For nearly a decade, I lived without a personal credit card. In 1998, I destroyed all my cards and canceled my accounts in a last-ditch effort to curb my compulsive spending. It worked (sort of), and it wasn’t until 2007 that I finally felt like I was responsible enough to use credit wisely without going into debt. (And so far, it’s been smooth sailing.)

What was it like without credit? Surprisingly easy, actually. Though a lot of folks will tell you that it’s impossible to rent cars or get a hotel room without a credit card, that’s just not so. A debit card lets you do all of these things, too. (Though, to be fair, companies will often put “holds” of several hundred dollars on a debit card when you rent cars or stay in hotels.)

To be honest, I didn’t miss having a credit card when I was living without one. I never encountered a situation where a credit card was required. Not once.

Writing in this morning’s USA Today, Sandra Block says that more and more consumers are saying “no” to credit cards:

In a country where the average consumer owns five credit cards, [folks without credit cards] may seem somewhat quaint, like an Amish farmer who drives a horse-drawn buggy. But proponents of a no-credit-card lifestyle say there’s nothing old-fashioned about their choices. And they’re convinced that their numbers will grow as consumers become increasingly disenchanted with credit card industry practices.

The author points out that credit card usage is slowing rapidly. National credit card debt fell by nearly 20% in November; new credit card accounts are down almost 50% from a year ago; and even folks who do use credit (73% of Americans, according to the Federal Reserve) are using credit less often. (IndexCreditCards.com, a credit card comparison website, also released a report on how average credit card debt has dropped to $3,752 from $4,013 in their last report from July 2009.)

Block’s article profiles several Americans who have decided to declare: “No credit needed!” Among them:

  • Emily Maddox (24 years old), who has never had a credit card and has no plans to get one. They make her nervous.
  • Dann Zinke (22), who is saving for college. He thinks credit cards are a hassle.
  • Our very own GRS staff writer, Adam Baker (25), who opts to live without credit cards because it’s easier to track spending and helps him live a simpler lifestyle.
  • Luis Rosas-Guyon (37), who finds that since he gave up credit cards ten yeas ago, his life is less stressful.
  • Tim McFarlin (34), who ditched credit cards because he thinks the industry’s practices are unfair to consumers.

There are tons of different reasons to live without credit cards. (For my book, I interviewed three different folks who live by the “no credit needed” motto, and each had a different motivation.) The policy has some drawbacks — credit cards do offer consumer protection and other benefits, and they help you build your credit score — but I know from first-hand experience that living without them is a perfectly valid choice. It’s not only possible, but can be profitable as well.

How many of you live without credit or have done so in the past? I know from past conversations that there are some die-hard credit-card users around here (and these are folks who use them wisely, not irresponsibly), and there are also some die-hard “no credit needed” folks. I think both camps have merit, and the important thing, as always, is to do what works for you.

[USA Today: More consumers just say no to credit cards]

This article is about Choices, Credit Cards, Debt  Monday, 8th February 2010 (by J.D. Roth)