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"  You know the drill: You get your credit card bill in the mail, send off a check for the minimum payment \u2014 maybe a few bucks more \u2014 and then whip your card out again for everything from your morning latte to your minivan tune-up. When your bill arrives a month later, your balance has barely budged.  For most of us, it&amp;#039;s a familiar \u2014 and frustrating \u2014 scenario. Seventy-three percent of U.S. households use at least one credit card, and roughly half carry a balance, with a median debt of $3,000, according to the Federal Reserve&amp;#039;s 2007 Survey of Consumer Finances (the most recent data available). But what if you were part of that other 27 percent? The folks who manage to buy computers, book plane tickets, and bring home groceries without ever pulling out the plastic?  Given our scary economic climate, kicking the credit habit is looking smarter every day. After all, when money is tight and job losses are mounting, who wouldn&amp;#039;t want to free up that extra $100 or so that gets earmarked for Visa, MasterCard, or Macy&amp;#039;s each month? Not using credit cards can even save you money: People actually tend to spend more when they pay with credit cards and gift certificates, according to a recent study published by the American Psychological Association, whereas parting with cold, hard cash makes us think more carefully about what we&amp;#039;re buying.  For the women on these pages, putting away the plastic for good didn&amp;#039;t only mean breaking the debt cycle; it also meant shedding a lot of financial stress and learning to live very happily within their means. Here&amp;#039;s how they did it \u2014 and how you can too.  STICKING TO A STRICT BUDGET Lynnae McCoy, 37 Blogger and stay-at-home mom  Central Point, OR  Married with 2 children &amp;quot;Life is more simple, and simple is less stressful.&amp;quot; \u2014 Lynnae McCoy I got a credit card my first week in college and graduated with $4,000 in debt. When I got married, my husband and I would pay down our debt, then charge it back up again. But two years ago, we made a commitment to get out of debt \u2014 we had given our word that we would repay what we owed, and as Christians, we needed to stay true to our word. Then Jim lost his job. With an unemployment check as our only source of income, it was easy to see how quickly our credit card debt could eat up our savings and leave us on the verge of bankruptcy. So I threw our cards into a Tupperware container with water and stuck it in the back of the freezer. I figured if they were hard to get to, I wouldn&amp;#039;t be tempted. I even started a blog, beingfrugal.net, to help hold me accountable to our goal of getting out of debt. We had already consolidated all of our debt onto a card with zero-percent interest, but a late payment raised the interest rate. I thought, This just isn&amp;#039;t worth it. It&amp;#039;d be better to pay cash and not have to deal with these companies. So in January 2008, we unfroze our cards and cut them up. For so long, we&amp;#039;d had the mind-set of, If there&amp;#039;s an emergency, we can fall back on the credit card, but some of our &amp;quot;emergencies&amp;quot; weren&amp;#039;t true emergencies at all. We used to consider Christmas an emergency! I now look at money as a finite resource, and in a strange way, that makes me feel calmer about it, because I&amp;#039;m not banking on tomorrow to pay for today. I use budgeting software to keep track of all our spending, and either I can afford something or I can&amp;#039;t. It makes life a lot more simple, and I&amp;#039;m finding that simple is less stressful. I tend to spend more if I have cash on me, so I use my debit card for pretty much everything \u2014 that way I actually spend a little less because I get nervous when my bank balance gets too low! I&amp;#039;ve cut down on my impulse spending, I buy more things on sale, and I say &amp;quot;no&amp;quot; a lot more now. Last year I really wanted to get my kids a Wii for Christmas, but it wasn&amp;#039;t in the budget. This year we saved up for it and paid cash. It felt fantastic knowing that we weren&amp;#039;t going to get a bill in January! CELEBRATING LIFE WITHOUT DEBT Amy Allen Clark, 31 Founder of MomAdvice.com  Granger, IN  Married with 2 children  &amp;quot;Paying off our debts was something for the whole family to celebrate.