Ideas For Living Without Credit Or Debt

Leo at Zen Habits has listed 10 ideas for living without a credit card or any debt.

Living without a credit card isn’t as difficult as you may think—in many cases a debit card will work just fine. (One must be aware, however, that debit cards do not offer the same level of protection as credit cards.)

If you’ve got a serious impulse control problem with credit cards you may want to consider giving them up.

Here are a few tips we liked and thought were useful whether or not you’re going to give up your credit cards:


Save an emergency fund.
Many people use their credit cards as a sort of emergency fund — if there’s an unexpected expense, the card comes out to the rescue.

Save for goals. Once you’ve got the emergency fund adequately covered, you can start saving for other things.

Get a debit card. If you need to use a credit card in certain situations, such as buying something online, often you can use a debit or check card instead, if it has the name of a major credit company such as Visa or Mastercard.

Earn interest instead of paying it. The problem with debt or credit is that you waste money paying interest.

Buy a car on cash. For those who have been buying vehicles with auto loans all their lives, it may seem impossible to buy a car on cash. But it’s very possible, and many people do it.

You can read the rest of the tips at Zen Habits. Keep in mind that the latter ones are for people who are going to live completely without credit or debt, which may not apply to very many of you. Still, the article has some interesting ideas. We’ve bought each and every one of our cars with cash and we’ve never regretted doing it. Sure, we had to drive a seriously lame Geo Metro hatchback during our college years—but we’ve never had to pay a car payment.

10 Ideas for Living a Life Without Credit or Debt [Zen Habits]
(Photo:lorenzhausleitner)

Comments

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  1. Buran says:

    What’s with the credit cards = bad thing?

    I’ll keep my fraud protection, thank you.

  2. FatLynn says:

    Every term, I put my tuition on my Discover card. By the time the bill cycle closes, my company has already reimbursed me, and I pay the amount in full. I get 1% back, and pay nothing for the privilege. That’s about $50/term.

    Please get out of the mindset that credit is inherently bad. I’d like to see how you plan to buy a home.

  3. BlueModred says:

    I was 20years old before I got my first credit card. I just wrote checks for everything and if I NEEDED plastic, I got a debit card.

  4. Please get out of the mindset that credit is inherently bad.

    @FatLynn: Where does it say that? In the original article the author begin’s with his father’s “recent financial turnaround”. If he can’t get a car loan or mortgage maybe he can’t get a credit card either.

  5. nweaver says:

    Debt is bad, but credit cards are GOOD.

    The fraud protection, both in the legal and in the practical aspects, are far better than checks and debit cards.

    Even if the credit card has only a $500 limit, as long as it doesn’t have an annual fee it is the way to go, as long as you pay your bill in full every month, and even the most deadbeat can get a secured credit card with that sort of limit (and a nonsecured card shortly theirafter)

  6. eirrom says:

    I’m with the others here regarding Credit = Bad? If handled correctly, there is really no downside to credit cards. Use the the money for the month and pay them off at the end of the month. Very simple. I do it each month. I build up my credit score (just over 800 as of last month) each time I pay the balance.

    I work for a finance company so I see the other side daily, with people who can’t even pay a $10/mo $300 credit limit credit card. It is a matter of self control.

  7. eirrom says:

    I with the other regarding Credit = Bad? Just have a little self control and pay the balance at the end of the month. It’s free money until the payment is due and it builds up your credit score, opening up other avenues such as cars, homes, etc.

    I work in finance, so I have seen the other side also. People who can’t handle a $10/mo $300 credit limit credit card. It is the person not the credit card. Quit blaming everyone but yourself when you handle credit wrong!

  8. myrall says:

    My husband and I lived without credit cards for over six years. The nicest part about this was that we only spent what we had and there was no nasty ‘after-Christmas’ credit card debt surprise waiting for us. If push came to shove and we really needed a credit card for a purchase, my mom would charge it to her card and we’d pay her cash for it – but that was rare.

    We finally caved and got cards when we realized that our credit scores would unfortunately look puny when we went house shopping. Our cards are pretty much relegated for major emergencies and major purchases necessitating some sort of fraud protection, etc. We didn’t think credit cards were bad – we just didn’t want the temptation (which my hubby and I had both succumbed to in the past).

