Eight Minutes to Financial Success – Minute #2: Cleanse Your Wallet or Purse

This week, The Simple Dollar is running a short series on some of the key moments in my financial turnaround and how you can experience those moments as well. For a full description of this, see the first article in the series.

Those of you who watched the television series Seinfeld are probably familiar with the term “Constanza wallet.” It refers to a wallet that’s ridiculously overstuffed with cards and other paraphernalia; eventually, it explodes at a very inopportune time, sending cards and receipts and other detritus all over the place.

While the idea of a “Constanza wallet” is humorous, the truth of it isn’t so humorous. My own wallet was such a mess for many years. Inside it, one could find multiple bank cards, several credit cards, wads of receipts, and other miscellany.

Of course, what I found is that if I was always carrying all of these cards, I would always have an easy way to buy anything I wanted impulsively. I could just grab the first credit card I found and put whatever item I’d just discovered onto the plastic.

The end result? Big piles of credit card bills, resulting in an overstuffed mailbox to go along with my overstuffed wallet.

Cleanse Your Wallet or Purse
Obviously, one powerful technique to stop such impulsive purchases is to simply make those impulses harder. For me, this is something of a two-step procedure (with the second step occurring tomorrow), but the first step is quite simple.

Dump out your wallet and/or purse. Put one single bank card back into the wallet and/or purse, along with your basic identification and other essential cards.

That’s right, leave all of the other plastic at home when you go out. This way, you don’t have the ability to convince yourself that you can afford the item you’re looking at because you don’t have an array of means to pay for it easily.

It’s far better to leave the house with a single bank card than with credit cards. A bank card puts a limit on your spending that matches the cash you actually have. You cannot buy things on credit – it’s linked straight to your checking account.

Knowing that there’s such a tight limit on your spending makes you think twice about the things you’re thinking about buying.

Here’s an example. Imagine you’re standing in a store looking at a $30 item – it could be clothes, it could be a video game, it could be a bottle of liquor. Whatever it is, you want it but you don’t really need it.

If you have a wallet full of credit cards, you don’t have to think twice about the purchase. You just go buy it, usually on credit.

If you just have a bank card, you have to think about that purchase. Is there enough in my account to swing this purchase without overdrafting my account? Will this make my electric or phone bill payment bounce? Do I really need this item after all?

When you have just one card, you force yourself to think these questions about the purchases you make. You don’t have the luxury to buy such things without thinking about them; instead, by simply emptying out your wallet or purse, you’re making sure that in the future, you’re going to have to think a little more carefully about your purchases. That’s nothing but a good thing.

There’s another huge advantage, too: if you only regularly carry one card, then if you ever lose your wallet or are robbed, there’s only one card to cancel and there’s much less danger of identity theft.

That’s not to say that you shouldn’t have a credit card or two. They can certainly be useful at the right time. The purpose of this is to simply make the credit cards less convenient, which means you have to think more carefully about the purchases you’re making and whether they’re worth putting yourself into debt.

What about that pile of credit cards at home? Tune in tomorrow for a suggestion for putting those in a good place.

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34 thoughts on “Eight Minutes to Financial Success – Minute #2: Cleanse Your Wallet or Purse

  1. valleycat1 says:

    Costanza

  2. Amanda says:

    I currently carry 3 cards in my wallet. My personal bank card, my joint card, and my (medical) flex spending card.

    My only complaint is they are all varying shades of blue.

  3. Johanna says:

    If this system works for you, that’s great – if it ain’t broke, don’t fix it. But it seems to me that in general, if someone has so little self control that they really can’t stop themselves from buying things they can’t afford on credit, the possibility of overdrawing their checking account isn’t necessarily going to be enough of a deterrent. I mean, *I’ve* overdrawn my checking account before, not because I was buying things I couldn’t afford (I had plenty of money in savings), but because I just wasn’t paying enough attention. It’s a very expensive mistake to make.

  4. kristine says:

    Great advice, but I have one debit, one cc, and my med card. The rest is all store cards: Stop and Sop, Borders, Staples, etc. I rarely buy any unplanned purchases, but carrying the 1/2 thick stack of free rewards cards in my purse allows me to pick something on my “to get” list when I happen to be out and find myself near the store, and get my discount. Some store you can just give your e-mail address in lieu, but some not.

    I tried keeping the rewards cards in the car, but then would always realize it at the register, and not want to hold up the line to go get it. So my purse is full, but it is only 4 x 4 x 8 inches!