&amp;quot; \u2014 Amy Allen Clark We stopped using credit cards five years ago and finally paid them off last year. There was no joy in the nearly $13,000 of debt that we had accumulated; it wasn&amp;#039;t from some grand shopping trip or anything. Our debt came from my husband&amp;#039;s being unemployed for a year, our move from Massachusetts to Indiana, and the adjustment to one income. We were just trying to make ends meet.  Making our monthly credit card payments was beyond stressful. Our minimum payment was $225, and we were paying 21-percent interest! It felt like such a waste to me. I didn&amp;#039;t want to carry around the burden of owing money to others, and I wanted to improve our financial future. We were able to transfer our balance to a card with a 3.9-percent interest rate, but we didn&amp;#039;t add to our balance. We put the cards in a drawer \u2014 and never used them again. I read  The Complete Cheapskate by Mary Hunt and started snowballing our debt \u2014 you pay the minimum on all of your cards and then roll the payment from the smallest debt, once it&amp;#039;s paid off, into the next smallest one. We also quickly cut out extra spending like dining out, lowered our satellite TV package, and paid only cash for groceries.  When we were finally able to pay our credit card debt off last spring, it was a joyous thing for us, and we commemorated being debt-free with a family party. We used Monopoly money as a centerpiece so our son could see what we had paid, and we talked to our kids about how we&amp;#039;d paid off our credit cards. We did the same thing when we paid off our car loans and had a Cars-themed party; it was something for the whole family to celebrate. We wanted to show our children that credit cards are not a good thing \u2014 and that Mommy and Daddy had a hard time but were able to overcome it.  We don&amp;#039;t buy anything with credit anymore. We have automated all our monthly bills with a free service called CheckFree. For things like groceries and entertainment spending, I pay cash because it keeps me on budget; I use my debit card if we have to book a trip. And I shop at online rewards sites like ebates.com so that we get a percentage of our purchase back, just like with some credit cards. PAYING CASH FOR EVERY PURCHASE Kim Frye, 40 Attorney  Marietta, GA  Married with 2 children &amp;quot;My husband and I are finally on the same page about our money; we&amp;#039;re so much closer.&amp;quot; \u2014 Kim Frye We stopped using credit cards cold turkey in May 2007. At the time, my sons wanted to be in an acting competition that was very expensive, and I knew we didn&amp;#039;t have the funds for it. In looking for a way to come up with the money, I happened upon Dave Ramsey&amp;#039;s  Total Money Makeover book. It inspired us to take baby steps toward paying off our debt, and the first step was to create a written budget. After four months of keeping track of our spending, we realized how much we were living beyond our means.  Five months later, we cut our credit cards up with scissors. We didn&amp;#039;t want to do it at first, but we knew that we were holding on to the cards as a crutch. We thought, If we&amp;#039;re truly committed to being debt-free, let&amp;#039;s take a leap of faith and cut up the cards.  Now every dollar in our budget is assigned to a specific category and a corresponding cash envelope. I use about 12 cash envelopes to pay for things like gas, groceries, and child care. Using cash has changed how we do a lot of things \u2014 when you are paying cash, you spend less, and when the money&amp;#039;s gone, it&amp;#039;s gone. It&amp;#039;s been a learning process. We started out with about seven or eight envelopes and then added more. We added a Costco envelope and a Gifts envelope. I also added a Hair/Nails envelope, so I don&amp;#039;t have to think, Oh, gosh, where am I going to get the money to do my hair this month? We readjust the amounts in each envelope as necessary. For instance, when gas was so expensive last summer, we had to add to that envelope, which meant taking cash away from another one. Over time, we&amp;#039;ve figured out what works for our life and our needs. The coolest thing about taking control of our finances is that my husband and I are finally on the same page as far as our money goes. Before, he didn&amp;#039;t really pay much attention to how much a gallon of gas was or whether an ATM charged a fee; he abdicated that responsibility to me, and that was a lot of pressure in a marriage. Now we&amp;#039;re partners so much more than we were before. We both know exactly how much we have, and we make decisions together. Our marriage is so much closer. SHOPPING SMARTER Vicky Johnson, 40 Event planner  Washington, DC  Married with 1 child and 3 stepchildren  &amp;quot;It&amp;#039;s liberating to know exactly what we can and can&amp;#039;t do.