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How To Thrive Without Credit Cards

Updated on June 8, 2011

How To Live Without Credit Cards


Often times friends ask me if it is possible to live without credit cards and my answer is a resounding yes! Yes, you can live without credit cards but not just that, you can thrive without credit cards. We live in an instant gratification world where we have a false sense of entitlement and want everything right this second but before you reach for that plastic card and make unnecessary purchases that will land you in debt up to your eye balls, allow me to share with you how you can live without credit cards – correction, how to thrive without credit cards.

Step one in thriving without a credit card is creating a budget. I know, the dreaded B-word. I detest that word probably more than you do but creating a budget is very essential in the quest to living a life free of credit cards and credit card debt. Think of a budget as a road map. You would not hit the road to visit unfamiliar territory without a map or some kind of sensible guide, would you? I thought not. Get a budget. Each month, determine ahead of time how much income you have coming in and allocate it appropriately. This gives you control over your money and if you know where every penny is going before you even receive it, you will absolutely have no need to rely on credit cards.

Step two in how to thrive without credit cards is by getting a debit card. Banks normally issue these automatically when you open up a checking account but just in case your bank is one of the few that does not, be sure to ask for one. A debit card is awesome because you are using your cash without walking with actual cash. The money you spend comes directly out of your account so you either have money to spend or you don’t, in which case you can’t use your card! And the best part is there is no bill coming your way at the end of the month. To really benefit from having a debit card, investigate and see what other hidden perks your bank of choice offers with their debit cards – do they have a rewards program you can take advantage of and get rewarded every single time you swipe your debit card? You’d be surprised at all the goodies you can accumulate and enjoy simply by using a debit card instead of relying on credit cards.

The last and most crucial step in how to live without credit cards is simply by creating an emergency fund. Most people end up accumulating credit card debt because of some sort of emergency (no, those new Jimmy Choo shoes are not an emergency) but if you planned for the unforeseen in advance, you would not need to rely on credit cards in times of emergency. Financial gurus recommend saving at least three to six months worth of living expenses in case you experience an unexpected job or financial crisis. I personally recommend at least a year’s worth if you can afford it. However, don’t let all these figures overwhelm you, start with an emergency fund with as little as $500 - $1,000 and then build on it from there. The most important thing is you actually have an emergency fund as a safety cushion in case the unexpected does actually happen.

It is very important to remember that credit cards are not the enemy and they only become a problem when misused. Credit cards do serve an important role when used correctly but in case you’re contemplating not using credit cards and you’re wondering if and how you can live without credit cards, I say, yes you can. Not only can you live without credit cards, you can thrive without credit cards.

You CAN live without credit cards

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    • EuroCafeAuLait profile image

      Anastasia Kingsley 

      7 years ago from Croatia, Europe

      Good point, simple and true. An emergency fund is definitely essential! Now I need to go set one up ... LOL

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