The front page of Yahoo! grabbed my attention with a story titled “10 Reasons I’m Cancelling My Credit Cards,” a story which I was uncommonly thrilled to see. It’s not often that a piece featured on Yahoo! makes me applaud the author, especially when it is drawn from the personal finance section, but this is rare example of meaningful, forward-thinking advice being offered in a mainstream outlet, despite being against the so-called common wisdom.
Most of the reasons that Brett Arends cites for his recent transition to an all-cash lifestyle are completely obvious to me. Even so, they are evidently not considered by a great many other people, so this may actually provoke a bit of thought from a handful of people who have never considered the matter. The views of the vast majority of Americans seem to be dead-set against my financial lifestyle, and are better represented by my mother, who regularly chided me during my teens and early twenties for not having credit cards, insisting that I needed to sign up for some, and use them, and thus establish credit for myself. The reason being, evidently, that simply not having credit would damage my rating and limit my access to credit in the future.
That never made much sense to me. Why would I need to improve my access to a convenience that I never use, and never intend to? Now, I’m not naïve. I have come to realize that there are ways in which the system is designed to add difficulty to your life if you don’t have credit, even if you never desire to own a credit card. There’s a limit to what they can do to push me in that direction, however, and so far I haven’t come up against any of the agitations that I know are lurking out there. Even if I do, I intend to stand my ground, because the convenience of credit cards can never outweigh the benefits of using only cash, and because my cash-only lifestyle is not just a rational choice, but a matter of principle.
Incidentally, the whole idea of good credit is now a moot point for me, as my outrageous student loan debt will prevent me from having good credit for as long as a live. I don’t believe in credit, and I really never have. I had resolved never to spend money that I don’t have before that was really an option. But I compromised on that principle once in order to take out a batch of student loans, because that was presented as a kind of debt that was necessary and could very easily be paid off. As terrible and defeating as the effect of that sole compromise has been, nothing could have done more to convince me of the correctness of my ideological stance against credit.
Arends points out that cash makes you spend less, that it limits impulse purchases, and that it makes budgeting easy. Of course, of course, and of course. I avoid using even my debit card to whatever extent possible. Many times I have explained that I respond differently to the idea of spending money if it is the form of paper and coins, as opposed to coming through plastic. When I hand over a twenty dollar bill for something, I am acutely aware of the fact that that money is leaving my possession. I can look into my now-lighter wallet and know that I am out that much money. If the funds are drawn directly out of my bank, there is no sense of severance, no psychological accounting of what has gone and what remains.
And as to budgeting, yes, nothing could be simpler if you spend no more than what you actually have. My ex-girlfriends parents kept a very detailed monthly budget. I saw them at times pouring over the computer spreadsheets, adjusting numbers, consulting with each other on what they could afford. I never understood that, and indeed I never understood the notion of budgeting even as an abstract concept. Advice on budgeting strategies is the sort of thing that you expect to see on Yahoo! Finance, not this fellow Arends confessing that he is just not organized enough for it, and speculating that many others aren’t, either. That was never the problem for me, however. My feeling is just that it seems unnecessary and wasteful. I feel that if you’re really financially responsible, you know what you have and what you can spend, and that is that. At present, I am in a situation wherein I’m not sure whether I’m going to meet the demands of rent and utility payments at the end of any given month. But even with finances tight as a noose, a budget is meaningless to me because I know what I need to earn to keep myself afloat, and as soon as I do so, I pay it out, and if anything is left over, that’s what I’ve got for food. It’s an incredibly simple formula, and I don’t see why anyone complicates it with interest rates and outstanding balances. It is truly heartening to see at least one other person advocating it.
But what’s most inspiring of all is the impetus for Brett Arends’ transition. He points out that increasingly many merchants don’t accept cash at all, and actually insist on credit card transactions, and he sees this as discomforting, which I think is clearly the right perspective. Now there is news that the Treasury is printing fewer dollars in response to the prominence of plastic, and Arends points to this as the last straw, which has brought him to the breaking point whereby he has abandoned credit altogether, in favor of a diet of real, material cash. I earnestly hope that others make a similar decision.
Even if you have an ideological perspective quite unlike mine, even if you deeply appreciate your line of credit, I hope that you’ll bristle at the notion that there are places where hard currency is simply no longer accepted. At any given transaction, your credit card may be a convenience for you personally, but in general, as a social phenomenon, as a corporate policy, the exclusive emphasis on credit as a form of payment is a convenience only for banks, credit card companies, and retail executives. As long as your chosen method of payment keeps you in debt, you run the risk of having it become a terrible, disastrous inconvenience to you sometime down the line. Even if you don’t believe me now, what happens if you change your mind in the future, but the use of cash is no longer an option?