  9. DjDynasty says:

    Credit cards are a bad thing if you don’t pay them back in full. I personally prefer my economics teachers advice from College. Get a credit card that pays cash back, pay it in full with every bill, use the cash back towards paying for your mortgage. It’s an great kick in the pants when the same bank holds all your loans :-)

    I pay 100% of my bills every month on my credit card. Every single one. I write one check. Even my mortgage deducts from Visa. I figure I’ve got a house with 3.59% interest, a car with 0%, and a credit card with 5% cash back. I’m winning on this interest game :-)

  10. DeeJayQueue says:

    I’m not even going to bother with asking people to RTFA. How about reading the post referring to the article before spouting off with the contrary opinion no matter what the article or its referring blog post actually says huh?

    For everyone who’s going off about fraud protection and bla bla bla and how credit cards are fantastic for people who pay them off in full every month and how you get 1% cash back for using them to pay your tuition… this article isn’t for you. It’s for the people who for whatever reason either can’t get or can’t responsibly use credit, or don’t want to.

  11. SOhp101 says:

    @Buran, FatLynn: It’s not an anti-credit card article, you just don’t know how to read, that’s all.

  12. lws1984 says:

    I only have 1 credit card and no loans or anything. Barely ever use the credit card.

    Another useful tip is to not buy new cars, and to buy a car and use it until you absolutely can’t use it anymore. It will save a lot of money in the long run.

  13. FDrebin says:

    “One must be aware, however, that debit cards do not offer the same level of protection as credit cards.”

    This is completely untrue. If my debit card is stolen I am not liable for any purchase made. Remind me how this is worse than a credit card’s fraud protection?

  14. SadSam says:

    Even if you pay your cc bill in full it still may lead to overspending. I always paid my cc in full and rejoiced in my rewards. When I switched to using my debit card for day to day purchases my spending went down b/c I had to think do I have money budgeted for this purchase, how much money to I have in my checking account, etc. I don’t think credit is evil and still have a credit card. I know for that for me the switch to debit was a good thing and has greatly reduced my misc. spending.

  15. pestie says:

    @FatLynn: I’d like to see how you plan to buy a home.

    For the truly dedicated, it can be done with cash. It might require a degree of flexibility that would cause many people to balk, however. One might choose to live somewhere where you can get a nice house for $100K vs. $500K (a 2-income, kid-free household could manage to save $10K a year, and there’s cash for a house in 10 years), buy cheap land and build yourself (assuming you have the skills), etc. It might not be for you, but for a growing subset of Americans, it’s a good way to live.

  16. pestie says:

    @FDrebin: I think they actually meant “Debit cards are not required by law to have fraud protection like credit cards.” My debit card also offers 100% immunity from liability if I report it stolen, etc.

  17. anatak says:

    Great post, Meg.

    We’ve been debt-free except for our mortgage for 2+ years. Credit cards were closed and shredded a year or two prior to that. Yet we closed on a house this year and got and excellent rate on a 15-yr fixed. Not as impossible as people think.

    As stated in the article, it really is liberating not just to be out of debt, but also to be rid of credit cards. I don’t care about what slimeball tactic they’ve implemented this week. No worries about if the payment made it on time and if they posted it on time. Internal fraud investigation this and mandatory binding arbitration that. I can go on and on, but it really is a simpler way to live.

    Also, no credit =/= bad credit. no/short credit history =/= high interest sub-prime mortgage.

  18. CumaeanSibyl says:

    @DeeJayQueue: But don’t you see?? Not using credit is stupid and dumb and un-American! Good luck ever doing anything with your life, you Ramen-eating pinko!!

  19. Mary says:

    I’ve lived without using a credit card for over two years, and it’s been almost exactly two since we paid off all the balances and refused to use them again (though we do keep them around for emergencies) and it’s be wonderful.

    Granted we still have a car loan, some student loans, and we’ll have a mortgage in less than a week. But not having a credit card payment every month has been a godsend, not just for our budget but for my piece of mind.

