Coupla things... I have been in a serious mood to pay off debt and start a strict retirement fund. Luckily, I am not extended too far, however, my new plan includes NO credit cards... I pay for things via cash or money orders. Works quite well as you NEVER spend what you don't have. My question... I am finding some companies REFUSING to accept cash/money orders... can they do this? For example, I pay an annual fee for my AOHELL service and want to send them a money order for the full amount and they say they cannot accept a payment this way. Huh? A multi zillion dollar merged corporation cannot accept a money order??? And, interestingly enough, the more I try to stick with a "cash/money order" only plan, people question me warily... as if I am "hiding" something (i.e., IRS) or have some enormous/evil cash problem... not true, just want to simplify and be debt free. Any suggestions (sans a debit card)? ---

-- Anonymous, February 19, 2001

Answers

Why can't you use a credit card for things such as AOSMELL that won't take other forms of payment, but set aside a money order to pay off the credit card company? You're just shifting who you send the payment to, AOHELL or Visa (or whomever). You'd still meet your goal of never spending money you don't have. (This assumes a steady income.) I know some people who really detest credit cards but they have at least one just for situations such as yours.

ISPs and online services, among other corporations, want credit cards so they can bill in advance. Partly they can play more games with your money that way and partly they protect themselves from people who sign up but don't ever pay up.

Companies can accept or refuse any form of payment they want, but it's completely bogus for people or businesses to be suspicious about you just because you're not in lock-step with all the other credit-happy consumers out there. I hate crap like that, when a company expects you to be just another sheep and they get all balky when you aren't.

-- Anonymous, February 19, 2001

Marisa, you should be using a credit card for all your purchases/bill paying. Miles, baby, miles. That's the name of the game. Mexico with Gwenny for4 free, or the Islands, or England with Milla. Miles, baby, miles. Just pay it off befor ethe end of the month and no interest either. I'm going to Italy next fall this way. Too cool. Chiou baby, James

-- Anonymous, February 19, 2001

Well, that's a good point, James. My wife traveled by air a lot in 2000 and all her miles that she earned via the credit card meant she got to fly business or first class every time, free upgrades. And, going back a few years, we used to use a credit card co-branded by Blockbuster so I ended up getting a lot of CDs for free when there was still such a thing as Blockbuster Music stores. Even before that, we used an Apple co-branded card and that got us a few free goodies, too.

-- Anonymous, February 19, 2001

Marisa, you could combine both things and get a credit card that doesn't allow you to carry a balance so you have to pay it off at the end of each month, so you still wouldn't be spending more than you can afford. Get one of these combined with one that earns you AirMiles or something else useful and Bob's your uncle. :)

-- Anonymous, February 19, 2001

Marissa is smart for wanting to cut back on her credit card purchases. The brain is like a muscle, in that the more you use it, the stronger it gets. The credit card-spending part of her brain is stronger than she would like, so she's restraining her use of it. If you don't have the discipline to handle the credit card spending, then the miles you gain from them become a liability. If you have debt and no savings, you have no freedom. Think of your retirement savings as a Go to Hell fund, and build that as quickly early-on as you can (the convention is that the first 4 years of your savings will out-perform the last 20 years). This is the money with which you can tell any boss you don't like to fuck you. Right now, the money you save from avoiding those frequent-flyer vacations is more valuable to you than padding out some fantasy that your youth wasn't wasted on you when you were young.

Don't listen to Paul and James. They're old, and they have money, and they're making it sound how easy it is to manage it without seeing for themselves if you can harvest it properly, and for the rest of your working years. The most reliable way to make money is to cut spending. Don't listen to anyone telling you how to spend $.15 like a dollar, when you're better off saving the $.15. Also, stay away from people who are promising, this time for real, that they're really gonna reign in their credit card debt. They're trying to set unrealistic spending goals, and when they fail, they'll fail big time, and maybe show you how to do the same. Make sure they keep their money problems to themselves, so they don't confuse you. Money isn't happiness. Money isn't going to make you safe. Money is freedom.