  5. Julie says:

    The cards that are in my wallet right now:
    - 1 bank card
    - 1 credit card (I think I’ve only ever used it for online purchases, but it’s handy just in case somewhere doesn’t accept bank cards)
    - medical insurance card (also useful as photo ID)
    - “mediprint” card (contains all my relevant medical information on a single card, in case I’m unconscious and can’t convey it to paramedics)
    - driver’s license
    - CAA card (Canadian equivalent of AAA)
    - bus pass (I take public transit daily)
    - library card (I’m there at least once a week)
    - grocery store points card (I’m there at least twice a week)

    So… yes, it’s nine cards, but I don’t really see any way of paring it down, except maybe the library card (which I’m certain I’d forget it if it wasn’t in my wallet). Despite the driver’s license, I don’t drive often and don’t have a car to leave my cards in.

    Incidentally, I agree with Johanna (#3) — if you’re the sort of person who overspends with a credit card, I’m not sure bringing a bank card is the solution.

  6. Gretchen says:

    Isn’t rule number one don’t just go randomly into stores and look at bottles of liquor (???) or video games?

  7. chuck says:

    i’m guessing you’re going to suggest freezing your credit cards in ice tomorrow!

  8. Tracy says:

    I’m with Johanna on this one. I can’t imagine that having only one card versus 14 will make that one card less tempting to use if you ‘want’ something. Switching to cash only would probably work better.

  9. KC says:

    Whenever I go on vacation I purge my wallet. No need for a Belk card (regional department store) if I’m going to LA where they dont’ have Belks. They have Costco, but am I going to go to one? Whatever I can lighten my load goes out of the wallet. My biggest concern is theft (or loss) of my wallet. As you said its one less thing to cancel if you aren’t using it.

    I also occasionally take a photocopy of everything in my wallet – front and back – so I’ll know what to cancel if I do lose my wallet.

  10. Luke G. says:

    @kristine (#4)

    If you have an Android/iPhone/iPod Touch, you may want to look into some of the apps available which allow you to keep the barcodes for your rewards/loyalty cards on the device. It allows the clerk to scan the barcode on your phone’s screen!

    I’ve read reviews of persons who had problems at times with getting their screen to scan, but it may at least be worth looking into!

  11. dot says:

    Trent, I really like your advise about carrying only one bank card and no credit card.
    For a year or so I have been debating about getting rid of ALL our Credit Cards… as in closing ALL of them forever. It seems like it would be a very liberating way to free up a lot of clutter in our life an simplify even more… and possible stop alot of junk mail.
    We never carry a balance are in our mid 50′s and will never need to finance a car or house again. The only reason I use the credit cards are for the rewards, however as good as the rewards my be at times I spend A LOT of time and effort coordinating the points, rewards, perks, cash back
    sky miles accounts, membership rewards accounts, linking this account to that account etc.
    As soon as I finish this I am going to clean out my purse and spend the next few months, year ??? with just a bank card and see if the personal rewards of simplifying our life are worth the credit hit (currently 800+) and that darn rental car problem.

  12. Tahlia42 says:

    The problem with carrying your bank card is you don’t have the same level of protection against theft. Recently I had someone steal my credit card information (evidently some unethical person swiped it and cloned it) and were racking up a great deal of charges in brick and mortar stores while the card was sitting at home with me. Fortunately for me it wasn’t my bank card where I would forever be out the money. Instead, American Express figured out it was fraud and CONTACTED ME! I wasn’t liable for any of the charges made, and they treated me really well.

  13. Des says:

    @12 – That is a VERY common misconception. If your bank card has the Visa or Mastercard logo (and I haven’t seen one in this millennium that didn’t) it has the same fraud protection as a credit card. The only time the protections differ is when you use your PIN at the register rather than signing for the purchase. So, as long as you don’t write your PIN on the card, you will receive the same protections.

    RE: Overdrawing – I have half a dozen checking accounts and ALL of them offer some type of overdraft line of credit. If I overdraw checking, it will pull the funds from the LOC and charge interest rather than a fee ($0.15-ish a day vs. $35). I am always boggled when people talk about getting overdraft fees STILL – what bank/CU doesn’t offer overdraft LOC (or, connect to savings account)? I have yet to encounter one.

  14. Jules says:

    I had, at one point, three credit cards. I allowed all of them to expire in their own good time; I never even used one of them–it kept tucked inside one of my books as an “in case of emergency” card.