    Though to be honest, everybody still says you should have a credit card that you’re paying off every month to build credit history. Is that true or not? Nobody can tell me a simple answer.

  20. jmschn says:

    @pestie: Debit card fraud is not 100% immunity for everyone. Please read fine print for your bank’s card. By law, even if the consumer is a victim of debit card theft/fraud, they CAN be liable for up to $50. Also, the number changes depending on when you actually notify the bank; if you don’t notify within the 2 day limit (yes 2 days!) then you could be liable for up to $500!
    [www.frbsf.org]

  21. jmschn says:

    Also, make note of a difference between ATM/Debit Card and ATM/Check card! If you have the ones w/o a Visa or MasterCard logo, then you may not even have the fraud protection..YMMV, always read fine print.

  22. Saeculorum says:

    The real problem with debit cards isn’t the lack of a law requiring fraud protection or the fact that several debit card agreements won’t protect you if a transaction is done with a PIN. It’s the simple fact that until you are reimbursed, your checking account is lower than it should be. You could even be reimbursed within a day and still have your mortgage payment bounce. You don’t want that to happen.

  23. bobosims says:

    You do not need a credit score to buy a home!!! Thousands of people do it every year. Work with a reputable mortgage agency who still does “Manual Underwriting” … you’ll get the same rates you’d qualify for with a credit score, no problem.

    And newsflash: No one *needs* a credit card! Our own piss-poor financial management choices have put many of us in the position where we think we do, but we just don’t. Pay cash or check, do whatever it takes to pay off your debt and start using your money as the most powerful wealth generating tool that it it.

    Don’t think it can be done? Tune in to Dave Ramsey’s radio program or check out his website ([www.daveramsey.com]). There’s not a single person reading this that is too far gone to turn their financial life around. Trust me!

    It’s time to take responsibility for your own actions and do what needs to be done to build a strong financial foundation!

  24. bnet41 says:

    @lws1984:

    The new car thing can go both ways. Sometimes it is better to buy new or very close to new if you need a reliable car. Not everyone has good mass transit options, so if you need that car to get to work its better to have something reliable.

  25. BillyShears says:

    Earn interest instead of paying it. The problem with debt or credit is that you waste money paying interest.

    Only if you’ve got the big, brass ones to spend more than you can afford in any given month. Don’t want to pay high interest rates? Pay the bill in full, it’s not a difficult concept.

  26. Myron says:

    More moronic financial advice. How to live without credit … just pay cash. Need a car to get to work but don’t have enough money to pay for it … just pay cash. Wait, that won’t work.

    If I had the cash to pay for everything I needed, like a house to live in, I wouldn’t need credit. But credit is necessary. And interest is not a “waste of money”. It is the cost of borrowing money. If you put your savings in a bank and the bank pays YOU interest, is the bank wasting its money?

  27. speedwell (propagandist and secular snarkist) says:

    @pestie:

    You’re absolutely right. I carry no credit cards. I’d like to tell you about the subdivision lot I bought in a decent country town twenty minutes from my fiance’s mom. Bought it on E-bay for six hundred dollars. Paypal. Then M-I-L found out that the lots on either side were tax delinquent and the tax office couldn’t locate the owners, so I picked them up for a hundred dollars apiece in back taxes.

    On this lot I am going to build a modest but adequate cottage, about 1800sf, using a simple, sturdy post-and beam foundation suitable to the sloping third of the property, and structural insulated panels (SIPs) for the walls. I’m planning an extensive garden and a small guesthouse for the flatter two-thirds. I don’t think it will take me more than fifty thousand dollars for the house, and I have that saved.

    Oh, did I mention I have negative fifty thousand dollars in debt? (grin)

  28. bobosims says:

    @Myron: you borrow for a house, but you don’t need a credit score to do so… see my earlier post. There’s nothing else you need that you can’t pay cash for. The more you can save creatively, the more you’ll have for the things you truly need. Need a car? How much money do you have? Buy a car with the money you have. Later, after saving more money, trade in the car and combine that with the money you’ve saved to get into a nicer car, and so on. Within a year or two, you’ll be driving a car you can be proud of paid for in cash. Its not hard…. really.

