For some people, best credit card deals are useful tools. For others, they’re a gateway to debt. My first step toward controlling my spending was to cut up my gas cards and move to a cash-only system. It was nearly a decade before I felt I could trust myself with a personal credit card again.

You might believe that credit cards are a necessary part of modern life, but it’s just not true. During my nine years without one, I never noticed the absence. Millions of other people live financially prosperous lives without them. Yesterday, CNNMoney posted a story about life without plastic. Donna Rosato writes:

Times are tough, and like everyone else, you are trying to save more and spend less. The problem is, you’ve tried that before, only to see your spending inevitably drift back up. So here’s a radical proposal: Stop using credit cards.

We’re not kidding. If you really want to make a dent in your spending, close your accounts, freeze your cards in a block of ice, do whatever you need to do to rid your wallet of plastic.

The article outlines the reasons you don’t need a credit card, including research that indicates shoppers who use plastic spend more than those who don’t. If you have a debt problem fueled by credit cards, though, it can be difficult to let them go. I know.

When I cut up my credit cards in 1998, I kept all of the account information. This prevented me from spending money at the comic book store, but I could still buy stuff online. Eventually I destroyed this information, too.

Today, in 2008, I’m able to use credit responsibly. I’ve had a personal credit card again for a year now, but I’ve set out clear rules for its use:

  • I do not use it for impulse purchases or for entertainment. (I call this the “no comic books” rule.)
  • I always pay the balance in full every month.
  • If I think I might be tempted to spend too much, I leave it at home.
  • I don’t use the card for online shopping.

These guidelines help me cope with my personal weak spots. Your weak spots might be different. The important thing is to be honest with yourself, and to use credit cards in a way that helps your finances instead of hurting them. If you can’t do this, you’re better off without them.

Rosato’s article also features gallery of ten families who live without credit cards, including my colleagues NCN from No Credit Needed and Leo from Zen Habits. (And GRS reader Matt Hutter!)

[CNNMoney: Life without plastic and They cut out their credit cards, via No Debt Plan]

Addendum: Those wondering why I returned to credit should read this post from a year ago about why I applied for a credit card (and why it’s not the end of the world). Short version: Credit cards offer advantages to careful users. I thought I was ready. I’m willing to kill the thing at the first sign of trouble. So far, so good.

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