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10 Reasons to Cancel ALL of Your Credit Cards Print E-mail
(13 votes, average 4.31 out of 5)
Personal Finance - Credit Cards
Written by April Borbon, Guest   
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10 Reasons to Cancel ALL of Your Credit Cards
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After paying it off, I just canceled my last bank credit card. My credit card debt has been slowly chipped away at and I’ve cancelled each of my cards as I’ve paid it off. When I called today to cancel the card, it was met with choruses of “don’t you need the credit card for emergencies?” by the customer service representative. Even if you have the best credit card, you don’t need it and here’s 10 reasons why:

1. I have $1000 put aside for emergencies. I used to use my credit cards for emergencies, but the funny thing is that my cards would reside at or near the maximum credit level, so I would only have $100 worth of credit to use for an emergency. That doesn’t even make sense. Having cash on hand makes sense.

2. I never want to be at the mercy of banks that will ding me for being literally an hour late making an online payment. The same is true for being at their mercy for interest rates, annual fees, a universal default clause, etc.  Even with the new changes in the law, even the best credit cards can change their rates on your future balances.

3. Credit cards are not necessary for travel, online purchases, credit card protection coverage, renting a car, etc. any more. Bank debit cards with the Visa or MasterCard logo work the same as a credit card (I do need to have cash in the account to cover the hold and the charges, but with the ATM card linked to my emergency fund account, it works just fine.)

4. I enjoy being “weird.” Most people have several credit cards and a mountain of debt. Weird people (like me) have no credit cards and no credit card debt.

5. If I can’t pay in cash, I will either need to buy something that I can afford, save money until I have the cash to buy the item I want, or not buy anything. Therefore, I won’t end up in debt.

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Thrifty Gal  - not universally evil |2011-03-28 18:57:58
Saying that credit cards are evil because some people can't handle them is like saying cars are evil because some people drive drunk.
Thrifty Gal  - I would NEVER have a debit card! |2011-03-28 18:54:11
I would NEVER get a debit card. First of all, when laws are passed giving credit card owners certain rights, these laws usually DO NOT apply to debit cards. Second, if a "bad guy" (identity thief) gets your debit card information, your bank account can be wiped out. Then you can't pay your bills (mortgage, etc.), or the checks will bounce. Third, a credit card is good in an emergency. What happens if you lose your job and run through all your savings? At least you could charge your groceries, as long as you can pay the minimum payment.
loan calculator  - loan calculator |2010-10-05 22:13:55
Great lists!i agree your all point.Thanks for mention here...
haverwench  - ..or, you could just pay them off... |2010-10-03 16:17:20
This article's title should really be, "10 Reasons to Cancel All Your Credit Cards if You Don't Have the Discipline to Pay Them Off Every Month."

I see articles all the time talking about the evils of credit cards and urging me to cut them all up, yet I have never seen a single convincing argument as to why credit cards are harmful if you never carry a balance.
Thrifty Gal  - no balance = no interest |2011-03-28 18:51:59
I've had credit cards for more than 30 years and have never carried a balance, nor paid a late fee. I pay the bill almost as soon as I get it, always within a week of receiving it. Plus I get cash back or air miles, depending on the card.
Amy  - I read too |2010-09-28 15:18:28
This is straight out of Dave Ramsey's Total Money Make Over.
Harmless  - I did it |2010-09-28 15:14:50
I stopped having a credit card about a decade ago, and it's never caused me any problems. I've taken my debit card abroad in Europe and Asia and used it without any difficulty; I've bought a condo without any problems. I've had a few big emergencies- a broken furnace, a totalled car- and dealt with them out of my savings. I think the "need" for a credit card is over-rated.
nicemarmot  - Really bad advise |2010-09-28 14:28:47
Although it's admirable to get rid of all debt, getting rid of credit cards is a bad idea. A debit card with a Visa/MasterCard logo is no replacement for a real credit card, which offers protections that those other cards don't. I guess if you have no self discipline or never need to travel anywhere or buy anything online you could be okay. Those that get rid of credit cards are trying to live in the world that they wish they were in, not the one that they actually are in. Credit cards are a necessary tool for modern living. The last thing you need is to buy a big ticket item and then have some problem where you can't perform a charge-back. Broken merchandise protection, rental car insurance, and merchandise warranty extensions are only some of the things you can get with a bona-fide credit card.
lkhalil  - Seriously, Julia! |2010-09-28 07:40:10
Thanks for your comment. I couldn't have said it better! Your comment mirrored my reaction to this fluffy, unsustainable article--word for word. Unbelievable! So, Thank you...Seriously, Julia!
frugal nomad  - almost two years |2010-09-30 11:41:30
I've done without a credit card for over two years. With the income we make in this country, anybody who has to borrow for anything but a house is mismanaging their money. The fact of the matter is that credit cards didn't become a necessity until the late seventies when banks started pushing them on the public. If you keep a healthy balance in your checking account, there is absolutely no reason for a credit card. The fewer your bills, the easier your life.