    Credit is not necessary, period. You may have to make adjustments to your lifestyle if it is costing you more than you are bringing in. Fine. Just do it.

    If, by living “on the cheap” you can save enough money to pay cash for your next expense, then you’ve saved more than just the cash you need for it… you’re also saving the interest you would have paid if you had used credit. In essence, you’re giving your money more bang for the buck. It can be done.

    If you choose to live a life defined/undermined by debt, then that is your choice. But you can choose not to. That part is up to you alone.

    Too much debt? Think it’s not possible to get out of it. Well, for starters, sell stuff. Don’t sell your heirlooms (can’t get them back), but sell everything else. Use all of that money to pay down your debt. Get a second job or freelance, use all of that moeny to pay down your debt. Make (and stick to) a BUDGET!!!

    Live a life of minimalism for as long as it takes to get out of debt. Then keep living it while you save the money you used to have to use to pay all those monthly payments. Invest in some growth mutual funds. Watch a little bit of money turn into a lot. If you and your spouse are 40 years old, and you make the maximum contribution of $4000 from each of you per year to a 401(k) invested in growth mutuals, you will be millionaires by the time you’re 70. The glorious math of compounding interest!

    It’s like my buddy Dave Ramsey says (paraphrased): “If you’ll live like no one else, then later you can live like no one else.”

    It’s time for each of us to take RESPONSIBILITY for our financial choices!

  29. bobosims says:

    @speedwell: Way to go, Speedwell!!!

  30. Saeculorum says:

    @bobosims: You would need about a 14% continual annual increase to turn a $4000 investment (into an IRA – not a 401(k)) to get a million after taxes. You don’t actually believe you’ll get that, do you?

  31. FLConsumer says:

    @FDrebin: Debt cards have no federal regulations on them, whereas credit cards do. If your debt card gets stolen/abused, there are no written laws to protect you. It’s just you vs. your bank’s good will and you’re out the money until IF (big if) and when the bank decides to give it back to you. Now, if you’re using a credit card, the rules & laws are clear and you better believe Visa/MC/Amex/etc aren’t going to make a decision against the laws which benefits them more favorably than the consumer — they’d get nailed. I have seen them bend the rules in favor of the consumer many times ‘though.

    JMSCHN has it right, most debt cards have similar wordings to this. $50 deductible, up to $500 or more if not reported immediately… and that’s immediately upon loss AND/OR first fraudulent charge. So, if your card # happens to get abused (like the VIP Tune thing that’s going around), you’d still be out the $20-30 and possibly more if it took you longer than 1 day to notice the card # was being abused.

    Compare this to my Visa Signature card. I saw the VIP Tune charge about 4 days after it hit, called up the bank around 3pm and it was removed instantly, with a new credit card FedEx’d to my door by 8am the next day. They even gave me the option of leaving the old card working until I had received the new one. Total cost to me? $0.00 You’re not going to get this level of service with a debt card.

    Another downside to debt cards is if you travel frequently. Most hotels/car rental agencies/etc. often request a hold of a certain amount of money. If you’re paying with a debt card, then your checking account could easily find itself missing $300+ for a few days until they clear it.

    I’ve “RTFA” and there are some good points in there, but there’s plenty I don’t disagree with.

    Buying a house with cash? You could…but why? Use that money to make more money! Same goes for student lons. Take the money & run, even if you have the cash. I’m planning on taking out more student loans for grad/med school and reinvesting it. Interest free loan until I graduate? Hell yeah. Throw that “free” money into a stable investment (even a high-interest CD) and make some money from it. Always diversify your investments so that you won’t ever lose more than what you’ll need to repay the loan and you’ll be fine. There’s a good chance that you can make some serious money as long as you don’t make any glaring screwups.

    All of the “without credit” things — screw that. If you’re paying a deposit for something, that’s usually kept by the company without them paying you any interest. Similarly, if you have no/bad credit, you’re not going to be able to have some services, might get declined by employers, declined or pay terribly high rates for insurance, etc. Good credit makes sense even if you’re not planning on using it.

