Did anybody here retire with no credit cards? How is it working out so far for you?

[retire48in2018]

People do choose to use CC for the points/miles/etc that they believe help their quality of life.

I am at peace not participating in that. Our life is simpler (for us) and more at peace (for us). Those perks are not worth it for us.

My point to post - is that there are pros/cons each way - and there are options with/without a CC/Debts. It is personal finance, and personal choices. There are no absolute rules/limits either way. I was posting as some were misinformed about perceived severe limitations (rental cars, hotel booking, airline booking, insurance, perceived differences in liability, etc).

It is certainly easier, and more "normal" to participate with debt.

Hopefully, there is at least awareness that it is a choice - not a necessity (either way).

I am not asking you to agree to give up what you believe that you manage and get perks for. I am asking that you have an open mind to consider that others can choose differently that have a different risk/benefit/peace matrix than you have; and that there is some misinformation about the necessity.

"Even a pancake has two sides"

 

[Nemo2]

Since we pay or CCs in full prior to the due dates, (as soon as the monthly statements are available online), we don't (personally) consider current balances 'debt'.

 

[SecondCor521]

It is personal finance, and personal choices. There are no absolute rules/limits either way.

Well sure. Except for paying off the mortgage and when to take Social Security. Those are both topics on which everyone here agrees with me.



(I agree with your post, BTW. )

 

[CardsFan]

Well sure. Except for paying off the mortgage and when to take Social Security. Those are both topics on which everyone here agrees with me.



(I agree with your post, BTW. )

 

[Dtail]

Since we pay or CCs in full prior to the due dates, (as soon as the monthly statements are available online), we don't (personally) consider current balances 'debt'.

Same here.
I could see others not wanting to participate in CC's, just like many don't wish to chase yields.
I use 5 CC's and manage 3 of them to 5.25% discounts/2,500 quarterly limits.
There is some work, but worth it to me to the tune of $2,700 in cash back so far this year.

 

[jazz4cash]

Since we pay or CCs in full prior to the due dates, (as soon as the monthly statements are available online), we don't (personally) consider current balances 'debt'.

Does paying early keep those balances from affecting your credit score?

RI pay mine a day or two before the due date to benefit from the float. As far as I know all statement balances do affect credit score calculation FWIW. I firmly believe credit scoring is a scam but we’re pretty much stuck with it.

 

[Nemo2]

Does paying early keep those balances from affecting your credit score?

RI pay mine a day or two before the due date to benefit from the float. As far as I know all statement balances do affect credit score calculation FWIW. I firmly believe credit scoring is a scam but we’re pretty much stuck with it.

Sorry, no idea about credit scores - we don't take out loans and have no idea what rating(s) we might have.

We only pay our credit cards off as soon as it's possible because the balance in that account doesn't accumulate interest, so why not?

A couple/few years ago Visa arbitrarily raised our limit without consulting us - we contacted them and told them to lower it again, post haste.

 

[Dtail]

Does paying early keep those balances from affecting your credit score?

RI pay mine a day or two before the due date to benefit from the float. As far as I know all statement balances do affect credit score calculation FWIW. I firmly believe credit scoring is a scam but we’re pretty much stuck with it.

I pay off my balances each month on the 1st of the month. My cycle runs from the 4th to the 4th each month.
Thus there is only 4 days of debt sent to the credit agencies each month.

Effectively paying it off each month for me and paying it off near the cycle end keeps the credit scores at higher levels.

If one has no credit used reported to the agencies, I believe that the credit score is a little lower, thus a little debt reported is good.

 

[WestUniversity]

No. In fact I got a couple of additional cards before I retired. Figured it would be easier to get them pre retirement...

 

[SecondCor521]

Does paying early keep those balances from affecting your credit score?

I pay mine a day or two before the due date to benefit from the float. As far as I know all statement balances do affect credit score calculation FWIW. I firmly believe credit scoring is a scam but we’re pretty much stuck with it.

As Dtail points out, having zero reported credit utilization is actually worse from a scoring point of view than if you have 1% to 10% total utilization, as long as you don't have more than 50% utilization on any given credit card.

It seems backwards that that is how the algorithm works, but that is what happens with my score, and what Credit Karma shows when they discuss utilization as a score factor.

