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I’m 28, and I’ve Never Had a Credit Card. Ever.

  September 16

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Hi everyone! Hope y’all are having a great week! I didn’t mean to leave you hanging by leaving out a blonde pic of myself last week! It’s nothing fancy – just a few highlights! – but I hadn’t washed my hair in a while so it wasn’t looking too purty. I will get to it. #keepingitreal

In the meantime, while I am trying to find the time to actually be presentable for FinCon and take care of the beans who are suffering from itty bitty baby colds, please welcome a blogger many of you know by now, Natalie from Finance Girl. Her story is a fascinating one! Take it away, Natalie!

credit card

I’m 28 years old, and I’ve never had a credit card. I didn’t know this was weird until I started talking about it more and saw people’s reactions. Lots of confusion, that’s for sure! Since then, I’ve discovered that I’m definitely in the small minority of people by not using credit cards.

There are two main reasons why I’ve never had a credit card that stem from my past: 1) my grandpa told me not to, and 2) I’m a spender and do not believe I would consistently pay off my credit card every month.

My Money Blueprint

When I was in my late teens, my grandpa said to me “using a credit card is like taking a mortgage out on your clothes.” Apparently, I’m very impressionable because that’s all it took. I never questioned it; never thought twice about it. My grandparents are extremely frugal and well off (and good financial role models, whereas I don’t have that example from my parents), so I thought (and still think) they know what they’re talking about when it comes to money.

The second reason I never got a credit card was because of my propensity to spend money. I naturally want things right now and usually spend based on how I’m feeling and justify it later. I like some of the finer things in life, and I think that it would be incredibly hard, if not impossible, for me to only use my credit card up to the amount I could pay off every month. So for me, I don’t even want to have that temptation. I understand that everyone is not like me, so I don’t think this is the way to go for everyone. But for those of you interested, here is how I operate without a credit card.

How I Operate Without A Credit Card

I have never thought of credit cards as an option. Not once. It just didn’t cross my mind as something that I should have while growing up, and that hasn’t changed. During college, I saved money over the summers and used my savings for any extra spending money. Now, I operate the good old fashioned way: cash only baby. Actually, it’s more like the “modern old fashioned way”: using my debit card as credit. By using my debit card, I can only spend what I have. I choose “credit” instead of “debit” when I use my debit card so that I’m afforded all of the protections that Visa offers in terms of fraud (I have a Chase Visa debit card). By using cash and spending only what I have in the bank, I always have enough.

My Credit

Unfortunately, no one brainwashed me about not getting student loans like my grandpa brainwashed me about not getting a credit card. So, I graduated law school with $206,000 in student loans! My student loan debt is now at $159,000. Student loans are reported to credit bureaus as installment loans (which is different than credit cards, which are reported as revolving credit), so this is how I build my credit: by paying off my student loan debt. Because I pay off my student loans consistently and have several student loans showing on my credit report, I am building a good credit history on my credit reports, and I have an excellent credit score.

I am in a unique situation where I have a lot of student loans being reported, which is why this works for me, and as a result I have great credit. I understand this is a completely different situation than someone without credit or student loans. In my case, I don’t need credit cards to build credit; my student loans do that.

I will say that personally having a good credit score is important to me, but it ranks lower on my priority list than being out of debt and having a strong financial foundation. I don’t know what I’ll do once my loans are paid in full, but I’ll worry about that when the time comes (I know it will not be getting a credit card though). For now, my student loans keep my credit in tip top shape.

The Perks I’m Giving Up

I understand fully that I am passing up on miles and other credit card rewards that could “save me money”. But I know myself. I know that a $400 flight isn’t worth it because of my propensity to spend. I’d so much rather be in the habit of saving ahead of time and paying for things with cash than having my credit card as a backup plan. It’s really just my mindset about debt and credit cards; they’re just not for me.

I heard Dave Ramsey say on one of his episodes that “if debt is an option, you’ll always be in debt.” I truly believe this. By not having a credit card, I don’t even give myself the option. I literally cannot get myself into any more debt than I am already in. And with $159,000 of student loan debt, I think that’s enough debt for the rest of my life!

My Philosophy

I have never considered credit cards as an option. I think this is a true testament to what is possible with a particular mindset. Only because of my commitment to avoiding credit cards have I managed to avoid consumer debt. It’s also been a helpful way for me to get good at saying “no”. I would say I’m a professional at saying no due to the amount of times I’ve declined cards at retail stores. 🙂

If you take nothing else away from this post, take away the idea that being committed to something and having the right mindset can change your entire life.