    I also had my wallet stolen, and the thief racked up a few hundred dollars’ worth of groceries (I assume? the credit card company said it was used mostly at a PathMark and a car wash, and my debit card was used at another shop). The bank and the credit card company were really good about it and never charged me for any of it. Of course, this was back in the day when such things as “customer service” still existed (2007).

  15. Johanna says:

    @Des: Well, in my case, the last time I overdrew my checking account was probably 8 or 9 years ago. I was a lot less savvy about financial matters then than I am now. When I’d opened the account (another 7 or 8 years before that), it had a reasonable overdraft protection (an automatic transfer from the savings account, plus a small fee). Then, at some point, the bank changed their overdraft policy to include the larger fee, and either I missed the memo entirely, or else I saw the memo, didn’t realize it might be worth it for me to ask for a better deal, and figured it didn’t really matter anyway since I never overdrew my account. Which I didn’t. Until I did.

    Anyway, linking your checking account to a line of credit with a reasonable interest rate may be a smart thing to do in some circumstances, but it also negates the very advantage Trent’s talking about here (the inability to spend money you don’t have). I think this all goes to show that there’s not really a “one size fits all” solution here – you have to figure out what setup is best for you, based on your own money weaknesses.

  16. Riki says:

    I agree with several other comments — if a person has so little self control that having easy access to credit cards mean they spend recklessly, there’s a much bigger issue at play than simply needing a cleaner wallet.

    I carry two credit cards, my debit card, various health cards, and a couple of rewards cards. I like to make as many purchases with my debit card as possible because it gives me an itemized list of every penny spent. I tend to fritter away cash, so the debit card system works better for me.

  17. Julie says:

    I had to laugh at this article because this is my husband’s wallet to a T! He’s got overflowing receipts, old cards, new cards, everything but the bathroom toilet in there, and he only cleans it out maybe once a month, if that. Having said that, he only carries our personal account bank card, his business bank card, and I think a credit card I’ve told him not to use (and he hasn’t!) while we get the balance down. Preferably to zero.

  18. Leah says:

    @13, the last time I overdrew my checking account was 6 or 7 years ago. I had a “overdraft line of protection” or something (basically, they bring money over from my savings account). And then I still got charged the overdraft fee of $35! I think the way you have it is the way banks should do it, but everyone I know still has to pay a fee even if the bank takes care of the overdraft in some way.

    I agree with those who say that not shopping is likely far more effective. The self-control issue should be nipped in the bud at even going into the store. To put another way: say you have problems with eating ice cream at night. You eat a big bowl every night and can’t lose weight. You wouldn’t limit yourself to one bowl and one spoon in the cupboard — you’d stop yourself at the store by not buying any ice cream to even bring home. In the same way, if you have problems overspending at the book/video game/whatever store, you need to not go in the store (or not go in that part of the store if you shop at Target/Walmart/etc).

  19. WhiteCedar says:

    Sometimes it might make sense to carry more than a single bank card. If I blow out a tire, I want to be sure that I can replace it and get back on the road without worrying if my mortgage payment is in jeopardy. When I get home, of course, I’ll pay off that amount from my emergency fund.

    Occasionally, for reasons unrelated to the amount of funds in the account, bank cards will fail to complete a transaction. (Network problems and system maintenance are usually the supplied answers.) When you’ve been standing in the grocery line for 20 minutes, or need gas to get the 100 miles back home, it’s convenient to have a back up card that will work. Always provided that you restore the account afterward.

  20. zoe says:

    well, no. credit cards aren’t evil. There’s some “decluttering” value to this article, but for people who responsibly use credit cards, this advice could easily harm their finances rather than improving them.

    1) as others have said, if you can’t control yourself with a credit card you (usually) won’t be able to control yourself with a debit card. Stay out of the stores if you have self-control issues.

    2) debit cards can get canceled by the bank for suspicious activity (as with credit cards), leaving you helpless in case of emergencies

    3) many people don’t keep much money in their debit accounts, for good reason. if an expensive emergency comes up, you’re helpless.

    4)credit cards are covered for fraud, debit cards often aren’t (I don’t know anyone who has a visa/MC logo on their debit card in my area).

    5) credit cards often have rewards, debit cards generally don’t. Often credit cards will have extra rewards at their “home” store, giving a benefit to carrying multiple cards.

    6) unless you carry all your credit cards nearly maxed out and have low credit limit on each one, carrying one credit card is just as “dangerous” as carrying 5.

