying something, that the transaction won’t go through.
  10. Less stress and anxiety (even if you pay off your balances every month).
  11. There is ZERO possibility of paying interest and late fees.
  12. There is never any temptation to buy something and pay for it later.
  13. No more juggling your purchases with your paycheck.
  14. You’ll have greater clarity on your spending.
  15. No more constantly checking your credit card balance throughout the month.
  16. You’ll learn delayed gratification.
  17. There are no rewards or incentives that may cause you to overspend.
  18. You’ll never be surprised to find out how much you’ve spent.
  19. You get to focus on future purchases instead of past purchases.
  20. You’ll never “forget” that you spent money on something.
  21. When taking a vacation, there’s no uneasiness that you’re sending too much.
  22. You’ll discover that credit cards provide a false sense of security.
  23. The line between your needs and your wants becomes amazingly clear.
  24. You’ll learn to be more intentional and thoughtful about your purchases.
  25. PEACE

Related Reading
•   The Downsides of Using Cash Only
•   How to Save $1000 Quickly
•   How to Squeeze $500 Out of Your Budget
•   8 Reasons Why Your Budget Doesn’t Work

Decide What Your Incentive Is

The greatest benefit of not using credit cards is also an impossible one to quantify—peace. You stand to gain a deep sense of peace and freedom in not using credit cards—even though you may not get cash-back, points, and airline miles.

Even people who swear by paying their credit cards off every month, never carry a balance, and strictly use their cards for the perks admit that there is stress involved with that process, and oh, there was that one time they did leave a balance on the card (and that other time).

Again, choosing to cut up your credit cards is a big decision and an individual one, and there is much to consider before deciding to stop using and close your credit card accounts.

Personally, having peace when I do the budget; when I’m making purchases; throughout the month; and in my financial life in general, is a far greater incentive for me than cash-back or a free airline ticket. Now that you know some benefits of ditching your cards consider carefully whether it’s the right path for you.

Would you ever cut up your credit cards and close your accounts? Have you already? Why? Or, do you swear by using credit cards? What are the benefits you experience? Let me know your thoughts in the comments!

Editor’s Note: This post was originally published in June 2016 and has been updated.

16 Comments

  1. FINANCESUPERHERO

    This is a great list, Alaya. While I personally use a credit for select expenses and pay off the balance in full each month, I can relate to your points. The primary benefit of using your debit card and cash is psychological, in my opinion. Like you wrote, it is hard to rationalize rewards and cash back having a greater value than peace.

    Reply
    • Alaya

      Thanks. For me, the peace definitely trumps all the other reasons!

      Reply
  2. Tia @ FinanciallyFit&Fab

    I will say I use credit cards quite a bit for a few reasons. First of all, I have been a victim of identity theft in the past. Credit card companies are amazing about taking care of those situations quickly and without a hassle. In addition, I love love love traveling with points. Credit cards do take a lot of will power though. You are right it is easy to live beyond your means when you are looking at your available credit instead of bank balance.

    Reply
    • Alaya

      Thanks Tia. Although debit cards provide the same protection, I can see in the case of ID theft where having false charges on a credit card would be “preferred” over charges on a debit card. And yes, free travel is enticing!

      Reply
  3. Bill Dwight

    Love the list. I’m curious how you handle payment online. I’m guessing you use a payment system like PayPal that is linked to your checking account. I think prepaid cards are a decent alternative or adjunct to cash. They have all the properties listed except #9 – you do have the possibility of declines (if you fail to check your balance ahead of time or if a merchant does not accept them). Some added benefits over cash: purchase protections (a good card will have protection vs unauthorized use), automatic tracking of transactions with online history, and safety (lost or stolen? just lock the card and order another). I basically use my prepaid card as an electronic version of cash. That said, i always carry some cash too to deal with the occasional #9 issue.

    Reply
    • Alaya

      Hi Bill. I do use a debit card, so I either use it or bank drafts for online payments. Prepaid cards are a great alternative to credit cards! I have lost cash before (and found it) but there was no one to call to replace it. 🙂

      Reply
  4. colin // rebelwithaplan

    I got my first credit card 8 months ago and make a habit of putting some things on it and then paying it in full every month to avoid any interest charges. I’m still not sure if I’m pro-credit card or not. It is helping me build credit, which is good.

    Reply
    • Alaya

      Glad you’re using it in a way that works for you. Love your site, BTW!

      Reply
  5. Lloyd Phillips

    #1 just completes it for me. By sticking to a budget with what is in my account, once my money has gone it’s gone, I either find some more cash or starve until pay day.

    Reply
    • Alaya

      Exactly! Those are the options, and that’s it.

      Reply
      • Lloyd Phillips

        Hi Alaya, that said, if you have credit card debt I came up with a method of saving interest by piling all your money onto the card and then living off your credit card until next pay day. Seems counter-intuitive (hence me calling my blog post and method just that). BUT it takes self-control to have a budget that you stick to when using your credit card. Here’s my post, if I may share it with you: http://theextraincomeproject.com/the-counter-intuitive-way-to-pay-off-your-credit-card/

        Reply
        • Alaya

          Thanks for sharing Lloyd. I’m glad that method is working for you!

          Reply
  6. Jason Tremere

    I absolutely love credit card bonuses! I have applied for many but pay off the balance every month. Welcome bonuses have provided me 5 free flights and I have enough for 5 more (or 1 ticket around the world). I have a card that gives me free food items, one that gives me 0% interest borrowing, one that gives me free movies, one that gives me 0% foreign currency conversion surcharge, one that saved me hundreds in price protection and one that recently saved me $168 on an extended warranty camera repair. Using credit cards to your advantage is possible! I also raised my credit score in the process of applying for them, building payment history and using them wisely.

    Reply
    • Alaya

      That’s impressive! When I used cards for points, I tended to overspend. I was one of the millions who fall victim to that marketing tactic. That’s great that you’re able to make it work to your benefit.

      Reply
  7. Lisa

    Peace! Yes, it’s so true. The other reasons are all great but peace of mind is one that simply can’t be quantified but is also the most rewarding, in my opinion.

    Reply
    • Alaya

      Yup, for me it supersedes everything else!

      Reply

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