If a spender like me who loves J. Crew can go through life without a single credit card, then anything is possible. 🙂

P.s. For those of you with kids, I encourage you to brainwash your children. I’m serious. 🙂 I was told from a young age that I would go to professional school after college – either medical school or law school, and I was also told not to use credit cards. I’m a lawyer; my brother is a doctor; and I don’t use credit cards. This didn’t happen by accident. 🙂  

Natalie Bacon blogs over at Financegirl, where she writes about finance and intentional living for young professional women. You can find her around the web on Facebook, Twitter, Pinterest, and Bloglovin.
There are two main reasons why I’ve never had a credit card that stem from my past: 1) my grandpa told me not to, and 2) I’m a spender and do not believe I would consistently pay off my credit card every month. http://catherinealford.com/2014/09/16/never-had-a-credit-card/
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72 responses to “I’m 28, and I’ve Never Had a Credit Card. Ever.

  1. Knowing your proclivities is 3/4 of the battle. Way to go!

    Traveling a lot, it would be hard on me to not have a credit card. The rewards points, yes, but also the ability to soak up all of the hotel authorizations! I’d hate for those to be reserving my actual cash, rather than credit card limit room!

    1. I use my debit card as credit for hotels so I can access things, such as wifi (if I have to pay for it), and usually, they require a “credit card” – but like a said, the debit card works for me in this way. I don’t travel a lot so I’m not sure if I’m missing out on other things, but so far using my debit card as credit works.

  2. Huh, this is super interesting. I guess with a debit card, you pretty much have the biggest reason I use a credit card which is sheer convenience of not having to carry around cash. But at the same time, there’s a small part of me that’s incredulous! Maybe it’s the consumerist brain-washing I’ve been given. But good on you Natalie and good luck with the law school loans!

  3. Maybe a weird take home from the article, but I agree about “brainwashing”. Expectations (like college) that were set forth when I was young, I never questioned and you see the results today. Unfortunately, almost none of those things related to money.

  4. I’d be losing out on $400-750 a year in cash-back if I didn’t use my card for everything.

    And if you’ve never had to dispute a charge on your debit-visa, you may be surprised to find out it can take up to 120 days to get your money back into your account.

    1. Actually, I’ve had to deal with issues before and gone through Chase instead of Visa and they’ve been incredibly impressive (same week) – so I have no personal complaints. I also am very good about checking my accounts and I have a free credit monitoring service for the next year on top of it. I could see how it could be more difficult with other companies though. Especially if you don’t have access to a good about of liquid money before sorting it all out.

  5. I remember before, my father always told me that I should not use a credit card but use cash instead. Until when I went to college, I didn’t forget it and honestly, until now, I don’t even own a credit card, but I only have a prepaid card aside from using cash.

  6. It’s rare to find someone at a young age who figured out that credit cards weren’t for them. Credit cards can of course be a tool if used wisely, but you admit that you’re not quite ready for it at the moment which sets you apart. Great job on killing the student loans so far and building a positive credit score Natalie 🙂

    1. Thanks, Kassandra! 🙂 I know people who are so good with credit cards and others who are just not. I’m glad I figured out that I would not be good with them without having to make any big mistakes.

  7. I think you are very wise to acknowledge your propensity to spend and avoid cards! That takes some serious introspection and commitment–congrats! Mr. FW and I do use credit cards (for the rewards) and we’ve never missed payment. Cards work well for us, but I totally agree with you that they’re not for everyone. Thanks for sharing this!

    1. You’re the type of person I wish I could be like! 🙂 But I am so glad I can be honest with myself and know that it’s just not the case. I loved reading about your personal story this week, too!

  8. I’ve had to relearn this lesson…..my wife and I racked up $109,000 of credit card debt and paid it all off through the help of a debt management plan. Credit cards are evil I said…..then we finished our program and I saw people earning points and rewards with their credit cards. Maybe I could do that, I thought. So we tried…..planning to pay the balance in full each month. It’s not working out so hot – time to go back to “credit cards are evil.” 🙂

  9. I’m so glad you were able to pay off your debt! And I hear people talk about their success with credit cards all the time. But I try to remember what Dave Ramsey said on an episode I listened to once: “No millionaire ever got rich from credit cards”. His point being that while you may get some good rewards, you’re really not missing out on getting ahead financially. This helps me feel less bad about passing up on the rewards.