&amp;quot;\u2014Vicky Johnson I went credit card-less in 1998 and have never looked back. I paid off everything I owed before I bought my first house, and once I didn&amp;#039;t have the debt, I worked to keep it that way. It was piddly debt \u2014 less than $3,000 \u2014 but it was constant. My philosophy was &amp;quot;Just put it on the credit card,&amp;quot; whether it was a pair of jeans, lunch, or a sofa. But eventually, I realized that when I charged things, it was more about convenience in the moment rather than the inability to pay cash for it. And once I looked at how much was truly going out the door \u2014 especially in interest payments \u2014 my whole mind-set about my finances changed.  My shopping habits are different now; I&amp;#039;m not as much of an instant-gratification person. I have no problem hunting for great deals: I can wait two weeks for a pair of shoes to go on sale, or I&amp;#039;ll ask if a store can still honor the price from a sale that ended. You&amp;#039;d be surprised how often salespeople will say yes if you ask. And I always sign up for stores&amp;#039; discount programs. If I need to make a major purchase, I&amp;#039;ll move money out of my savings account and into checking and then pay for it using my debit card. The debit card is golden. I tend not to use cash unless I have to \u2014 for me it seems a $20 bill is gone in minutes. Not using credit cards requires planning. I watch how my event-planning business trends, and I budget for expenses rather than just let things happen. If my husband and I want to take a vacation, we think about it early and start saving, while keeping an eye out for discounts and specials to get the best deal. The benefit is that we know the money is there; we don&amp;#039;t put it on a credit card and end up having a $1,000 vacation cost $4,000 by the time we&amp;#039;re done. I have friends who&amp;#039;ve had their credit limits cut, and they&amp;#039;re worrying about it, not sleeping. I don&amp;#039;t have those worries. I don&amp;#039;t have creditors calling my house about a delinquent bill; I don&amp;#039;t have to look at a statement and see a balance that isn&amp;#039;t moving. I know what we can and can&amp;#039;t do. And it&amp;#039;s liberating to know that with everything else going on in the world, credit issues are not my burden. It&amp;#039;s one less thing for me to be concerned about. Could You Lose Your Credit? In recent decades, easy credit has come to feel like a universal right. But with nearly 60 percent of creditors tightening lending standards (including lowering credit limits and raising interest rates and fees), &amp;quot;charging it&amp;quot; may become a luxury fewer of us can afford.  Why is credit drying up? With banks facing huge losses from the mortgage meltdown, they&amp;#039;re more cautious about lending money for homes, cars, student loans, and even credit cards, explains Ben Woolsey of CreditCards.com, a credit card marketplace and comparison website. The silver lining to this dark credit cloud is that the Fed has approved new regulations (to take effect in July 2010) designed to protect you from questionable credit practices of the past, which often resulted in unexpected interest charges and rate hikes. New rules also require lenders to give consumers at least 21 days from the time their bill arrives until payment is due. Still, cards will likely be more expensive to use, Woolsey says, because of higher interest rates and the return of annual fees. This might not be such a bad change. &amp;quot;One effect of so much cheap credit is people look at it as part of their income and spend beyond their means,&amp;quot; he says. &amp;quot;These changes might make people think twice before they use credit cards.&amp;quot; To keep your credit from shrinking, pay all bills on time and routinely check your credit report at freecreditreport.com. "^^<http://www.w3.org/2001/XMLSchema#string>
<http://www.redbookmag.com/life/money-career/advice/a4826/pay-off-debt/>