Why Not Having a Credit Card Gave Me More Financial Freedom

I hate the idea of debt.

Even as a child, I would curse under my breath while going to the neighborhood’s sari-sari stores when asked to buy goods on credit. Growing up, it was a necessary evil for us to survive on a daily basis.

It would be a hypocritical thing to say that I never once borrowed money for my personal use. Of course, I did, but I always make sure to pay it in full the soonest. This very rarely happens though because as I what I said, borrowing isn’t my thing.

Whenever I am offered the opportunity to take advantage of “free money”, I make it a habit to say “no”. Hence, the reason I didn’t apply for a credit card and instead chose the debt-free way of life.

Advantages of Credit Cards

Credit cards can be useful to build your credit and prove your creditworthiness to potential lenders. It also makes it a breeze for holders to make big purchases right away. Fraud protection, credit card rewards, roadside assistance, travel insurance, rental car insurance, extended warranty, and price protection are just a few perks you can get depending on the credit card you choose. But this only works if one is extremely responsible for paying their credit card bills on time and is disciplined enough not to max it out.

On the other hand, not using a credit card can also mean you will have an indeterminable credit history and you will possibly have a low credit score.

Despite all that, I personally don’t have any good reason at all to have a credit card.

Reasons for not Having a Credit Card

Like me, there are some people who feel credit cards give them the power of overspending. When we fail to pay back what we spend, our credits could tank and would be used as a weapon against us.

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Sure, your income can afford you to pay off your credit card bill each month for now. You might be wondering what’s really the big deal. However, even if you pay your bills on time, you are not beating the system. You are still going to pay thousands in interest as you carry your balance over the years. One or two missed payments and boom! You are kicked in the gut as your interest rate goes through the roof. You will eventually fall into the trap along the way.

Here are other reasons I don’t have a credit card:

I prefer living within my means

Credit cards give us opportunities we would never have otherwise. Credit cards can make me look like an Instagram star. It would allow me to buy luxurious things and make myself look fake-rich. However, that’s not my reality. The reality is that I make a modest living working at home. Although earning in a foreign currency, I do not want to give off the impression that I am rich simply because I am not. I prefer to live within my means. That means what I spend each month is less than or at least equal to the amount of money I bring in each month. Spending money I still don’t have doesn’t make me feel good.

I struggle with instant gratification

I just don’t trust myself with a credit card for the fear of overspending. There will always be the temptation of buying things I cannot afford. It’s difficult when you struggle with instant gratification. This means when I want something, I want it now. Instant gratification is the desire to experience pleasure or fulfillment without delay or deferment. Waiting is hard, but I have taught myself that if I want something, I have to earn it and save for it first. Though it is easier said than done, I am actually getting good at it.

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I buy everything in cash

I buy things either with cash or debit card. Paying in cash enables me to only spend the money that I actually have. Seeing the money leaving my hand or my bank account funds dwindling with each debit card swipe is a stronger motivator for me to curb my spending and impulse buying.

My life isn’t affected by not having one

I stopped comparing myself to the Joneses (who are probably broke or in debt themselves). I know I will never win. Comparing ourselves to others, whether it is in social status, wealth, job stability or family life, breeds discontentment in our minds. It is a whole lot easier for me if I just stay true to myself. At least, I know I don’t owe anything to anyone and that’s a great confidence booster.

The most common reason people apply for a credit card is that they believe they can’t buy a house without having one. It’s bull—. I don’t buy it. Although I will be facing challenges when applying for a home loan in the future, I have accepted the fact that I just have to save up a large amount of money for equity. There are multiple ways to secure a mortgage without having a high credit score, like having money in the bank, stable income, and your ability in paying your utilities or other smaller loans on time.

Building Your Wealth, Debt-Free

Having a high credit score just means we have interacted with debt a lot and we are good at paying it. It doesn’t necessarily mean that we are good at managing money and building our wealth. In reality, it only shows how we love debt and how we love paying interest on anything.

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Some people may react negatively to this post, usually those who are credit card holder themselves. Indeed, if you have the discipline and means to pay off your cards each and every month, you can reap a lot of benefits. However, credit cards are like alcohol. Some people can handle it, some people can’t.

But just imagine a life without debt. Just imagine what you could do if you had no payments, especially on your credit card bills or on any loans for that matter. Think about what you could do with all that money, every month. You could have big savings, you could save for a huge family trip abroad, you could save money for your child’s college education or get a retirement and investment fund all in one. The possibilities are endless when you choose a debt-free life.

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Nikkah of Get Financed Lab is a caffeine-fueled work-at-home ninja, hustling her way to financial independence before she turns 40. Like most millennial, she dabs on blogging, starting side-hustles, freelancing, and slaying the mommy life. This blog is her personal finance journey peppered with her words of wisdom, which should always be taken with a grain of salt.