No more credit -- or debt
No more credit — or debt

Americans are using credit cards less and paying down debt, but some Bankrate readers aren’t satisfied with taking a few steps to reduce their reliance on credit. They want to eliminate it from their financial lives entirely.

Some are forgoing credit by choice. Others are being pushed into it. “It’s simple. These days, I don’t have any choice,” says Gregg, a Bankrate reader from Springfield, Mo.

He is just one of many of our readers who responded when we asked them to share their stories about giving up credit — and debt. Here are a few of tales of living off the credit grid.

Save leftover cash

Save leftover cash

“I’ve just recently joined the cash-only movement, but I still had cash in my wallet when I got my next paycheck, plus I still had more than $100 in the bank. That was a first for both!

“I’m going to start putting the money I have left over from the current pay period into savings the next pay period. If I keep this up, I could have approximately $1,300 in additional money in savings just by paying cash for everything. Pretty good incentive, but I think this only works for people who are too cheap to spend cash. I hold on to cash pretty tightly.”

— Sandi, Sacramento, Calif.

Don’t spend money that you don’t have

Don't spend money that you don't have

“I do use credit cards and I have four that I use sparingly — two MasterCards, one Discover and one American Express. But I look at credit cards as loan cards, because that’s exactly what they are.

“Even when I use the credit cards, I already have the cash to pay for the item or service. I use them to build my credit profile. Don’t spend money that you don’t have. Period. Don’t count on expected future funds to cover what you are buying now. This is exactly what happens to many people who get themselves into trouble waiting on a lawsuit settlement, a refund from the IRS, etc. Simply don’t spend money that you don’t have.

“In the old days, you had no choice but to follow this rule. If you wanted to purchase an item/service, then you had to save for it until you had the full amount. The problem now is that there are too many irresponsible individuals with credit cards. These cards are not meant for just anyone to possess. Maybe the banks/credit companies should develop an examination that has to be passed before issuing their cards to consumers.”

— Alonzo, Washington, D.C.

Live under your means — not within them

Live under your means -- not within them

“After my divorce, I had to crack down on spending and make an about-face on the reckless spending patterns of the previous 30 years. At the time of my divorce, my credit score was 485.

“Within the past five years, I was able to boost my income, cut back my expenses, and with a single refinance, pay off all my debt. Today my credit score is 710, and other than my mortgage, I have no debt!

“I pay cash for everything. My new motto is: Live under my means — not within them.

“I’m actually managing my finances with the same basic expenses as when we were a two-income family, only now it’s just me. And I’m covering everything and able to save as well.

“My life is simpler, less stressful and more fulfilling when not tied to debt or the pressure to have more, more — and did I mention — more?”

— Giovanna, El Cajon, Calif.

Do your research and save

Do your research and save

“We budget and save for things. When my husband was laid off for 15 months, we had our emergency fund in place, and we still added to our home improvement fund and our car fund. We have different savings accounts for our funds. In my husband’s unemployed period, we never touched our emergency fund. We held onto our car fund savings, but we used our home improvement fund for a new roof and a new backyard fence.

“How could we afford to pay cash? In addition to saving, my husband gets several estimates to get the best deal on home improvements. And, my husband works along with the contractors to save money on labor.

“As for our cars, we never buy new. We buy used cars. As with any big-ticket items, I always start with Consumer Reports to research quality or ‘best buys.’ Then, I research private sales. I check values on sites like Kelley Blue Book and Edmunds. When I see a good private sale prospect in the online classifieds, I check with Carfax so I know I am getting a well-maintained vehicle.

“This is how we live. We save for our goals, and we research good values.”

— Phebe, Lynnwood, Wash.

Use the envelope system to save

Use the envelope system to save

“As everyone knows, this economy is for the birds! But one thing it has reminded me of is what my father told me years ago: Create an envelope for rent, gas, groceries, etc. When you run out, you run out.

“Working on a cash-only basis has basically recalled those days. And also, do I really need the items I am looking at? I am no longer the gatherer. How many pairs of shoes do I really need? We should have done more of this, years ago. We have been hit like many others. We lost (our) savings and 401(k), and are looking at renting for the rest of our lives. My fear (is that) at 85 my landlord (will tell) me he wants to sell the house he is renting us, and we’ll have to move. Not something I would want to do at that age.

“We save everything we can put our fingers on. We save for any big-ticket items, which are few. We hope the cars will last a long time. … It could be worse.

“Neither of us has given up. We keep trying to find avenues to earn income and some things are working.”

— Barbara, Suwanee, Ga.

Eat at home or at the ‘early bird’

Eat at home or at the 'early bird'

“My family and I are on a mission not to use any of our credit cards. If we do not have the cash, we do not buy.

“Some of the things we are doing are:

  • Eating at home more often. It’s amazing what a pound of lean ground beef and a box of pasta can do. It goes a long way toward feeding a family of four, sometimes even six if I count both my sons-in-law.
  • We go to the local grocery stores that have the DVD rentals and rent a movie for $1, and have movie night at home with microwave popcorn.
  • When planning to eat out, look at your weekly paper and hometown fliers. Many local restaurants are sending coupons for deals like ‘buy one entree, get second entree for free.’
  • Also when eating out, check out the “early bird” specials and the times. My husband and I went to a local Italian restaurant on a Sunday before 6 p.m. and had a great meal for two for under $20.”

— Maria, Plantation, Fla.

Additional resources

Additional resources

For more ways to reduce debt and forgo credit, check out these stories at Bankrate.com:

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