Introduction:Many Americans are in debt, and owe a lot of money on their credit cards. It can be a challenge to go without them, if you're not used to it. We haven't had credit cards in about seven years or so. If you want to live without credit cards, here are my top tips:
This is probably the most obvious way to live without using a credit card. For some people, this could take a little getting used to. You might not be able to buy the item that you want at the exact moment that you want to. You'll appreciate it when the bill comes due.
One important way to live without credit cards is to plan your expenses ahead of time. Make sure that you have enough money to pay for your important bills before you pay for anything else.
We get paid most of our money a few times a year, so we have to be very careful with this. You may want to use a spreadsheet program to help out with this.
Without a credit card, you'll have to either use cash or a debit card to pay for expenses. Debit cards can pay for almost anything you want to, so it's usually not limiting. Because debit cards sometimes put a hold on your money, you might not want to let your account go down to zero.
If you want to live without credit cards, you might want to set up an emergency fund. Without it, if you happen to run out of money, you'll be out of luck if you really need something. A typical emergency fund of $1000 should handle most circumstances. If inflation hits too hard, or if you have special circumstances, you may want to increase that.
I have never had a problem renting a hotel with a debit card, but they do sometimes put a hold on large chunks of your money (this is another time when an emergency fund can come in handy).
Rental cars are another whole ball of wax. Some companies will not take debit cards, other companies will not take debit cards unless you have a round trip ticket. Since many rental cars are regionally managed, the only way to tell ahead of time is to call ahead. This is actually the only circumstance where I think that having a credit card might be useful. I still don't have one, but I may consider getting one someday, if I could find one that didn't charge me an annual fee. There's no way that I would consider paying money for a credit card that I might use once every few years once to rent a car.
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