As for your ISP, is there some reason you can't open up your phone book, and open an account with a local provider? The main advantage in the national companies is that, if you travel, you can log on anywhere in the country. A local provider is just that, local, which means the service is better (if you can let them know succintly what you know, and what you don't know, so they can help with any configuration required; these guys can have huge egos, so don't yell at them; just remind them what pansies they are if you can't connect to their servers) and most likely cheaper. You should be able to get a cheaper rate the farther in advance you pay. If you like to chat with your friends, you should still be able to use instant messenger, or tell your friends to use ICQ, which is free.

-- Anonymous, February 19, 2001

The wife and I destroyed our credit cards 20 years ago and have never looked back. I get around the credit card hassle by having an me2 card. It's value is determined directly by how much money I put into that account AHEAD of time. I buy things off the net, buy gas, etc with it, but it's not credit. Check it out. Money is freedom...that is so true. We've been lead to believe that credit is freedom, but it's modern slavery and it's self-perpetuating. Many banks will offer these cards and they only charge a small percentage, becuase they already have your cash deposit for it. It works for us.

-- Anonymous, February 19, 2001

Aol will take payment out of your checking account.

-- Anonymous, February 20, 2001

Man, I'd never trust someone to take money directly out of my checking account. Never. It took me years to believe in allowing someone to directly put money INTO my checking account, and that's only because my husband kept forgetting to bring home his paychecks.

Especially a megacompany like AOLTIMEWARNERgobblegobblegobble. Think you'll get a speedy, pleasant response when they screw up and withdraw 10 times as much as you owe? I wouldn't hold my breath. And unlike credit card companies, you're going to have few, if any, rights to dispute their sticky fingers.

You're right not to go the debit card route, either. You don't have the same legal protection you do with credit cards -- that money is just gone in the event of an error. In the past 10 years, my husband and I have been the victim of credit card problems four times. Once was somebody stealing mail, once was actually a mistake by a merchant, once was a stolen wallet, and the most recent was a total mystery (but the thief was rather literate -- he/she charged up $1600 in newspapers and books in one day). We never had to pay a dime directly. Had those been debit cards, we easily would have been out over $10,000.

-- Anonymous, February 20, 2001

I don't use credit cards anymore. Mostly because for a while there no one in their right mind would give me one. I've learned that I never NEED credit. If I want something that bad I can save for it and defer that whole instant gratification thing. I've gotten so good at this that I just paid off almost ALL of my past creditors with my tax returns and I REALLY wanted a new computer. It's weird being almost completely debt free (sans car loan and student loan).

Now I use my debit card for most purchases I can't use cash (i.e. Internet). I read an interesting article regarding just this though (debit vs. credit cards for Internet purchases). The gist of the article is that you should use a credit card for online purchases not a debt card. And their reason seemed sound. A good credit card has purchase protection and if you use it for just online purchases you can track those purchases better. Anyway, I know this is off the original topic a bit but after reading Bubba's post I was wondering if the cards like the one he mentioned has purchase protection? It seems like a great way to go. It's not a line of credit but the world treats it like a credit card. What will they think of next?

-- Anonymous, February 20, 2001

How do you establish a credit history without any major cards? Have any of you who swear off credit cards run into any problems when it came time to apply for a mortgage or whatnot?

-- Anonymous, February 20, 2001

Absolutely, anyone who wants to reduce or eliminate their amount of credit card purchasing is being smart and I applaud those decisions. "Don't listen to Paul and James. They're old, and they have money..." Old? I'm 35. Is that old? Really? :-) Anyway, there was a time (a very long time) when I wasn't old and I had no money. Paying down credit card debt was the number one answer to my very troubling money problems. I got my debt paid off by transfering balances to a card with a better interest rate (or no rate for some length of time) so the interest wasn't murdering me. I stopped using my credit cards for everything I could, paid as much more than the minimum required as often as I could, and finally I was debt free. I am still debt free, and I still use a credit card. So yes, "destroy" your credit cards if that's what it takes to help break the cycle. Routinely spending money you don't have and then carrying what's essentially a damn heavy loan balance is bad. But credit is not evil, credit cards are not evil, and don't forget that money is not an end in itself but a means to an end. Everyone's got his/her own philosopy of money and comfort level with spending and saving and investing. Decide how risk-averse you are and then put your money to work for you if you want more of it, but get spending and credit under control first.