For your information, there are millions of Americans who don't even have checking accounts.

The simple fact is that credit cards are for borrowers. There is no difference between borrowing from your bank or your neighbor. If you don't need to do it - don't. I can pay my own bills without any assistance from either the bank or my neighbor.

Borrowing is a bad habit. Credit cards reinforce our worst tendencies to overindulge and spend. Now I say that with two years of personal experience living debt free without a single credit card in my pocket. There is nothing fluffy about that.
Thrifty Gal |2011-03-28 18:56:34
"With the income we make in this country..." What an elitist statement! Do you really think that EVERYONE is upper middle-class? What about people who make $10 an hour, 20 hours a week? I have a friend who just got a part-time job after more than a year of unemployment. He is grossing $400 a month.
Ed  - Don't agree |2010-09-27 11:11:25
I have always carried one credit card and pay it off every month. I have no ax to grind with the cc companies, as I haven't paid them a dime in over 25 years. These idiots are happy to let me use their money for free.

If you have cc bills, pay them off NOW. Put yourself on a budget. Build up a sizable cash reserve and start enjoying the life of financial independence. Do not allow these leaches to control your financial future.
Jim Y  - Kudos |2010-09-27 13:59:06
I could not agree more. Treat cc like cash, think before you spend, (do I need it or want it) I have used their money many times, 12 months no interest. Just keep track and PAY IT OFF.

BT  - Agree with ED |2010-09-27 14:32:40
This article is a knee jerk reaction.

Who else in the world is giving you $25K in an emergency, instantly?

Credit cards are good as long as you know how to use them.

docsmom  - Do we need credit cards? |2010-10-10 13:08:21
Having lived through the roll out of credit cards in the 70s, and having worked for 4 different banks at one time or another, I feel that I have to tell those of you who think credit cards are a necessity of modern life are deluding yourselves.

Credit cards exist to make money for the banks that issue them. Period.

We're fans of Dave Ramsey - whom someone else mentoned. We don't take everything the man says as gospel, nor do my husband and I practice everything he preaches, but yes, we have adequate cash reserves, yes, we manage our money, and no, we're not up to our eyeballs in debt.

I did keep 1 credit card - with a $1000 dollar limit. I'm not likely to need more than that on short notice, and it'll keep my credit score viable - although I'm beginning to care less and less about that as well.

C'mon people - do we REALLY need the biggest, fastest, newest of every item out there?? All I can say is, if you believe you do, or if your self worth is based on how many toys you own, then I wonder what you're even doing on this list??

julia  - seriously? |2010-09-27 11:03:29
I understand why people don't want to own a credit card, but your reasons are just bizarre. First of all, you say you don't need one because you keep $1000 in an emergency fund, and if you kept a credit card for emergencies you would only have $100 because you would use the rest of your credit line, seriously? You are so slaven to credit that you HAVE TO use it? actually several of your "reasons' are the same, if I have it I will use it. So what is stopping you from using your cash on what ever you would be using your credit card on??

and not having to carry it around in your wallet? no one said you had to do that in the first place.

as for using your Visa/MC Debit card like a credit card, that is just too risky. A lot of places that are your traditional "I need a credit card for this transaction" type places will reserve huge chunks of "credit" on a debit card. Just take your debit card to a gas station and watch them block off $100 or more to make sure you are able to pay for your gas. Same with renting a car or booking a hotel room. Debit cards are not nearly as safe as using a credit card, as there is almost no protection from theft. once the money is taken out of your checking account, you will have a devil of a time trying to get it back, and if all you have in your emergency fund is $1000 you might end up with several NSF fees to contend with.

Credit has its place as long as a person has some self control. If you don't have control with credit, you have bigger problems then just having credit card debt... cause people like that are going to spend no matter what.
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