5 Tips for Living Without Credit Cards

We currently live in a credit-driven society. In light of a struggling economy, it is common for people living paycheck to paycheck to carelessly whip out a credit card to pay for such necessities as bills, groceries and gas for the car.

Credit cards are also frequently used for impulse buying and needless purchases, such as clothing, restaurant meals and movies. Unfortunately, reality often doesn’t hit until the bill arrives, and you realize that not only have you over-spent, you now owe a large finance charge as well, creating more debt.

The first step is to pay credit cards off as soon as possible. If you are tired of this vicious cycle, here are five ways you can learn to live without credit cards.

1. Start an Emergency Savings Account

Many consumers wouldn’t think of living without a credit card to fall back on in case of emergencies, such as car repairs or a leaky roof. But, think of the monthly payments you are currently applying to large credit card balances and finance charges. Minimum payments on two or three credit cards can easily top three hundred dollars per month. If you put this money into an interest-bearing savings account, you will soon have a large emergency fund, and give up relying on credit cards for emergencies.

2. Form a Workable Budget

If you don’t know exactly where your money is going, it is easy to over-spend, leaving you short at the end of the month and more likely to use credit cards to fill in the gaps. Putting a good budget into use can help you cut out needless spending. Write down your monthly income and subtract necessary expenditures, such as mortgage, groceries, bills and savings. Whatever you have left is your disposable income. Then you will know exactly how much you have left. Revise your budget monthly, allowing for unexpected expenses, such as vacations or birthday gifts. It’s that simple.

3. Use a debit card instead of credit.

Most people have a debit card attached to their checking account. A debit card with a major logo, such as Visa or Mastercard, can be used anywhere a credit card is accepted. Conveniences a debit card can offer include: hotel reservations, travel expenses, and bill payments. You pay no interest, and the money comes out of your checking account immediately, keeping you from spending money you don’t have.

4. Use services like Amazon and Paypal to do your online shopping.

Debit cards work online, however, you may not want to make your account number available to websites you don’t know are secure. With Amazon and Paypal, you can add money straight from your bank account, and use it for purchases at a wide variety of online stores. The plus is that you can only spend what you have, no more.

5. Learn to Live Frugally

It will be hard to give up the luxuries and conveniences you are used to, but living frugally can help you maintain the freedom you have achieved by giving up credit cards. Try couponing to save on groceries, carpool to work for gas savings and purchase clothes from second-hand stores. Save errand running until you have several within close proximity to each other. Soon, you will be proud of the way you are saving!

Even in a society that relies largely on credit cards, you can live life free from the hassles and headaches of credit card debt and it’s consequences. All it takes is good planning and willpower. So, stop letting credit card debt weigh you down, and start living with the freedom that debt-free living offers. You won’t regret it!

This article was written by Darci Togesen, author and contributor at Best Credit Repair Companies where she covers more topics relating to debt, personal finance, and credit repair.

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1 Comment for “5 Tips for Living Without Credit Cards”

  1. Atsumi

    Lenders are like scared ltitle kids they rely on what everyone is telling them, and your credit report says it all. If you were to lend me $50 and I never paid you back will you ever lend me money again? What if I tell all my friends will they lend you money? Your credit report conveys this information, faster than girls spread cooties.If you have negative items, contact the people you owe and tell them you are willing to settle on the debt (offer them 40% of what is owed) create a letter for them to sign off on that states you want all negative items removed from your credit report and a letter stating that everything was PAID IN FULL (not settled, or settled as agreed). Once you settle, contest the listings on your credit report with all the credit bureaus:Equifax, Experian, and TransUnion. Then begin to pay large amounts toward your active credit cards NEVER spend more than 40% of the credit available (if your credit limit is $1,000 dont go over $400 on the card). always pay your bills on time (not late) then it takes time and you should begin to see your credit score rise 35% of your score is debt to income (what you have borrow vs what you are allowed to borrow)35% is payment history (something you need to get cleared up)10% length of credit history (so dont close accounts you have paid off)Hope that helps