Life Without Credit Cards

One problem with being in debt is that it can harm your ability to get credit and paying your bills late and running your credit cards up to their limit can cause your credit score to plummet.

So, is credit really that necessity these days?

Bear in mind that credit cards have not always been with us and that it was not until the 1970s that they started to be used widely. What does it really mean if you do not have a credit card? In simple terms it means that you do not a ready source of credit in your pocket and can only buy those things that you can afford.

We all want to have the latest flat screen television and a new outfit for each season, as well as a holiday in the sun with the kids in the summer and another skiing holiday in the winter. But do you really need these things or are they simply things that you want. More importantly, is it really worth putting yourself into debt by borrowing the money you need to buy them?

What would you do if credit simply was not available? Would you go without or find another way to buy what you want?

The problem with credit is that it is too easy to see it as free money whereas, in reality, it is going to have to be repaid at some point with interest. Credit allows you to have what you want today, but locks you into paying for whatever you buy for months, and normally, years to come.

So, what is the answer?

The first thing you need to do is to stop using credit in form at all, with the exception of a mortgage to buy a family property and possibly hire purchase to buy a car, if the later is really a necessity.

Next, review your finances and, if you need money in the short term, consider selling off some of your possessions, working longer hours or getting a second job. At the same time review your current buying habits and, if necessary, think about doing more of your shopping in thrift shops, consignment stores and other discount shops.

Then, get into the habit of saving. Even a small amount put aside each month can quickly add up to a substantial bank balance.

Finally, think carefully about everything you buy and decide whether or not you really it and, more importantly, whether you can afford it.

The strange things is that once you get into the habit of living without credit you will find that you actually have more money to spend since you are no longer having to make interest payments and your overall standard of living will rise.

It may take a little while to get into the habit, but it will be well worth it in the long run.