  32. mrosedal says:

    I buy everything via a Discover Card. I have only paid interest on it once (for an engagement ring). And I have been enjoying cash back among many other things. I mean when you think about it…the amount that I have gotten back is worth it considering I have paid so little interest. Credit and the use of a credit card is not a bad thing. You just need to remember that a credit card is not your friend. If you pay in full every month who cares.

    Now as for the car…I think it may be of value to pay in cash…but I figured it out…and I am gaining more interest by having my money in a mutual fund/money market than I am paying in interest for my car loan…so maybe the car loan isn’t a bad idea either.

  33. bobosims says:

    @FLConsumer: Taking on debt in order to reinvest it to make money is a risky & minimally rewarding proposition. Like you said, “as long as you don’t make any glaring screwups”… but if you do (and the vast majority of people do), you’re SOL.

    The greatest “forgotten” portion of that equation is that you’ll be paying taxes on whatever amount you might earn. Say you take out a student loan, and then use the proceeds as a basis for reinvestment. Assume you’re getting a 12% return (a minor miracle for something short-term) and your mortgage is at 8%. Do the math… a 4% gain. But, when you consider that the rate of inflation is about 4% annually, and that you’ll be paying the government taxes on your 4% gain, you actually end up in a loss scenario. Adjust it how you will, the principle holds true. Your return will be marginal at best, and destructive at worst.

    Nevermind the risk of taking on that loan… lose your job and the house gets repossessed, then where are you?

    That’s kind of like being trapped in a tiny cave that’s had the only exit covered by a rockslide. Yes, you can use dynamite to blow those rocks out of the way and open up the exit, but the size of the cave, the power of the dynamite, and the ability of your body to withstand massive amounts of extreme force are all factors in whether or not you’ll get out in one piece. Odds are, you’re not gonna make it.

    If you treat debt as your dynamite, statistically speaking, your ruin is a matter of “when” and not “if”.

    Ask any person who has a lot of money and is debt free if they would be willing to risk their own assets on such a scenario, and the answer will be a resounding “no”.

    If I can make a comparatively small amount of money in a high risk scenario (using debt to finance investments), but I can make a lot of money in a low-risk scenario (saving cash over time & investing it into something tax free), what will I be smarter to do? That’s basic math.

    The sooner people can get it through their heads that DEBT IS NOT A TOOL, the sooner they’ll be on the road to financial freedom.

  34. JayXJ says:

    For cars it is often more economical to buy used for cash. The average car payment is around $300 a month. For $3600 a year you can do an incredible amount of work to an older car, and rarely will your car cost you this much per year in maintenance anyway. That amount will buy a new engine AND transmission or a very high quality paint job. Good cash values are out there if you look hard enough. I picked up a used car with a new engine for $2600…about the amount of the down payment on my last new vehicle.

  35. Buy a car with the money you have.

    @bobosims: Some (I’d think many) don’t have that kind of money or aren’t comfortable wiping out all of their savings.

  36. bobosims says:

    @Saeculorum: Yes, IRA, I mis-typed. Thank you for pointing that out. As far as the millionaires scenario, that’s $4K per person (husband & wife), so $8K annual. Here’s the math: Beginning with $0, with $8K contributed per year for 30 years with 12.5% interest yields $2,393,517.96 at the conclusion of the 30th year. Indexed for inflation of 4% per year, that money will be worth $1,078,183.81 in today’s currency.

    Put that money in mutuals at age 70, and even with taxes, inflation and a rising cost of living, you and your wife will be liquid through age 96.

    After that, your children (which you also trained to invest wisely, I presume) will be able to maintain you (should you still be on this side of the dirt) until you hit the other side of the dirt.

    It works. It’s simple. It may save your life!

  37. MyCokesBiggerThanYours says:

    For the last 5 years I have paid cash for everything – never debt-spending. I have reduced an $18,000 outstanding debt to less than $2000. By 2008 I’ll owe nobody nothing. And then I’ll be able to afford health care!

    If you can’t pay with cash that means you can’t afford it. You shouldn’t be buying it in the first place.

    Remember, every time you pay with credit or loans you end up paying close to twice the ticket price after paying the interest for several years.

