Living without a credit card in a digitized world
So what my post this morning failed to address and NCN asked on Day 8 of his 33 Days series is how hard is it to live without using a credit card in our increasingly electronic/digitized world?
Actually, really, not too hard. All because of the debit card. I know that a debit card is theoretically not as secure as a credit card (although many banks, including mine, are closing this gap rather rapidly) and the rewards are not as great (although I am just glad I get rewards with my debit card now) but in day to day life, there is really not much difference in how I operate. I use my debit card for just about everything. I do have three credit cards, as I have mentioned before, and for a while I carried them around in my wallet “just in case” but honestly, just in case never happened. Even things like renting a car when my unoccupied car was hit in a parking lot or having a locksmith come to fix my car when the lock broke I could do easily with my debit card, no problem.
I do make one concession that I might not make sans debit card. I have a very low interest earning savings account at my brick and mortar bank attached to my checking account for overdraft protection purposes. Not to protect against me causing an overdraft exactly (although it can do that too), but in case I needed more money than my checking account had in it, I could very quickly (even through my cellphone) transfer money from my savings to my checking. Although I have the rest of my money in ING Direct savings accounts, I keep my emergency fund at the brick and mortar savings earning very little interest. My emergency fund is small though, only $1000, so the losses in interest are not spectacular. I don’t intend, even when all my debts are paid, to have a larger emergency fund in that account. The 3-6 months of expenses account once I am out of debt will be in a high-yield online savings.
It may take me a year to earn a $25 Target gift card through my debit card reward points plan but for now I am very happy to have the peace of mind that I am spending my money that our family has already earned, and not a credit card’s loan.
~J
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