-- Anonymous, February 20, 2001

I am a responsible credit-card holder. My husband is not. I still want a card for emergencies and gas. I finally made him leave his credit card AND debit card at home. Worked like a charm. I know people who have cards, but keep them home in a drawer (or the freezer) only to be pulled out in times of dire need.

Can you get a card with a very low spending limit, like a few hundred dollars, in order to pay those companies who will not take money orders and then leave that card in a safe, secure place? (not your wallet)

Good luck to you, and congratulations on some great decision making.

-- Anonymous, February 20, 2001

Tiger Man would like to thank Paul for agreeing with him on everything except being old. Tiger Man wishes to revise his position: Paul and James aren't old. They were just bragging, when they should have been listening to Marisa's problem.

-- Anonymous, February 20, 2001

We have finally been able to stop using credit cards. However, we still have a lot of credit card debt, not to mention a six figure student loan. My husband's student loan payment is as much as our mortgage. We've paid off some credit cards. What my husband did was pay off the ones with the highest balance and then he takes what would have been the payment for the paid off card and uses it to pay down another card. So while we don't have any extra cash at the end of the month, we are getting are cards paid off slowly but surely.

-- Anonymous, February 20, 2001

Also, watch those credit card offers that come in and switch to the low low rates when you can. The savings on interest can reduce your debt faster. Just watch the time limit (most are low rate for 3 months) and keep switching. You can also contact your current credit card company and ask for a lower rate (they certainly won't not offer it).

And I may be missing something, but unlike Tiger Man I would listen very carefully to someone who is "old and has money" because they probably have been there done that. Wisdom comes from time and experience.

-- Anonymous, February 20, 2001

That should be "will not" instead of "won't not".

-- Anonymous, February 20, 2001

Sharon...that's a valid question, but if you look around you can generally get what you want. Used car dealers will usually carry a note without going to the bank if you can prove you've got a job and you're willing to make a payment in person. Look for homes that offer owner financing with a low down. I paid off a used car and then used it's collateral (title) for a finance company loan on a trailer years ago. I got hosed by the finance company on the interest, but I paid it off fast. Build up equity and real money. Of course, if you want things overnight, or a brand-new car, or the home of your dreams NOW! Dammit! Well, you're probably fucked. I drive fairly new rigs and I've never had to get a heavy loan on a new car because I'm always making a car payment. I'd get one paid off and I traded up. For years I never kept a vehicle that wasn't carrying a note. Some people get a vehicle paid off and drive it to pieces and need another vehicle right away and essentially have nothing to trade. But like the man said: Everyone manages different.

-- Anonymous, February 21, 2001

Don't bow to the pressure to have a credit card; you know your spending habits best, and if you know you'll have a difficult time trying not to max it out, then don't get one. Do whatever you have to do to avoid it.

In the UK, you can set up direct debits or standing orders for accounts, so you can specify what date payments come out with your bank, and they pay it directly to the company. I have my rent set up this way, my water, my council tax and others. I even have a standing order for paying half of my health club fees to a colleague (we joined the club as a couple for the discount, but the fee has to come out of one account, so she set up a direct debit for it to come out of hers, and every month on the 1st, my bank will pay £26 into her bank account from mine to cover my half). Can't you do this in America?

My husband has credit cards, but he purposefully only has a £5000 limit. He spends nearly that much every month on them, but he pays them off at the end of each month, so he doesn't pay any interest. He actually has to tell MBNA not to increase his limit every 12 months; if he didn't, he'd have a £60k limit on his Platinum card. We could buy a few cars on that card!

My only card is my corporate one, and I do occasionally put personal items on it, but only because I know I HAVE to pay the balance of my personal purchases to the company every month (the bill goes to them, they pay it and then I reimburse them for my stuff). Otherwise I'd probably go mad.