    The second thing you can do is consolidate your credit cards onto on card at a fixed rate. Anything below 6.99% is good.

  38. bobosims says:

    @Rectilinear Propagation: so get a 2nd job or freelance and save to buy the most basic car you can… I paid $900 for my first car (in 2002) and it ran with minimal repair for 2 1/2 years. That gave me a lot of time to save toward getting something better… So get a 2nd job you can ride a bike to, and save $1000 (or $1500, heck, I don’t care) may be 3 months of work you’d rather not be doing, but it will put you in a set of wheels.

    You have to be creative and willing to “do what it takes”. Nobody’s gonna hold your hand… you’ve gotta walk that road by yourself.

  39. bobosims says:

    @MyCokesBiggerThanYours: Congratulations!!! You have just proved (once again) that it is possible! Way to go!!!

  40. Myron says:

    @bobosims: Bobsims, I have a few questions about your IRA scenario:
    1) What investment do anticipate will give you an annualized return of 12.5% over the next 30 years?
    2) Does that investment carry any risk? If so, should the couple transition to more conservative investments as they approach retirement. Doing so will reduce your 12.5% assumption.
    3) What withdrawal rate do you figure for the retired couple? A common rule of thumb is to spend 4% of saving a year during retirement. If the couple has $1,000,000 dollars saved then they would be living on $40,000 per year (all in current dollars).
    4) People often think they will retire at 65. Why are you using 70?

  41. gibsonic says:

    we’ve converted any revolving debt (and the last bit of two car loans) onto 0% credit cards. We have to move the balance once a year per card at a hit of like $75 but we’ve saved hundreds if not thousands in interest. This isn’t a game people want to play that have a real credit impulse buying problem.

    We we get the cards with 0% we put them in the filing cabinet and they are never used.

    for those that say you need a credit card for the fraud protection, points, cash back, etc…just get an AMEX card.

    We use it and b/c we have to pay it off at the end of the month it keeps us from buying more than we can really afford.

    We use the points to convert to frequent flyer miles or more recently to Home depot gift cards to do home improvements.

    if you can qualify for buying an automobile with on of the 0% plans, you are foolish not to (assuming you just HAVE to have a brand new car).

  42. Nobody’s gonna hold your hand…

    @bobosims: But someone might give me an auto loan.

  43. FLConsumer says:

    @bobosims: when I funnel the profits into my IRA, thay’re tax-free. No state income taxes here.

    Ask any person who has a lot of money and is debt free if they would be willing to risk their own assets on such a scenario, and the answer will be a resounding “no”.

    I’ve yet to find anyone with substantial savings who doesn’t use the scheme I’ve mentioned. Because it IS borrowed money, you don’t take huge risks with it. The goal here is to make SOME money, not CEO compensation plan level profits.

  44. anatak says:

    “Compare this to my Visa Signature card. I saw the VIP Tune charge about 4 days after it hit, called up the bank around 3pm and it was removed instantly, with a new credit card FedEx’d to my door by 8am the next day. They even gave me the option of leaving the old card working until I had received the new one. Total cost to me? $0.00 You’re not going to get this level of service with a debt card.”

    O Really? Funny how BofA did just that for my debit card. And, since we were leaving for vacation the next day, they even sent it to their branch in that town.

    Its also interesting how people love to pull out the law books to debate credit vs. debit. And just how often is it that you have to enact that law to get your credit card issuer to behave? Visa and MC extended their zero-liability clause to their debit cards 6 or 7 years ago. So if your bank isn’t behaving, then all you have to point to is Visa or MC’s rules. No need to get the federal government involved. I’ve never been liable for a dime’s worth of the fraudulent transactions on my debit. Everything was returned by the next business day. Every time. No issues.

  45. anatak says:

    @Myron:
    “1) What investment do anticipate will give you an annualized return of 12.5% over the next 30 years?”
    12% is a good watershed for mutual funds (long-term investing). Not terribly difficult to achieve.