I don't particularly care about my score nowadays, but I do check it regularly to see if any fraud has happened. As far as cards go, I try to set them all up to autopay the statement balance on the due date, which is what I find is easiest.

 

[ownyourfuture]

Up until one year before I retired, (2014) I only had one credit card, and only used it for big ticket items. New tires on the car, new refrigerator, etc.
Used cash for 99.00% of my 'daily' transactions.

Five years later, I've come full circle. I have 4
One pays back 4.00% for dining out, another pays 3.00% on groceries, another pays 3.00% on fuel, & another pays 2.00% on everything else.

 

[ownyourfuture]

Last year I got $850 in cash back total and at least another $150 in other benefits. It would be foolish to leave free money on the table.
...and yup, I do pay it off each month unless I got a new card that gives me zero interest on purchases. Free loans - free money - what's not to like?

Agreed. In the rolling 12 months, ending on October 1st, I'll have received approximately $1600.00 in rewards.........all cash.
It won't be nearly as much in the following 12 months though, as $400.00 was a special promotion from capital one, & $150.00 from Bank Of America.

Like you said, it's almost like free money. As an added bonus, when I use my AMEX (3.00%) at Hy-Vee when I buy my groceries, if I shop on Monday or Tuesday, I get a senior discount (55+) of another 5.00%

 

[jazz4cash]

Yeah I think we really don’t know the details of what’s reported to the credit bureaus. I pay my cc balances in full each month but the free credit monitoring I get from Chase appears to reflect the statement balance anyway. Credit scores are near the max so it doesn’t seem to matter and it’s really just a scam anyway IMHO. Even though I try not to care I peek at our scores frequently in the course of monitoring unauthorized activity.

 

[Dtail]

Yeah I think we really don’t know the details of what’s reported to the credit bureaus. I pay my cc balances in full each month but the free credit monitoring I get from Chase appears to reflect the statement balance anyway. Credit scores are near the max so it doesn’t seem to matter and it’s really just a scam anyway IMHO. Even though I try not to care I peek at our scores frequently in the course of monitoring unauthorized activity.

You can see easily using Credit Karma as an example what gets reported to the credit agencies in terms of credit card debt, but I hear ya.

 

[GTFan]

People do choose to use CC for the points/miles/etc that they believe help their quality of life.

I am at peace not participating in that. Our life is simpler (for us) and more at peace (for us). Those perks are not worth it for us.

My point to post - is that there are pros/cons each way - and there are options with/without a CC/Debts. It is personal finance, and personal choices. There are no absolute rules/limits either way. I was posting as some were misinformed about perceived severe limitations (rental cars, hotel booking, airline booking, insurance, perceived differences in liability, etc).

It is certainly easier, and more "normal" to participate with debt.

Hopefully, there is at least awareness that it is a choice - not a necessity (either way).

I am not asking you to agree to give up what you believe that you manage and get perks for. I am asking that you have an open mind to consider that others can choose differently that have a different risk/benefit/peace matrix than you have; and that there is some misinformation about the necessity.

"Even a pancake has two sides"

What you're doing is fine for you, but there are so many negatives to not using credit that it certainly doesn't apply to the majority here. If you're on this forum, generally speaking, credit usage and concerns thereof are not a factor for ER and in fact are used by many to enhance ER. There's lots of ways to get free travel with CCs, for example, simply by exploiting bonuses. And you never have to worry about the limitations that come with not having a good credit score (insurance cost being the main one as pointed out here), nor with large sums being fraudulently deducted from your checking accounts which you then have to fight to get back.

Sticking with cash/debit cards is a hindrance to most folks, in other words, regardless of rewards money left on the table. There are way more cons to not using credit than there are pros to being cash-based. Of course if you can't manage your spending then you certainly have a responsibility to not use credit, but I don't think you'd be here reading this anyway.

So in your case (and anyone else's ignoring the benefits of credit), I'd say it's a bodacious YMMV.

 

[jazz4cash]

You can see easily using Credit Karma as an example what gets reported to the credit agencies in terms of credit card debt, but I hear ya.

Call me paranoid but how do I really know that what I see for free is the same as what merchants see when they pay for it? All part of the game.