-- Anonymous, February 21, 2001

This also reminds me of a guy my Dad knew who owned a chain of petrol stations in Ohio. He tried to check into a hotel without a credit card, and they wouldn't let him. He told the guy that he had enough money in his bank account to buy that hotel, and that if they didn't allow him to pay cash, he'd go elsewhere. They didn't, and he did.

Not to get too Revelations on you, but this does spook me out, how easy it is to assign a number (SSN, NI, NHS, credit cards, whatever) to a person and track them, their earnings, their purchases, etc. A friend of mine went to buy a vacuum cleaner (£250) and was asked for his postal code. He replied that they didn't need it, and was told that they needed it for the guarantee. He told them that no, they didn't, and that he didn't want his information in any more databases than it already was (he's famous here, so that's part of the reason). So rather than not take his postcode, they refused a £250 sale. He went down the road and bought from a German company instead, who happily accepted his money.

-- Anonymous, February 21, 2001

Tiger Man, you can imagine all you want. I've looked through my posts and can't find where I was bragging or ignoring Marisa's problems. I was just giving examples of what has worked for me, how and why, in the hopes that someone else may find the information useful.

-- Anonymous, February 21, 2001

Oh, and one caution about transfering balances to new cards with small or no interest rates: don't do it too often (not more than once at year, tops) because you can be turned down for credit if/when you really need it if you have applied for a lot of credit in a small amount of time. Banks are really picky about this and very conservative.

-- Anonymous, February 21, 2001

Tiger Man can just drop out of 'The Rock's' school of writing while he's reassessing criticizing Paul and anyone else for their financial advice. I don't see Marisa complaining, why should you?

Anyway, when I was in school (I went to college when I turned 30) we were doing some serious living off the credit card. Like, groceries and stuff. We got a line of credit from the bank, and an interest rate of 10 per cent less than the cards, and paid off the cards with that. The amount of interest we saved was phenomenal. I wouldn't recommend getting a LOC just for fun, but if you're paying off debt, and not planning on using any more credit, then I can't say enough happy things. Destroy the cheques they give you with the account, don't set it up to be accessed with your bank card and just pay as much as you can every month.

-- Anonymous, February 21, 2001

Sorry to interrupt (all I know about money is that I need to pay off my credit cards, destroy them, and then save up some cash,) but I just wanted to mention that Tiger Man's school of writing is actually that of Buck Rogers. (It's sort of an inside joke for the people who read my website.)

-- Anonymous, February 21, 2001

I was just giving examples of what has worked for me, how and why, in the hopes that someone else may find the information useful.

Tiger Man thanks Paul for finding where he was bragging when he should have been listening to Marisa's problem.

-- Anonymous, February 21, 2001

Tiger Man, where, exactly, was I bragging?

-- Anonymous, February 21, 2001

Marisa: just want to simplify and be debt free. Any suggestions (sans a debit card)?

James: Marisa, you should be using a credit card for all your purchases/bill paying. Miles, baby, miles.

Paul: Well, that's a good point, James. My wife traveled by air a lot in 2000 and all her miles that she earned via the credit card meant she got to fly business or first class every time, free upgrades.

So at what point in dismissing someone's financial problem should it be considered boasting? When you and James start comparing milage on your Bentleys? Never? When someone gets called Baby? You tell me.

-- Anonymous, February 21, 2001

Dismissing? Boasting? Bragging? Nope, sorry, you're wrong. You can fashion conversations from citations taken out of context all you want, but the fact is that not even once did I dismiss, boast or brag. And I never claimed to have a Bentley.

-- Anonymous, February 21, 2001

Your answer, I take it, would then be never.

-- Anonymous, February 21, 2001

Since there was no dismissing, boasting or bragging, I don't understand how you can presume to take an answer like that.

-- Anonymous, February 21, 2001

Why is it that nearly every forum topic on Gwen's forum ends up with one poster picking apart another poster's word choice, mode of expression, etc.? Before playing mind-reader and bashing another forum participant for their sins, why not clarify with the poster you have a disagreement with what their opinion really is? Can we please play nicely with one another and stop hiding behind the semi- anonymity and beating up on others? Gwen has an excellent journal, we all think she's fab, we all are adults who have the capability of co- existing peacefully with others (or so I hope)...so why not honor her by not making her forum a more congenial place rather than a frickin' battleground in every frickin' topic?

