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#172119 - 04/27/09 11:37 AM Life Without Credit Cards
MartinFocazio Offline

Pooh-Bah

Registered: 01/21/03
Posts: 2155
Loc: Bucks County PA
I think I've posted here that we don't use credit card debt (we use credit cards, but we never carry a balance).

We recently got a letter from one of the three credit card companies we work with and they are changing the terms and conditions of the agreement to such a degree that I closed the account and shredded the card. The terms included things like giving up my right to a jury trial in a dispute and a penalty interest rate for late payment of 39%.

I'm now left with only an American Express Card and a Discover Card, but I am beginning to ponder if it's even possible to function without a credit card given that I travel a lot, nobody takes checks anymore and debit cards are a major no-no for anyone who wants any level of consumer protection. As far as I can tell you can't rent a car or get a hotel room reservation without a credit card, and buying stuff online can be a hassle.

But maybe someone here has done it? Anybody? Anybody? Bueller?

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#172121 - 04/27/09 11:58 AM Re: Life Without Credit Cards [Re: MartinFocazio]
scafool Offline
Pooh-Bah

Registered: 12/18/08
Posts: 1534
Loc: Muskoka
I live without credit cards, and for some things like reservations and car rentals it is very hard. That is true.
A lot of places will not even accept cash, forget checks.
In addition to not wanting the problems of handling money they want that card number as a guarantee, just in case you damage their property.
_________________________
May set off to explore without any sense of direction or how to return.

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#172123 - 04/27/09 12:04 PM Re: Life Without Credit Cards [Re: MartinFocazio]
Am_Fear_Liath_Mor Offline
Carpal Tunnel

Registered: 08/03/07
Posts: 3078
Quote:
but we never carry a balance


This is where your problem most likely occoured with your CC company whose attempt to bump you of their books by changing your T&Cs to the point they were unacceptable appear to have succeeded. I bet your credit card company was glad to see the back of you.


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#172124 - 04/27/09 12:49 PM Re: Life Without Credit Cards [Re: Am_Fear_Liath_Mor]
dougwalkabout Offline
Crazy Canuck
Carpal Tunnel

Registered: 02/03/07
Posts: 2884
Loc: Alberta, Canada
I think it would be really tough to operate without a credit card.

In my experience, the issuing bank determines at least some of the card's policies. Some are *much* more predatory and mean-spirited than others, trying to get you deep in debt and milk you dry.

I try to use my travel backup card once a year, which I assume keeps it active on their books.

I never carry a balance under any circumstances. And my cards all give me Air Miles or a percentage of my purchase back. Might as well, nobody gives discounts for cash any more.


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#172132 - 04/27/09 01:53 PM Re: Life Without Credit Cards [Re: MartinFocazio]
Bear_Claw_Chris_Lapp Offline
Enthusiast

Registered: 08/23/07
Posts: 227
Loc: Sector 16
Originally Posted By: martinfocazio
I think I've posted here that we don't use credit card debt (we use credit cards, but we never carry a balance).


Same here, I pay mine off every month, and about 2 months ago, one of the 2 cards I had, closed my account and sent me a letter telling me to destroy my car.

I was heart broke... smile

I'm considering going to a "no credit card" life, and just using a debit card. In the past, I had fears about it, but researching it a little, they are safer than they used to be.

Here's a little about it from Dave Ramsey.

http://www.daveramsey.com/etc/cms/basics_of_debit_card_7085.htmlc

My thoughts were to maybe open a separate bank account with a Debit card, that is only for online transaction, and only has a nominal amount in it to cover online purchases.

Worst case, if someone stole the number, all they could get is what's in that one account.
_________________________
In omnia paratus

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#172134 - 04/27/09 02:02 PM Re: Life Without Credit Cards [Re: MartinFocazio]
falcon5000 Offline
Addict

Registered: 09/08/05
Posts: 662
I also carry American Express for a card, they are by far the best for fraud protection. I only have one Visa and one American Express Card and it has done everything I need to do, now on the flip side to continue your path with cash only, the things that you could do is use your banks debit/visa card or if you don't won't to explore that route, then I've seen many of the pay as you go credit cards in 7-11 that you add dollars to the card just as you would a pay as you go card. You would use it when you would absolutely need a credit card but I'm not sure if the rental agents for cars would accept that.