 

[jazz4cash]

All these “free” perks....Cashback, points, travel, etc......who actually pays for these? TANSTAAFL. I believe everybody pays so if you are not taking advantage of the perk you are paying more to subsidize others. THANK YOU!!!

 

[jimbee]

People do choose to use CC for the points/miles/etc that they believe help their quality of life.

I am at peace not participating in that. Our life is simpler (for us) and more at peace (for us). Those perks are not worth it for us.

My point to post - is that there are pros/cons each way - and there are options with/without a CC/Debts. It is personal finance, and personal choices. There are no absolute rules/limits either way. I was posting as some were misinformed about perceived severe limitations (rental cars, hotel booking, airline booking, insurance, perceived differences in liability, etc).

It is certainly easier, and more "normal" to participate with debt.

Hopefully, there is at least awareness that it is a choice - not a necessity (either way).

I am not asking you to agree to give up what you believe that you manage and get perks for. I am asking that you have an open mind to consider that others can choose differently that have a different risk/benefit/peace matrix than you have; and that there is some misinformation about the necessity.

"Even a pancake has two sides"

What are the cons to cash-back credit card use?

 

[VanWinkle]

I use CC to my advantage, I get about $600 cash back every year and don't even pay 1 cent interest.

+1 Why give up the extra income from rewards.

 

[ERD50]

People do choose to use CC for the points/miles/etc that they believe help their quality of life.

I am at peace not participating in that. Our life is simpler (for us) and more at peace (for us). Those perks are not worth it for us.

My point to post - is that there are pros/cons each way - and there are options with/without a CC/Debts. It is personal finance, and personal choices. There are no absolute rules/limits either way. I was posting as some were misinformed about perceived severe limitations (rental cars, hotel booking, airline booking, insurance, perceived differences in liability, etc).

It is certainly easier, and more "normal" to participate with debt.

Hopefully, there is at least awareness that it is a choice - not a necessity (either way).

I am not asking you to agree to give up what you believe that you manage and get perks for. I am asking that you have an open mind to consider that others can choose differently that have a different risk/benefit/peace matrix than you have; and that there is some misinformation about the necessity.

"Even a pancake has two sides"

What are the cons to cash-back credit card use?

I'm with jimbee, what the heck is complicated about getting cash back on almost everything I purchase? It's among the easiest money I've made.

Your choice, but it sure sounds like some twisted rationalization to me.

If you don't believe that a little extra money improves quality of life, feel free to send a little extra my way.

-ERD50

 

[MichaelB]

Some people find it easier to manage their cashflow and spending with cash instead of cards. It's a perfectly fine way to manage one's financial affairs.

 

[Louis2]

Just a little devil's advocate here. Credit card use is so embedded in our lives now that it is very difficult to avoid. But there is nothing "free" about any of the perks. The extra costs and fees imbedded in everything you buy is what pays for your perks. Debit cards are regulated and can only charge fees up to a certain amount, but credit card companies make very high profits. I apologize for not being able to quote the source, but I read that credit cards make comparatively little of their money off the high interest that most ER people avoid. The make much more off the 1-5% fees that every retailer tacks on to every purchase.

I'm sure some small business owners here can add more accuracy to what I am saying.

(Disclaimer: I am every bit as attached to my credit cards as the other posters here!)

 

[Louis2]

But not using your cards doesn't save you any of those costs since they are baked into the prices!

 

[kgtest]

My grocery store has Milk for 1.99 a half Gallon, right next to the Milk $4.50 Gallons.

It's fun to watch people grab the gallons... apparently saving .50c isn't worth having 2 smaller containers? That's the only rationale I've come to.

My ole man was like jimbee, now I'm fairly certain he's scored more cash back than I have with his cards rewards. Buuut, there are always those folks who just have to have the 1gallon jug of milk, because that is that.

 

[GTFan]

All these “free” perks....Cashback, points, travel, etc......who actually pays for these? TANSTAAFL. I believe everybody pays so if you are not taking advantage of the perk you are paying more to subsidize others. THANK YOU!!!

Correct - everyone pays in the form of higher merchant prices given the trans fees involved.

Decent rules on CC usage below, Clark is a great resource. Don't think it will be new to most here.

https://clark.com/credit-cards/clark-howard-credit-card-rules/