Credit Cards, Credit Scores, Debt-Free Living

Thank you Mrs. C for the heads-up on the credit score. I did some research this morning and found that you are partially correct.

Cancelling credit cards can lower your credit score, if....

• the card is long standing say more than 10 years
• there is a balance on the card
• several cards are cancelled all at the same time

We were told by the mortgage company 4 years ago that we had an outstanding credit score. I am actually more concerned about getting another late payment comment on my credit score than having a note saying customer canceled card. We have cancelled cards in the past and apparently it has not hurt us.

Hubby made the decision yesterday that we would indeed be cancelling all credit cards in the near future. We have 3 major credit cards and one store card. Only one of these carries a balance, which was a same as cash deal that will be paid off in February. One of these can be cancelled immediately as it was never actually activated, but was used last year for a balance transfer to "pay off" a same as cash deal. It was paid within a couple of months and never used again. The other card needs to have some monthly bills taken off and transferred to a debit card.

We do not intent to take out any more loans or use credit cards any longer. We are going to put our faith in the Lord with patience and trust when we need something. Thinking back on our credit card use, it was never used for emergencies, but rather for splurges or times when we didn't want to wait to save the money.

I need to do a little more research, but apparently a debit card can be used anywhere a credit card can. For instance, monthly payments for internet use, or for purchasing something on the internet. Many companies are also starting to accept paypal, which is great for me because I always have money in my paypal account from my business.

We will not be without emergency money. The cards will not all be canceled until we have at least $1000 saved, which will be shortly.

If at any time we find we need to borrow money, our payment history on our mortgage should be sufficient. We also have plenty of collateral. We also do not intend to immediately go to a bank if we need money. Hubby's mom has loaned to us in the past, and I'm sure would not hesitate to in the future if a need arose. I also think asking family is harder than going to a bank and borrowing money or getting a credit card, because it is more "personal" and you have to do more "explaining". We also could sell some of the "wants" we have accumulated over the years. We are not without options.

We no longer wish to be servants to our lenders. as Proverbs 22:7 says, "The rich ruleth over the poor, and the borrower is servant to the lender". Rather we would rather serve our brothers and sisters in love.

Blessings,

~Stella