https://www.allaccesscard.com/prepaid-de...CFQITswodcT6gFg

https://www.netspend.com/

And of course a forum that talks about them being a rip off but for emergency may be a option

http://forums.moneysavingexpert.com/showthread.html?t=311257
_________________________
Failure is not an option!
USMC Jungle Environmental Survival Training PI 1985

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#172136 - 04/27/09 02:06 PM Re: Life Without Credit Cards [Re: Bear_Claw_Chris_Lapp]
Lono Offline
Old Hand

Registered: 10/19/06
Posts: 1013
Loc: Pacific NW, USA
Not all credit card lenders are going to screw you - look into CCs from your credit union or associated with your retirement plan, ex. Fidelity offers a variety of cards / plans. The CC lender is much less likely to screw you over if you have related financial business with their partner. We have two cards, one from our credit union and the other from Fidelity, and they both tolerate the fact that we pay in time, in full, and have never carried a balance.

The current business of the mainstream credit card industry *is* to engage with customers who carry debt and return a higher rate of return for the lender. They'll do whatever they can to cultivate that kind of customer, and if its not in their financial interest to carry a customer who only returns the transaction percentage (defn: deadbeats), they will do what they can to dis-incentivize your participation.

Years ago I had a card from a major well-known telecommunications company / lender that did pretty much this, including rapidly shifting the due date for payments, such that if I didn't read the bill closely I would be responsible for a late payment (a deceptive practice since outlawed, they must give 30 days notice of changes) and one that was especially fraudulent, declaring my payment as late even when my payment was sent on time (paper mail, but my check would clear at my bank 4 days ahead of their due date, they would simply claim I hadn't paid until it was late). Instead of cancelling the card I held it and just never used it. I would get a notice every 6 months that my card was about to cancel for lack of use, I would make one transaction, and wait 6 more months to make another, I kept that up for several years until I had established history with one of my current cards. Don't rush into cancelling cards if you can help it and you need your credit rating, cancelling can impact your credit rating for a while. Cancelling one card after holding another for at least a few years, not so much.

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#172137 - 04/27/09 02:17 PM Re: Life Without Credit Cards [Re: Lono]
Arney Offline
Pooh-Bah

Registered: 09/15/05
Posts: 2485
Loc: California
Originally Posted By: Lono
...if its not in their financial interest to carry a customer who only returns the transaction percentage (defn: deadbeats), they will do what they can to dis-incentivize your participation.

I'm trying to imagine a situation where a credit card company would NOT want even just the revenue from transactions, and I can't really imagine it. Unless you charge very, very little, carry no balance, always pay on time, and tie up a customer service person on the phone several times a month, it's hard for me to imagine that the CC company wouldn't want your business.

Actually, I've also heard the opposite situation--that customers with large balances are offered incentives to pay them off sooner rather than later. Apparently, the logic behind that is that all these large CC balances appear as liabilities on their balance sheets. One way to look stronger financially is to push down the liabilities on your books.

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#172138 - 04/27/09 02:24 PM Re: Life Without Credit Cards [Re: falcon5000]
Arney Offline
Pooh-Bah

Registered: 09/15/05
Posts: 2485
Loc: California
Originally Posted By: falcon5000
I've seen many of the pay as you go credit cards in 7-11 that you add dollars to the card... I'm not sure if the rental agents for cars would accept that.

I've also wondered if these prepaid "credit cards" could be used to rent a car or book a room, too. Considering the increasing popularity of pay-as-you-go cell phone service, maybe we'll see more interest in these cards in the near future, too. Especially if the terms on their regular CC's get more and more punitive.

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#172153 - 04/27/09 04:06 PM Re: Life Without Credit Cards [Re: falcon5000]
MartinFocazio Offline

Pooh-Bah

Registered: 01/21/03
Posts: 2155
Loc: Bucks County PA
Originally Posted By: falcon5000
I also carry American Express for a card, they are by far the best for fraud protection.


Just as a reference point. I work at a Digital Media agency in New York City and we do all the web work for one of the big issuers of credit cards (Hint: the name of the company does not start with an A, an M or a V) so I'm well versed in ins and outs of the business.

As far as Fraud protection goes - there is no company with fraud protection that is much better than anyone else's because it's all covered under federal law and is limited to $50 and most card issuers round that down to zero. All you have to do is keep a moderate level of control over your account, report fraudulent activity as soon as you suspect it and that's it. The "service" of alerting you to fraudulent activity on your card by the card issuers is in their self-interest - they really don't want to eat more expenses than they have to.


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