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How Being A Credit Card Delinquent Saved Me Thousands of Dollars!

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The following is a guest post from Lyle, a self-employed guitar instructor, performer, web-designer and blogger. For the past twenty years, he has adopted the tenets of voluntary simplicity to live a thrift shop life and has recently began blogging with these concepts in mind at The Joy of Simple.

My First Credit Card

I received my first credit card back in the summer of 1979 at the ripe young age of 18. I had just started working at a new job and figured it was time to start building up a solid credit history. At least that was the plan. Secretly though, I think I just wanted to be able to buy stuff regardless if I had the money for it or not.

You see, prior to that fateful day, I was only able to make purchases if I had enough cash on me or was willing to save my money to buy those big ticket items I seemed to crave back then. With a credit card however, I no longer had to worry about such mundane measures as saving money for an item or two, or three. I could simply hand over my precious piece of plastic and my consuming needs and desires would instantly be taken care of. Chargex anyone!?

The Problem

Over the years to follow I became a spending machine. I could easily buy nearly anything I wanted and I was the life of the party. Dinners with friends, drinks at clubs with women whose names I hardly knew, trendy-ish clothes, even hair styles! If you could name it chances are I was charging it, even when those silly Credit Card company letters were arriving at my door asking me to stop. I mean, “yeah ok…I’m way past my credit limit, but hey, I’m paying the minimum every month so what’s the problem!?”

Turns out that the problem was that I was out of control and soon, so were my credit cards as the CC companies and associated banking institutions froze my cards, ordering me to bring them back to my bank branch for “disposal”. It was a most embarrassing endeavor to have a bank teller take scissors to my valued plastic money as she gave me a look of both sympathetic understanding and cold disdain!

Wash, Rinse, Repeat

Now I wish I could say that this only happened once and that I had learned a very valuable lesson, but sadly, I cannot.

Over the years – my supposedly adult and mature years – I fell into the same spending habits and scissor cutting results, no matter how good my intentions were at the beginning to do what was required of me. I was truly a credit card delinquent!

This was also compounded by the fact that my credit balances found their way to numerous collection agencies as I ended up not paying back the credit card companies. After all, if I couldn’t use their cards anymore, why bother paying them back. This was, and of course is the wrong attitude to have, but that’s how a credit card delinquent rolls!

In my defense, I did end up paying back what I owed, but let me tell you, I took my sweet time doing so.

How I Turned Things Around

So, by now you may be wondering, “ok, so how did you manage to save yourself thousands upon thousands of dollars?” I did it the old fashioned way, the way my mother did it and her mother before her, with good old cash!

I now pay for everything in cash, and if I need something that is more than I have to spend on that item, I simply save up my money until I have the amount needed. Anybody remember lay-away? I was the KING of lay-away 🙂

In all seriousness though, you would be surprised at how little you buy when faced with having to shell out hard earned cash money from your pocket or bank account. All of a sudden, the value of a dollar means so much more. The extra amount you might not have even thought twice about when putting something on credit all of a sudden becomes a mind-full concern, and rightly so!

The convenience and ease of credit card spending made me NOT question my spending habits until it was too late. If I had kept this up, I would literally have spent thousands of dollars easily over the years through unnecessary purchases and more importantly, high credit card interest rates, since I was in no financial position to pay the card’s balance off each month.

Me at 52

It has been over twenty years – I am now 52 – since I had a credit card and believe me, I do not miss it. I would hope that today’s me, would be more responsible, but really, do I want to take that chance? I have been able to do all that I want to do without the plastic. Surprisingly, my credit rating is fine, as I found out while looking for an apartment to rent a few years ago. And while I might have an issue applying for a bank loan or mortgage, these are financial activities that I do not ever see myself doing, so I have no worries in that department.

And when I do need a credit card, like if I need to purchase something online for my The Joy of Simple blog  or an Amazon gift item, I have a friend who graciously does it for me and I pay him back immediately…in cash!

So…can you live your life without incurring massive and ongoing credit card debt? Do you worry about becoming a credit card delinquent?

If so, then the obvious solution would be to ditch the credit cards and pay off your debt. Sounds simple, but as you probably already know, it is anything but simple.

If You Use Cards

Now I can hear what a lot of you are thinking: “But Lyle…what if I wanna keep them cards…you know…for emergencies and such? “

I hear ya!

