How Necessary Are Credit Cards?

When I was 20 I worked at a large bank in their credit department. All day long I stared at the balances and payments due on the loans, mortgages, and credit cards of the members of this bank. I had the unfortunate honor of sending out collections letter, fielding phone calls from members whose cards had been declined, and making sure their payments posted to their accounts. I thought I understood credit pretty well, so when my boss recommended I make their credit card my first credit card, I screamed, "Where do I sign!!??" $4000 in credit card debt later I regretted ever getting that card, and the cards that followed. I met my husband when I was 22, and he had flawless credit, but it wasn't established. Mine was established but terrible. He didn't have any credit cards. And I had two defaulted ones. When we decided to be married we knew we would have to make my debt "right" and establish his. But how?

We started by paying my debt down/off, which took time and a lot of financial sacrifices. My husband is a real life "rocket scientist", and when we'd turn down our affluent friends for dinner, or skimp out on Christmas one year, our family and friends would ask us "jokingly" where all that "good money" was going. Unfortunately, it was going to pay off my bad decisions.

We had trouble establishing my husband's credit because even though technically he should have good credit (no defaults, no bad debt), he just didn't have the "good" kind of debt. It took us 5 years of marriage for him to finally be able to get a credit card, despite a very high credit rating. As of this year my debt will be completely paid off. And as of this year we still only have just the one credit card: a Best Buy card we used for purchasing the appliances in our new home.

Some have advised us to get more credit cards, which baffles us. We understand the credit system, and that having some debt is actually good for you, but we've always felt that if you have the cash in hand, why not just use cash? And if you can't afford to pay for it out right, should you really be getting it?

I feel that our credit system isn't the best system we have going for us. It just seems unfortunate that you can't buy that home you want, or get that car you need, even if you make more than enough to make your payments and pay it off in a few short years, (as is the case with my SUV), just because you don't have enough debt. Seems a bit backward to us.

So that's why we've decided to continue paying for everything in cash. In the short term we've had to make sacrifices, but we believe in the long term we'll look back and be proud that we don't owe everything we have to a credit card company or bank.

How many credit cards do you have? Have they been hard to maintain for you? Have you ever paid down your debt and attempted to live debt-free?

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