  10. I think it’s great you now yourself and your propensity to spend. Not everyone even has that kind of self control. I go back and forth with credit cards. For the most part it’s been good because I’ve traveled free or frugally by using cards (I wouldn’t have been able to get home to Detroit in Oct without it). That being said you really have to be on top of things and make sure you have the cash to cover it. So far, so good.

  11. It’s mostly important to know yourself and if you know you’re a spender then it’s good to take away the temptation. I will say, I strongly disagree with a lot that comes out of Dave Ramsey’s mouth and that debt line is included. Debt is always an option: student loans, credit cards, personal loans — but I’ve managed to avoid debt my whole life (and I got a credit card at 18). I don’t churn them, just use them to build credit because I have no other means to establish my credit history. The points are an added perk. I do agree with Dave’s millionaire line, but plenty of millionaires still use credit cards and aren’t in debt…

    I’m curious, how do you plan to keep your excellent credit score once the student loans are paid off? Or are you just assuming that will take ages and by the time it happens you’ll have a mortgage or some other installment loan?

  12. Wow! I’m a huge Dave fan, so we’re definitely on opposite sides of the coin here, but that makes for an interesting discussion. I hope to have my loans paid off as soon as possible – most certainly under 10 years (hopefully more like 5). After they’re paid off, I’m not sure how I’ll keep one line of credit open – it depends on my current savings (i.e. how much I will need to rely on a credit score) and whether I have or plan to have any other installment loans, or a mortgage. I want to stay debt free, except for a mortgage. But, I have at least 5 years to think about it… I know that my propensity to spend outweighs having a credit card, so that’s just not an option for me. I’m glad you’ve stayed out of debt! And it seems like you live a debt free life and use credit cards appropriately. I think that’s the main point – you have to know yourself. I’ve never been in that situation where I needed a credit card for an open line of credit (b/c of my student loans), so that just hasn’t been my personal story.

  13. I wish I was brainwashed as well! I’m actually pretty good with credit cards now. I make sure I pay them off every month and have been able to collect the rewards. But I don’t recommend credit cards to those that can’t keep it together, which is a lot of people. You are living proof that we don’t need credit cards.

  14. The only reason that I might reconsider is that a credit card will provide input into your credit score. If you get a credit card, make one charge per month, then go home and pay it, you’ll be building a credit history and you’ll be adhearing to your no credit card debt mantra. Without this, you could actually find that someday when you want to get a mortgage or car loan or something else, that you’ll have a lower credit score and end up paying a higher rate than if you had a credit card that showed a positive history of paying off regularly.

    If you really don’t trust yourself, get a card and immediately request the limit be lowered from what they might initially approve you for.

  15. How do you do things like rent a car or book a hotel with a security deposit?
    My grandparents didn’t have one for awhile and my parents ended up having to make a few bookings for them, until my Mom convinced my grandma that they really did need one for these types of things. Another example was renting yard equipment.
    Heck, I had to leave one on a $10 snorkel rental a few months ago.

    1. I use my debit card, which functions exactly like a credit card in my experience. I always use my Chase debit card as credit, and it works perfectly for hotels or renting a car. You just have to make sure you have enough in your account because with those things, they’ll put a hold on more funds until you’ve returned the car or checked out. If you ask ahead of time, they’ll tell you exactly how much.

        1. Anne, I have a Visa Debit card from CIBC which in Canada, 9/10 goes through the interact network but we’ve used our cards internationally over the Visa network. I know RBC has a similar debit card option as well.

  16. There are some perks in having a credit card vs. just a debt card, but I really do wish I did not get into my credit card mess when I was still starting out and have no clue how it actually worked. Now I am paying the price.

  17. I think you’re playing your cards wisely here Natalie. It’s all about doing what’s best for you. We personally use credit cards. Never missed a payment or racked up debt, but we aren’t crazy about shopping.

    1. I think that’s the most important point, too. It depends on the person. Clearly, my way is not the way for everyone. And glad to hear they work for you – hopefully you get some good perks with them, too!

  18. A great discussion. I sure wish someone would have brainwashed me about the evils of credit cards! We are in the home stretch of paying off $109k of debt. It is something we are ingraining into our 3 children’s heads. We do not want them to repeat the mistakes we have made.

  19. Good for you for resisting ccs in a blogosphere that is bent on promoting them! I was quite nervous about using credit cards for a number of years because I thought they would allow me to overspend as well, though eventually I learned to trust myself. (Not to say that you should have the same path!) Great point about building credit through student loans instead of revolving debt. I’m kind of using the reverse argument for not getting any installment loans aside from my student loan debt (which will be paid off soon) as we gear up for qualifying for a mortgage.

