Cutting up credit cards can be hard to do.
Back when I had credit card debt, I tried everything else first:
- “just” not using them,
- sealing them in an envelope with a note on the outside,
- putting them away in a drawer,
- and even freezing my credit cards in a block of ice.
You know what happened?
I wound up using them anyway, ripping open the envelope, making a trip home to get them out of the drawer, and microwaving my block of ice so that it would melt faster.
And I felt bad about myself.
In the end, I took a pair of scissors to them.
Why was it so hard to quit using credit cards?
I wasn’t using them for an emergency. (No one was bleeding.) I don’t even remember what I did use them for, but it was probably a car repair, Christmas shopping, or dinners out.
So why the resistance?
I think it was fear. To me the credit cards represented some kind of a safety net. I’d get out the scissors, but then let myself get caught up in the what-ifs.
(What if there’s an emergency? What if I need them? Or what if I want to do ____ and I don’t have the money? What if I lose my job?)
You name it, I what if’d it.
One day I finished the thoughts.
What if there WAS an emergency/whatever and I didn’t have my credit cards?
Well, if it were a life or death situation, hospitals would have to treat me. If it were anything else…I’d wait until I did have the money. I’d be fine, and I wouldn’t owe money and interest.
I realized that credit cards were a net alright; but not a safety net. They were a net that I was stuck in, one that scooped up more of my money in exchange for an illusion of safety.
Following those what-ifs in the other direction helped.
What if I “needed” my credit cards, used them, “needed” them some more, and then ran out of room?
Maybe they’d raise my limit, or I’d get another one, but eventually I would owe more and more money.
And at some point I’d either be refused additional credit or be unable to pay even the minimums, ending up broke. What if I had an emergency then?
I’d have exactly the same alternatives: be treated at the hospital or wait until I did have the money, except I’d also have a huge pile of debt and guilt hanging over my head.
So I cut up my credit cards. I didn’t do it alone, but I did do it.
Should YOU cut up the credit cards?
It depends on your goals, and how you’re using them now. You know the answer.
While I’m not a complete anti-credit card fanatic, I absolutely do think there’s a time and a place for cutting up credit cards. How do you know if you’re at that place?
You’re carrying a balance, and you don’t want to be.
You’re working on getting out of debt, but you just keep turning to those cards.
That’s the kind of situation where cutting up all your credit cards (and maybe even closing them) can help you get control of your money.
Of course, you’ll need to do other things too. Like tracking your spending, budgeting, and building an emergency fund. Maybe making some extra money, too.
But sometimes it can help to cut away the
safety net net you’re trapped in.
Conquering the fear
If the thought of cutting up your credit cards filled you with fear or anxiety, maybe that’s a sign that you really should consider cutting them up. (While focusing on getting your financial life in order.)
Common what-if’s go like this:
- But what if there’s an emergency?
- What if I need to rent a car, or I don’t like carrying cash?
- Won’t that hurt my credit score?
So, let’s go through them real quick.
What happens if there’s an emergency?
Know what you need in an emergency? Money, and insurance. Not debt.
So if you don’t have health and car insurance, make getting that a priority. And if you don’t have an emergency fund, start socking away some money for it today. You decide how much you’re comfortable with, but it should be at least large enough to cover common things that you would otherwise stick on a credit card. And a whole lot bigger if you would really be in trouble if you lost your job.
Not sure where you’re going to get the money for an emergency fund? Check out this strategy for quickly building an emergency fund.
What if I need to rent a car, or I don’t like carrying cash?
If you don’t like carrying cash, you could use a debit card. They swipe just like a credit card, so long as you’ve got the money in your account. (Or you can enter your PIN.) There are some other things to be aware of regarding debit cards — mainly that you’d better call right away if your card is lost or stolen. I personally don’t like debit cards, but I like being in debt even less. And that’s what it took for me to stop borrowing.
And yes, you can rent cars (and hotel rooms) with a debit card. Just be sure it has a Visa or Mastercard logo on it, and call the company ahead of time to make sure you don’t have to bring anything special. You’ll need to have enough cash in the account to cover the hold they’ll put on your card, and the hold can be on there for up to a week or two. That hold is in addition to the amount they’ll charge for the car rental or hotel room. (Don’t have enough money for that? Maybe reconsider or postpone the trip.)
If you’re a frequent car renter for some reason (maybe because of your job), or you want the benefits that sometimes come with cards for car rentals, consider keeping one credit card that you use only for that purpose. (And then pay in full.) If you want rewards, consider how rewarding being debt free will be :)
Won’t cutting up my credit cards hurt my credit score?
No, cutting them up won’t magically hurt your credit score. How would the credit reporting agencies even know that you’ve done so?
If you stop using all types of revolving debt (or all types of debt period), that will eventually reduce your score.
But paying down your debt instead of adding to it will probably actually help your credit score.
(Also, life is not about our scores! If you’re curious though, you can check yours for free using Credit Karma.)
Why cutting up credit cards can help
For me, cutting up the cards was like saying, “That’s it. I’m really going to do this thing. I’m going to get out of debt and get in control.”
It was like cutting those apron strings — apron strings that were more like chains holding me down. I realized that I could handle my money without them. I could get creative and figure out other ways to get the things I wanted and needed. And I did.
Make no mistake, you’ll probably be tested about 5 seconds (give or take) after you cut up your cards. But you can get through it. (Especially if you’ve built up an emergency fund, and gotten a budget going.)
Can you ever go back to using credit cards?
Cutting up the cards doesn’t mean you can never ever use them again. Once you get out of debt and are in a solid financial position, you might feel ok using them again someday. Maybe. You know yourself best.
But if your behavior ever says otherwise (meaning you start to carry a balance again, even just “temporarily” or due to a mistake or an emergency) cutting them out of your life for good is probably the way to go.
I think of my credit cards as being like a dangerous power tool. One I’ve got to keep a close eye on, and one that could hurt me. And I think that’s the right attitude.