    “2) Does that investment carry any risk? If so, should the couple transition to more conservative investments as they approach retirement. Doing so will reduce your 12.5% assumption.”
    All investments carry risk. Risk generally increases as the returns do. A balanced portfolio of investments can help mitigate those risks. Transition when closer to retirement? You may want to downshift from some of the more aggressive funds so something more stable. But not to the extreme that some financial planners will put you into – bonds and low return crap.

    “3) What withdrawal rate do you figure for the retired couple? A common rule of thumb is to spend 4% of saving a year during retirement. If the couple has $1,000,000 dollars saved then they would be living on $40,000 per year (all in current dollars).”
    Live off of the interest. Or less. The point is not to touch the goose, only the golden eggs. BTW, $40k is darn close to the average household income in America. So not impossible to live on.

    “4) People often think they will retire at 65. Why are you using 70?”
    If you only start saving for retirement at 40, then you may not want to retire till 70. Not everyone gets started saving in their 20’s.

  46. r.chard says:

    For those of you wondering why credit equals a bad thing, I’d like to point you to Mr. Dave Ramsey’s book The Total Money Makeover. Since reading this, my wife and I have stopped using credit cards and cleared debt from our lives (except the house — working on that). The basic theory is that today you live like no-one else so later you CAN LIVE LIKE NO ONE ELSE.

  47. Trackback says:

    Consumerist linked to a post on Zen Habits about how to live a life without credit or debt and my first reaction was “why?” There are plenty of reasons why credit cards and leveraging debt are beneficial, just as many reasons why they are dangerous, and understanding those are just as…

  48. Rusted says:

    I’m living completely debt free now. Kinda like it. No mortgage to worry about, nix on car payments, and shredding credit card offers with great glee.

    Amazing how low one’s overhead gets without monthly extorti…..uh …payments.

  49. FLConsumer says:

    @MyCokesBiggerThanYours: Congrats!!! I missed your post earlier, but that’s one hell of a great recovery effort there. Once you’ve paid off that last payment, you’ll be amazed at how free you’ll feel.

    @anatak:

    Its also interesting how people love to pull out the law books to debate credit vs. debit. And just how often is it that you have to enact that law to get your credit card issuer to behave? Visa and MC extended their zero-liability clause to their debit cards 6 or 7 years ago. So if your bank isn’t behaving, then all you have to point to is Visa or MC’s rules. No need to get the federal government involved. I’ve never been liable for a dime’s worth of the fraudulent transactions on my debit. Everything was returned by the next business day. Every time. No issues.

    That may have been your experience and it may be BoA’s policy, but all of the debt card agreements I’ve seen are clear with their $50 deductible for lost/fraudulent charges, $500 or more if not reported within 2 days. Considering that’s what the bank’s terms of service are, you can’t really expect them to do much more than that since it’s what you’re agreeing to. Trying to get Visa/MC to enforce their terms of service is hopeless. Look at all of the places which still have maximum & minimums on the amount they’ll let you charge with your credit card. Even the newer US Postal Service machines which ONLY accept credit cards won’t let you make a purchase for less than $1. I’m also not 100% sure how that would play out in a courtroom if it got to that. You’re agreement is between you & the bank, not you & MC/Visa.

  50. bobosims says:

    @r.chard: Congratulations my friend! Yet again, proof it can be done! Not too long and you’ll be able to call in and yell “I’m Debt Free”! Way to go!!!

  51. anatak says:

    @FLConsumer:
    “That may have been your experience and it may be BoA’s policy, but all of the debt card agreements I’ve seen are clear with their $50 deductible for lost/fraudulent charges, $500 or more if not reported within 2 days.”

    It was my experience and it was/is BoA’s policy.
    From BoA’s website:

    Lost or stolen ATM card or Check Card

    * Report your lost or stolen ATM card or Check Card immediately.
    o In California, call 1.800.622.8731
    o In Idaho and Washington, call 1.800.442.6680
    o For all other states, call 1.800.432.1000
    * In addition, if your card is lost or stolen, our Total Security Protection Zero Liability guarantee reimburses you for any unauthorized card transactions up to the amount of the loss, when reported within 60 days from statement date.


    Deductible? Deductible? Have you you been reading insurance policies? The Debit card agreements I’ve seen say that you may be liable for up to… There is a big difference between that and a deductible.