  20. I think it’s awesome you know yourself well enough to realize that credit cards could spell disaster for you. Everyone’s situation is different. It’s great that you’re able to build credit with your student loans, so you don’t have to worry about it. My boyfriend doesn’t have a credit card; he also uses his debit card. I’ll have to ask him if anyone told him not to get one when he was younger! He has had a car loan and still has student loans, so he does have a credit history at least.

    1. Yea, as long as you have one thing showing up on your credit report, you should be in good shape. Sounds like your boyfriend’s car loan and student loans do that for him. I don’t know anyone else who doesn’t have a credit card, so it’s nice to hear I’m not alone 🙂

  21. I’m 35 and never had a credit card. Oh, wait, WILL NEVER HAVE ONE.

    Just as you mentioned, I’d probably fall ‘victim’ to the ‘pay later’ thing and end up in huge debt. I know my limits, better off this way. I also try to save money for what I need or look for some cool deals. Sure, I’m giving up many rewards, but it’s safer this way

  22. This is awesome. I can’t believe you never had a credit card, but to be honest, now knowing what I know, I wish I never had one either. Once these bad boys are paid off you better bet they will be being left in a shoe box in the closet.

    1. I’m glad you’re paying them off and know you’ll be putting them away! I feel your pain, even though I haven’t personally experienced credit card debt, I know what it’s like to be drowning. I cannot wait to say goodbye to Sallie Mae forever.

  23. You must have had a deep respect for your grandfather to have taken his advice so readily. I cut my credit card a few months ago, and I don’t think that I’ll ever go back to using one. I live in Canada where VISA debit has only started to be used for online payments and purchases. Most business haven’t updated their methods of purchase to accept VISA debit, so it is annoying from time to time. But I’m sue more and more business will get on board.
    Our debt is at about the same amount as yours, but we’ve got more than 2 decades on you. Good for you – getting rid of that debt at a young age! All the best as you bring it down to ZERO.

    1. Thanks for your encouragement! And thanks for sharing your experience in Canada. I didn’t know about VISA not being used as a debit card more widely. It’s interesting how different it is and we’re so close to each other!

  24. I only had my credit card when I was 27 and married, kinda late. Though I don’t regret getting one, I still would prefer not to have one. The temptation is really there especially when shopping! But, I know it’s about the knowing what really matters. Still working on how to manage it better.

  25. Good for you on not having any CC! You are not missing that much on the ‘rewards’. In fact, in the long term those ‘rewards’ will not make you a millionaire. Playing with CC debt is like playing with a snake. Eventually you’ll be bitten (I’m a snake fan and haven’t been bitten…yet. 🙂 ).

    I use a debit card exclusively for the most part and have never had an issue with fraud, money not being put back in my account, etc. In fact I think my bank is more on top of potential debit card fraud than CC fraud.

    Now crank on those student loans! 🙂

  26. I’ve seen a few PF bloggers such as yourself, Natalie, who admit that credit cards are just not for them. I certainly respect when people acknowledge this. I put it in the same category like when people say they don’t want to have kids. When people say “Credit cards are evil” I like to think they mean “Credit cards are evil for me” same way people who say they don’t want kids are not saying “kids are not good” they mean “kids are not good for them.” I use credit cards for everything, because of the cash back rewards (I get 4% on gas and groceries). If there were no rewards I would probably go the debit route, as there would be no incentive for me. But I am okay using a credit card because contrary to popular belief based on past spending habits, apparently I do have a spending on/off switch and I’m happy to say it is permanently off and desires for minimalism help support this. Congrats on your progress, Nat! I’m keenly watching your journey because we both have big amounts of debt and it’s comforting to support each other! 🙂

  27. Loved this post, especially the note at the bottom that you should brainwash your kids. That was funny 🙂 But seriously, good for you for recognizing that you can’t be responsible with a credit card and avoiding getting one. That’s a great thing to realize and it takes even more will power to avoid giving in to peer pressue and temptation.

  28. I always love it when I meet people who don’t have credit cards. Even though I love the reward points and the travel hacking perks, it’s perfectly possible to live without one and for some people, it’s just too tempting to live with one.

  29. I think everyone needs to find something that works for them and stick to it. Personal finances are different for everyone and if you find something that makes you succeed with what you are doing you should exploit it as much as possible. Find what works and go for it. It may or may not work for everyone but it doesn’t matter because it works for you. Thanks for sharing your success.