Just a suggestion. Take it or leave it. I mean, trust me on this one: it IS possible to disagree with someone without attacking them or name-calling or judging. We are not all six years old.

Marisa: I only use one card myself, it is a debit card from my checking account. All other cards have been cut up or put on ice. I think your resolve to try and give up the credit cards is admirable. You didn't list checks as an option--have you chosen to avoid a checking account as well? Believe me, I understand if so, because my bank is evil on a stick and they just got sued for dishonest business practices (taking largest checks out of account first--regardless of when they were written/sent to the bank for collection from your account--if you are close to going into overdraft, then bouncing numerous smaller ones, thereby racking up $$$ in bounce fees). Even so, I find having a debit card is useful. It acts like a check, but I can also use it to pay at the pump at gas stations, make purchases online (if I need to), etcetera.

I also have experienced the squint-eye of skepticism and reproach when I tell people I don't like or want credit cards. But it's not their business, it's your business. Do what works for you. If anyone has the audacity to lecture you about how you should conduct your financial business, just remind them that they can do what they like with their money, but until you hire them as an accountant or business manager, you don't need or want their feedback.

But you can say it much nicer than that, of course. If you want to.

-- Anonymous, February 22, 2001

In terms of a retirement fund, have you talked to your benfits coordinator at work? (Whoops - I suppose I should ask if you are using a 401 (k), 403 (b) or you plan to start a Roth IRA or something non-work related.) If you are going through work, and your employer matches or contributes more than your share, you will be doing yourself a great service if you decide to contribute. (eg: for my plan, I only contribute 3%, but my employer puts in 5%.)

-- Anonymous, February 22, 2001

Elena--your employer rocks! Mine (only) matches, not exceeds, the percentage put aside.

-- Anonymous, February 22, 2001

Agreed - it's a sweet deal. You have to work here two years before you can enroll, and I know so many people who let it slide because they don't want to lose the take home pay. It's just a shame to let that kind of opportunity go, though I understand being apprehensive about getting smaller checks now since it's not as if we have money trees in our backyards. Or a backyard, for that matter.

-- Anonymous, February 22, 2001

Having a credit card has a lot of advantages and you don't need to be in debt just for having one. And establishing a retirement fund rocks big time. Wish I would have started one long ago. Then I could drive my Bently to the beach house and My servant Tigerman could bring me a towel to dry off after Pamela Anderson and I went for a surf. My Empolyer matches my percentage though we are limited to 3.5% by state law here for how much we can hide...er...put away for the future. And all "before" taxes. I also put a little(very little after paying tuition on two boys going to college) towards a little nest egg for traveling in my sunset years. But it takes perserverance. And not buying everything you see. So buckle down and quit paying someone elses salary (apr %). James

-- Anonymous, February 22, 2001

Tiger Man's school of writing is actually that of Buck Rogers

Tiger Man writes much better than Leopard Man, but Leopard Man gives you better pedicures. Or so I hear.

-- Anonymous, February 22, 2001

If I put 1% of my income into my pension fund, my employer pays in 3%. If I pay in 2%, they pay in 6%. If I pay in 3%, they pay in 10%. There are actually people in my company who, rather than take advantage of this awesome benefit, decide that they'd rather just take the money home. I think they are very stupid.

-- Anonymous, February 23, 2001

Milla, perhaps Gwen would like to be the one who tells her posters how to act. Perhaps you should let her do so if and when she wishes, and not take it upon yourself to pretend this is your board to moderate.

-- Anonymous, February 23, 2001

And perhaps you should stop hiding behind an anonymous nickname and have the balls to criticize people directly. Until you do so, I will not be interesting in hearing what you have to say.

-- Anonymous, February 23, 2001

Jackie, I'd have to agree that making that sort of decision is being very short-sighted. (I wonder how many of those folks tell themselves that it's just for a short time--i.e., they decide to take home a bigger paycheck at the beginning--and then forget to take advantage of it later? Yikes.)

-- Anonymous, February 23, 2001