Reader Mail: I Have Never Had a Credit Card

I am 27, and I’ve never had a credit card. My parents drilled the concept of “avoiding debt always period end of sentence” into me, and it’s basically how I’ve structured my entire financial life. I have a debit card, and that’s served me very well. I like knowing that every dollar I spend is a real dollar that’s directly connected to my bank account. It means that whenever I make a big purchase, it’s something that I have to save up for and really think about, and this has always kept me in check and helped me control my spending.

I also work in TV, which means that, kind of like freelancing, the opportunities for work can come and go and turn very quickly. It’s an incredibly easy business to rack up a ton of debt in — I know a lot of people who live off their credit cards in the lean times, and I’ve seen a lot of lives made difficult because of it and hundreds of cautionary tales. Which is just more of an incentive to “avoid debt always period end of sentence.”

But my lack of a credit card is also something that generally makes my friends shriek “YOU HAVE TO GET A CREDIT CARD OR YOUR LIFE IS GOING TO BE RUINED DOWN THE ROAD!” whenever the subject comes up. I pay utilities, and in the last four years, I’ve rented two apartments in my own name and on my own credit, so maybe that’s why I’m not taking them very seriously? I suppose I’m just afraid that if I get a credit card, I’ll be too tempted to coast on it and look at the bills later. And I don’t know very much about how they work, which is embarrassing. Balances? Interest rates? This is all a foreign language to me! Help! — M.S.

Letter writer, you are one to be admired. And like Heidi Moore, who does not have a credit card, you will be okay if you decide not to get one.

When I was a recent college grad with no savings, and a future that felt uncertain, I opened my first credit card account with Discover because I wanted to have something to fall back on when times were tight. I did not have the luxury of parents who could welcome me home with any kind of monetary support, and student loan payments loomed over me, signaling to me that I had to get a job, and get one fast. I got a series of low-paying jobs, heard the lingering voice of my mother in my head say, “This is what you get for being an English major,” and charged money to my credit card to pay for groceries when I needed all the money in my checking account to go to my student loan payments. I would pay off the card, and then make more charges. Every dollar in interest that I paid hurt — I felt it in my gut.

There’s a thing that Andrew Jackson once said that I think is relevant here: “When you get in debt, you become a slave. Therefore I say to you never involve yourself in debt, and become no man’s surety.” There was a time when I was a slave to my Discover card. Letter writer, be proud that you are not a slave.

If I had the option back then, I would have not gotten a credit card. I was already a slave to car payments (which I mostly paid off before graduating from college), and student loan payments (still fighting the good fight on this one), and I didn’t need to have a credit card for the age-old argument of building good credit to buy a house one day (my car and student loans were already on my credit report, and diligently making my payments each month would prove that I was a responsible borrower. Sure, a credit card would show I could handle multiple lines of credit, and would improve my score further, but it wasn’t absolutely necessary).

If the circumstances were different, and I had a job that paid me enough not to rely on a credit card for emergencies, I would be paying things the same way I pay now: with my debit card or with cash. I just paid for a flight to California with my debit card, and it felt good — I don’t have to think about paying that money back next month.

You need good credit to do things like convince a landlord to rent you an apartment. When I put in an application for my current apartment, I was told that I would be competing with six other people who were also interested in renting the studio. At the time, I had pulled my credit report and learned that my credit score was close to 800. I crossed my fingers and hoped that a good credit score and a solid letter of recommendation from my previous landlord would make me more desirable. I got a call a few days later saying that the rental company had chosen me. Letter writer, you have already rented two apartments, and there’s no reason that not having a credit card will prevent you from renting apartments in the future.

And there’s no reason that it will prevent you from buying a house one day either. You can get a 15-year, fixed-rate mortgage without a credit score through something called manual underwriting — you’ll need a 20 percent down payment, good income, and a history of paying all your bills on time (rent, electric, cell phone, etc.), but it’s an option to consider.

You don’t have to get a credit card if it’s something you don’t want. But you also don’t have to be afraid of them either. Although I say I wouldn’t have gotten a credit card in the first place, I’ve still held on to the ones I have. They are there in my wallet, but I am no longer a slave to them. If I put in the effort, I might be able to make myself become one of those people who can turn the slaveowners into slaves. I keep them because, yes, I have figured out way to be responsible with them, and being able to wave a good credit score around has been useful to me.

Letter writer, you seem like the responsible type — the sort of person who would not let yourself become a slave to a financial product. Here’s what you need to know: If you get a credit card, and decide to use it, pay off your bills in full every month. Don’t let the banks take any of your real dollars, connected to a real bank account, in the form of interest payments. I hope they never do.

[See previous advice columns]

Photo: Philip Taylor PT/Flickr

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