One recommendation I would suggest is to hand over your credit card(s) to your spouse or a close and trusted friend for a week. Then take enough money from the bank that will cover your essentials like food, gas, and Friday’s Family Pizza and Video night.

As you go through the week, if there are any knee-jerk reactions to what could have been an impulse buy, make a note of it. If you ran out of cash and had to get more at the bank, make a note of it.

At the end of the week, you should have a decent idea of how life without a credit card feels.  Add up the amount of money you would have spent on credit were you able to make those impulse buys and unnecessary purchases.  Once you see those potential lost dollar amounts, how do you feel?

If it makes you feel good for not having used your credit card, try another week. If it makes you feel less in control of your finances, or really antsy because you weren’t able to “buy that thing you just had to have!” then maybe a visit to Dave Ramsey’s website is in order.  🙂

Seriously though, the idea here is to see if you can get through a few weeks just using the cash you have on hand. If you find that are seriously dependent on your credit card(s) and that you cannot really live life as you’re accustomed to on just your weekly or bi-monthly pay-check, then maybe it’s time to reevaluate the role of your credit card(s) vis-a-vis your overall pecuniary satisfaction and life happiness. Or not!

I realize that not everybody will turn out to be a credit card delinquent like I was, and that some of you, maybe even the majority of you are fiscally responsible in all areas of your financial life. But, if this post hits a little too close to home, you might want to rethink your credit card spending and work on cutting that card out of your life, before some bank teller does it for you.

Crystal’s Comments:  I use credit cards and pay them off every month (we only spend what we already have).  I like the cash back rewards.  Do you have a history with credit cards?

FYI:  I worked at a dead end cubicle job from 2005-2011 for about $30,000 per year.  I went self-employed in July 2011 and make between $70,000-$90,000 through blogging, professional pet sitting, hubby's reffing, and our rental home.  If you’d like to start your own site (link to my free step-by-step guide), I highly suggest checking out Bluehost (my referral link with a nice discount for you, PLUS a free custom header banner from me!).  Please contact me any time at budgetingfunstuff*at*gmail*dot*com with questions or just to brainstorm! I’d love to help!
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21 thoughts on “How Being A Credit Card Delinquent Saved Me Thousands of Dollars!

  1. Hi Crystal and thank you for the guest post opportunity 🙂

    I have a few friends who only use their cards for the reward points and like you, pay them off each month. There are definitely smart and responsible ways of using credit cards and wouldn’t it be nice if everyone was as responsible?!

    Take care and all the best.


  2. Good to know you managed to turn you life around Lyle. It’s important to exercise maximum restraint when you have a credit card, because the temptation to buy unnecessary things is always there. It’s not easy, but it can be done.

  3. I am considering closing 2 personal bank accounts, since I’m just paying the fees. I have started using more cash lately and it does prevent me from spending ‘the numbers’, since I can see the money leaving my wallet. I’ll get one personal account and the business account only.

    We don’t use credit cards (all are debit) and we also have zero overdraft on all accounts, so me using the ‘plastic’ is not such an issue, since I cannot spend more than the account has in it. Still right now I’m in a place where I start enjoying cash more.

  4. Hey Beat The 9 to 5 and thanks for the comment 🙂

    I hear ya loud and clear. They – credit cards – make it so dang easy to buy whatever, whenever. If I ever find myself with a credit card again, I hope that my spending will continue to be responsible and unfettered by consumer temptation!

    Take care and all the best.


  5. Hey dojo and thanks for the comment 🙂

    It sounds like you are fiscally responsible and I commend you on your use of a debit card rather than a credit card!

    Ans yes…I think going with just one personal account and one business account is the smart way to go. I mean seriously, the banks don’t need anymore of our hard earned money!

    Take care and all the best.


  6. We’re credit card users but “pay in full” folks at worst. I can’t stand owing people money, so most of the time I use them like debit cards w/ rewards (i.e. send them money and spend it down instead of charging up and paying in full.

    I’m pretty sure there’s a name for the condition that makes me send credit card companies extra money so I don’t “owe” them anything…

  7. Crystal, as we’ve discussed before I have a similar history to Lyle with the credit cards – the bank never asked me to return them, but I did have to get loans to pay them off (‘credit consolidation’) only to run them up again 🙁

    Just an update, I currently have ZERO credit cards in my wallet. I finally was able to follow your advice Crystal (except not about cutting them up – yet). I gave them to my husband for safekeeping, one by one. We’ve even paid two of them off completely in the last few months.