  30. That’s awesome! You know what works for you! I was 16 when my mom gave me a card linked to her account for emergencies. She was very clear what it should be used for, in case I decided to go on a shopping spree (which I never did!). I eventually got my own at 21 but have always made it a point to pay it off every month. I treat it just like a debit card, with the added bonus of reward points. Otherwise, I could get myself in alot of trouble!

  31. I”m kinda the same as you in that I don’t use a credit card for any day to day spending. It all goes on the debit card so I can only spend what I have in cash.
    However, I do have a credit card for traveling overseas because it doesn’t charge me any transaction fees or currency change fees – it saves me heaps when I travel. But it only goes in my wallet when I’m getting on the plane, and the rest of the time lives in that ‘special place’.

  32. I have always been taught that credit cards are for emergency use only, and I’m glad that I’ve been brainwashed too. $200k+ in student loans is scary, but you don’t seem to be fazed by it. Maybe because you’re a lawyer and you know you’ll be able to pay it back? How long do you think it will take before you’re debt free?

  33. I love ur story… I am a lot like u in the sence I am 26 and I have never had a credit card.. I have a problem though I want a credit card to build my credit. I am the type I would use it like my bank card and only spend what I can pay I wouldn’t go into “debt” with it. Just something to help build my credit buut I’m never able to get approved for one Like not evening a Walmart credit cars or jcp credit card. Its ridiculous… Even though I have a decent credit score they say it cause I don’t have enough credit history and I’m baffled about how to build my credit if no one will take “a chance ” on me and let me prove em wron . Any suggestions??

    1. There are a lot of starter cards designed specifically for your first credit card. I recommend googling around to find one. I had one in grad school with just a $200 limit.

  34. I don’t have credit cards, have student loans and a home……use debit for air travel, hotels, everything….guess what? my credit is not high because I don’t have a credit card…that is what I was told…my student loans should be enough, plus owning a home… my car is paid off…..what gives? I think there is more to this credit game than we know…..I was told that your address actually affects your credit rating as well…if you are from a certain part, your credit does not take a dive when you have more debt…..go figure…..I wouldn’t be surprised….

    1. Are you making regular student loan payments? You can look on the Experian website to see the breakdown of your credit score. I’ve never heard of an address being factored into your score, but there are a few categories that affect it.

  35. I have not read all the comments yet but I have heard about Pre-paid credit cards that can be used to make online transactions as well as book hotels, rent cars etc., but downside is that it doesn’t help on credit score or rewards programs. But I think its really helpful. I am getting rid of my credits cards with your advise and hope to switch to the pre-paid option soon.

  36. I am a 21-year old college student and came across this blog and it made me feel so much better! I do not have a credit card, but have been building credit through the payment of utilities on my rented apartment… Everyone is shocked when I tell them I don’t have a credit card and my father is telling me I’m gonna be screwed in the future if I don’t get one. To add to that, I’m gonna be $120K in student loan debt. This thought terrifies me, and the thought of getting into more possible debt makes me nauseous. I’ve been looking into first credit card possibilities, but have been hesitant to make a final decision. This blog is making me second guess getting a credit card now. But, I know I pay my bills every month on time… I would only use the credit card for monthly bills and connect it to my debit card. Probably wouldn’t carry it around in my wallet due to temptation. This has been causing me so much stress, I would love to hear your input.

  37. My mom brainwashed me as well. Once I was old enough to know what a credit card was she told me just how important it is to pay my balance in full every single month. I can’t even begin to count the number of times she told me how important it was to never miss a payment or make a late payment.

    So by the time I felt that I was ready (three years ago) I was already armed with the most important information regarding credit cards. Her adviced has served me well because I’ve never missed a single payment and I’ve always paid in full at the end of every single month. I even got a credit line increase that I did not ask for.

    That being said I know that credit cards are not for everyone. The important thing is that you know yourself better then anyone else does. I applaud you for making the responsible choice of not getting a credit card when you know you’re going to fall into debt.

  38. I just turned 28, and I never had a credit card too. Just like you, I use my trusty debit card for purchases requiring MasterCard. I remember I was offered a credit card two years ago, which I declined. Last week, I applied for a credit card – I’m after the perks but guess what? My application was denied! Probably a sign that credit card isn’t really for me.

    1. That’s interesting – It’s probably because you have no credit history so if you do want one, it would have to be a small credit builder card.

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