Why I gave up my credit card

I gave up my credit card about 7 years ago. I had just left my first real job after being there a decade. My income had gone to zero and whilst I figured out what to do next it just kind of felt right.

I used to hate getting the monthly statement, this month it was $5,000, last month it was $7,000. I often wondered how did it get so high. I found it harder to stay on top of. That was the first catalyst for me to do the banking map . It really provided a sense of relief to take back control of my money.

As my income returned and grew, I never went back, I still remember the anxiety about how much the payment would be this month vs. the last and hated the feeling of being in any sort of credit card debt. I’ve done the maths too, on what I need to spend to get value from the points vs their fees. There is a slight positive, but its not worth it to me, and I always come back to there is a reason the banks make a huge amount of money on credit cards and why they always push the limits up.

Another really big lesson, when I use my own money from a bank account I am less likely to spend on that discretionary item – I think twice about it. That consistent saving alone, gives me a much better return than the points.

That’s what’s right for me, it certainly is not what every client I see does. When clients want to use credit cards I try to get them to be clear on what expenses are OK to go on the credit card – have a good relationship with your card (typically I encourage the avoidance of discretionary spending on cards – use it like a fixed account).

We’ve seen so many clients come to us with a lot of money on their credit card, the debt can be hard to battle back from and take years, it just builds up to get through exams, college fees, moving, life – It happens. If you want to use a credit card, I always think – make it work for you, have a discipline around it. If there’s a lot on there, seriously I’d get rid of it and start again, start a banking map and go from there.

Stefan Dooney