    It’s freaking scary having only $3 in your checking account until payday and LITERALLY no other available credit on you. BUT… it totally makes me think. For example, this morning I wanted McDonalds for breakfast. But I couldn’t buy it. MONEY SAVED!


  8. I got my first credit card at 17-but that was only 13 years ago. There was a stigma at the time, still today, that a credit card could ruin you.

    Did that stigma exist back them? My parents told me in the 70s whipping out a credit card was a kind of embarrassment haha. Now it’s the way a lot of people first start building their credit!

  9. Hey a terrible husband…and thanks for the comment 🙂

    Nice use of the credit card reward points!

    I’m sure there must be a “name” for folks like yourself, but if it’s coming from the credit card head office, I doubt it’s a flattering one 🙂 They would much rather you be like everyone else…debt up to your eyeballs and all!

    Take care and all the best.


  10. Hey Claire and thanks for the comment 🙂

    Congratulations on having Zero credit cards in your wallet!! As you are experiencing, it’s so easy to spend money without even thinking about it when you use a credit card. But when it comes to parting with actual physical cash from your pocket, wallet or handbag, that’s a different matter entirely. Good for you for being such a mindful consumer 🙂

    Take care and all the best.


  11. Hey Todd, thanks for the comment.

    I don’t remember there being a stigma using a credit card back in the seventies, but I do recall thinking it was the coolest thing to have and that it represented a certain success factor given that not everyone had, or was eligible for a credit card. I don’t remember the CC companies giving out their cards like candy as they do now.

    Thankfully, judging from the comments on this post, everyone is a responsible card holder and in control of how they use their credit cards :

    Take care and all the best


  12. I no longer use credit cards and don’t wish to ever again (even in a emergency)! That’s because I’m still paying for ‘stuff’ I bought 14 years ago on credit. Ugh. The only way I’m to repay all this is with pure hard cash. And once the debts are gone, I intend to live a more simple yet fulfilling life. 🙂

  13. Hey Hayley and great to see you over here at BFS 🙂

    “… I’m still paying for ‘stuff’ I bought 14 years ago on credit. Ugh…” – OUCH!! I have heard that if someone has racked up $5000.00 on a high interest credit card, that it takes roughly 35 years to pay it off in full if one is just paying the minimum payment each month. That’s crazy!!

    I’m sooo glad you have switched over to “pure hard cash”…your debts will soon be toast and your life will indeed be simplier and better for it!

    Take care and all the best.


  14. I remember the day my then teenaged daughter overspent her credit limit. The store’s computers were down so they didn’t tell her to stop buying now. Like she didn’t know she was buying more than she was entitled to do. 🙂

  15. Hi Linda and great to see you over here 🙂

    “Like she didn’t know she was buying more than she was entitled to do…” – Hmmmm…maybe she knew a teensy bit 🙂

    When I use to go over my limit, there were no computers, just those manual machines that used paper and carbon copy and imprinted the store info on the “bill”. Some stores used to call into the various credit card companies to verify or validate the information, but not all did…especially when it was busy! That was my cue to go overboard 🙂

    Take care and all the best.


  16. Another thing to watch like a hawk, and then descend and kill it like a hawk, is the “free upgrade” to your credit limit. Most of the good credit companies now give you a window in which to reply if you WANT the increase; otherwise, things will stay where they are. Used to be the other way around, it you didn’t tell them no, then they took it as a yes. (couple of lawsuits fixed that….)

    Also, roll back the limits so that it’s a fairly easy payoff if needed to clear the account.

    “Emergencies” are handled by making arrangement for a temporary increas (eg, accident).

    Anoth3er safe way of hiding the cards is to freeze a Tupperware container (BIG ONE — one litre capacity or more), half-full of water, insert cards, fill with more water and ensure that the cards are frozen in water. You have to melt all that water and you cna’t do that in a hurry. Sober second thought ….

  17. Hey Bruce and thanks for the great I comment!

    I have heard about the freezing of credit cards and love that idea. One really needs to consider whether or not it is worth it to thaw out the credit card. Great tips all around 🙂

    Take care and all the best.


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