    7) sometimes bank networks will go down. This happened to me once back when I was a cashier, and debit cards from a couple banks wouldn’t work.

    8) credit cards are generally more widely-accepted than debit cards, with some exceptions.

    These reasons are why I always, always carry 1 credit card AND 1 debit card. Ideally you’d carry a bit of cash, too.

  21. Interested Reader says:

    I thought debit cards had to be backed by Visa, Mastercard or something otherwise they were just ATM cards.

    I know my dad had an ATM card for the longest time and he could use it limited places – like the grocery store.

    I have a Visa backed debit card through my local bank and I know that lots of people have it (the card is distinctive so you can tell just by looking what it is). There’s also a rewards program, although it’s not a cash back program.

  22. Jonathan says:

    George: I need everything in there.

    Jerry: Irish money?
    George: I might go there.
    Jerry: Show this card at any participating Orlando-area Exxon station…to get your free ‘Save the Tiger’ poster.

    Classic!

  23. Andrea says:

    Well, Chuck at #7 got it in one.

  24. Johanna says:

    @Andrea: But it’s not tomorrow yet! (Well, I guess it is in Australia…)

  25. maria says:

    Chuck… I laughed out loud when I read this afternoon’s post…. too funny.

  26. Kathy F says:

    I have a load of cards in my wallet, but I find that I may need one and won’t have it if I purge too much. I use several rewards credit cards and I may use a different one in a certain month for a particular purchase depending on when that category of spending gets the 5% cashback. I also have several debit cards. Two I use regularly for small purchases so I can earn high interest on the checking accoutns. I am required to make so many debit purchases a month to get the interest rate. One is local with my credit union and I use to get cash occassionally. All the debit cards have the VISA Logo on them. I made photocopies of the front and back of the cards in my wallet in case I lose them and need to cancel. I don’t like carrying a lot of cards but I find it convenient and it earns me money when I do spend. I do consider all my purchases carefully beforehand. Then of course I have various supermarket and drugstore discount cards. If you don’t have those readily available, you don’t get the savings when you buy, so those save me money.

  27. Des says:

    @Johanna – That is very true that attaching your debit card to a credit line would defeat Trent’s purpose. To be perfectly honest, I’ve taken to skipping straight to the comments here at SD rather than reading Trent’s writing, after many ill-researched and flippant posts. I will go back to reading the posts before commenting…but the comments are really the only reason I still come here.

  28. Tamara says:

    my debit card is NOT a visa debit or MC debit. It is a bank issued debit card. in Canada banking systems are much different and every bank and credit union issues their own debit card that works on the interac system. ALL stores accept bank debit cards, not just a small few as Interested Reader suggested was the case with an ATM card. the purchase is automatically withdrawn from the bank account. there is NO protection if your card is stolen and someone figures out your PIN. That is much different than credit cards. I use my debit for everything, but am thinking of switching to pure credit so that I can earn the 1% – 2% cash back on purchases and transfer the money right away to pay for the purchases.

  29. kristine says:

    Check- you pegged it!

  30. kristine says:

    Chuck- you pegged it!

  31. deRuiter says:

    Better not to carry too many credit cards because of the new “credit card number readers” which are available as easily as ebay for around $100. These allow a person standing near you on the street, in a store, at the bank, to “read” / “harvest” the numbers on your credit cards, and any other cards with your information on them. It’s scary, and it works flawlessly for the thief. Easy to solve though, buy a metal card case, or if you’re thrifty like me, wrap cards in a bit of aluminum foil, and they can’t be read.

  32. Interested Reader says:

    @28 – I don’t live in Canada so I was refering to the American system which is obviously different.

  33. Karen says:

    @ deRuiter #31 – thanks for the advise about the foil – cheaper than a metal card case but I think I do have one laying around somewheres

  34. SLCCOM says:

    Dot, if you cancel all your credit cards you will almost certainly live to regret it. If there is a family emergency, you’ll need it for quick airline tickets and car rental. If you use a debit card to rent a car, they will freeze your bank account to the level of what it costs to replace the car, or at least to a level where your checking account will be functionally useless. I’m not sure, but I believe that eventually you’ll end up without a credit record, as the old accounts drop out of your record. Then what will you do if you need credit in a hurry?

    There is no reason to use them at all, except for once or twice a year to keep them active, if tracking rewards is such a pain. But don’t cancel them!

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