Creditless

I just received a modest sum of money which enabled me do something I’ve been planning for a while: to pay off the last of my debts, put the foundation of some savings in the bank and cancel my final credit card. This means that for the first time since I was about 20 years old, I’m debt free and living without credit.

I twittered this fact and asked for feedback from people and got some interesting responses (mostly cheers) via Twitter and Facebook. In order to calm people down a little: I still have a Visa debit card, so I can still shop online. My friend Lochy asked me to blog a little about how the whole experiment goes and I think that’s an interesting idea, so here’s some first thoughts:

First, it’s exhilarating. Every personal finance book I’ve ever read starts with the advice: “first, pay off your credit cards” and I have to say it feels very good, both doing it and knowing I have enough money in reserve to cover some basic emergencies. Even while using credit cards constantly, I have irrationally resented the banks for giving them to me and for constantly raising both the interest rate and my credit limit. Really though, I should read the product disclosure statement, have some self-control, turn down credit limit increases.

So second, I want to come out in public and say: I’m not good with credit. I’m the ideal credit card customer who fills the card, stays just under the limit, pays pretty regularly and never quite pays it off. Banks love me. The clever credit users pay the card down to zero regularly, never spend more than they can repay within the interest-free period and never get charged late fees. Banks hate those guys – they’re a drain on a perfectly good profit-making system. I aspired to be one of those people. But I’m not.

I’m a person who lends money and then forgets the debt within a few weeks. I can rarely answer how much things I bought cost. I don’t bargain. I mentally use the same anticipated income to pay more than one debt. I’m not what you’d call “deft” with my finances.

I’ve come to acknowledge that I have a mental deficiency… let’s call it, Idunno… Profound Financial Aphasia or something. I’m a little retarded about money. Some people need books with big print and small words. I need to only spend what I have.

Third, having something saved makes me feel like saving. There’s a few things I want, nothing urgent. I could just buy them, or I could save some money over the next few months, make a little extra interest and buy them later. Here’s the weird thing: for the first time, I feel like waiting. So not me.

I’ve waited to buy a few things recently: some computer gear, some books, a cassock. I’ve had no credit to spend, no cash in reserve, I’ve just had to wait. You know what? Just like Grandma used to say, having to wait makes it genuinely more delightful when I finally get the thing. I’m sure it’s something I really want, not just a passing whim. Waiting makes me feel like I deserved it.

So, why not wait, save up and buy it when I have some more money saved? My friends who don’t have PFA are ROFLing right now, but pause, reflect on how insane a lot of my behaviour has seemed over the years and share a moment of happiness with me that perhaps I finally get it.

… and check back with me in six months to see how I’m doing.

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