Do you want to know the best way to avoid late fees and credit card debt?

Don’t carry any credit cards!

In an interview by the AP, 41-year-old Atlanta resident Paige LeFevre, said “People look at me like I’m an anomaly. But guess what? It’s a whole lot easier when you’re not juggling debt,”   According to the article, the idea of living without credit cards is being given more consideration at a time when Americans hold more than $850 billion in credit card debt, four times as much as in 1990.

I’ll tell you, since closing our mortgage business during the housing bust; my wife and I have made “corrections” to our lifestyle and way of life in general.  We now have a budget that we stick to and have managed to become debt free with the exception of my student loans.  Our cars are paid for and not new.  …my car is a 1950 Chevy, we now shop at Walmart and thrift stores for the boy’s clothes and other things.  We have totally changed how we view and manage money.  The first thing we did however was to get rid of the credit cards.  We do have one credit card that is used for emergencies and if it gets used, all of our efforts go to paying it off.

It would seem that we are not the only people cutting back on the plastic.  Mastercard Inc. and Visa Inc. reported credit card spending was growing at its most anemic pace ever.

It’s concerning that there are a lot of young Americans, barely into adulthood who are saddled with debilitating levels of debt, everyone almost always talks about student loan debt, but there’s a growing trend suggesting that today’s young adults are also drowning in credit-card debt — and that many of them will take this debt to their graves.

More than three-quarters of renters between the ages of 18 and 24 spend more than they earn every month, according to a survey of 1,000 renters (of all ages) by Rent.com. This is the case even though 17% of respondents in that age bracket say they’re willing to live with roommates to save money. (TIME Business)

My wife and I are teaching our boys, 8 and 10 y/o, about money, both saving it and spending it.  They are currently in the middle of learning about buying something on credit.  They have agreed to purchase an old iPod that I refurbished using credit.  They did not have the $40 to purchase the iPod so I have extended them credit in order to make their purchase.

“Why does the $40 iPod now cost me $50?”

In addition to a purchase contract for the iPod, there is a finance agreement complete with payment schedule and a truth in lending disclosure where the boys can see that with the added interest they are paying much more for their iPod by financing it than if they just saved their money and bought it outright.  …this is already turning out to be one of the best lessons yet.  The joy of receiving the iPod immediately has not outweighed the extra money they have to pay by financing it.  I hope this lesson sticks.

We are not naive and understand that you are not able to save for everything, and some things, due to their exorbitant cost, require financing.

…or do they?