Is it possible to live without credit cards?

live without credit cardsIt seems that nowadays, paper cash is almost as extinct as dinosaurs. Debit and credit cards are used for paying almost everything. However, credit cards are not mandatory for survival.

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It is possible to live without the use of credit cards if you are ready to live within the parameters of certain lifestyle changes. Carrying cash is not always the best solution, but neither is having a myriad of credit cards that are burying you in debt.

You Could Just Use Cash

Cash is great. You can use it without fear of interest rates or bank fees. However, it is not wise to carry your entire paycheck in your wallet.

You cannot always go to the bank every time you need to make a withdrawal to pay a bill.

Before credit cards became so popular, most businesses would take reservations over the phone. This became a problem when items such as rental cars, for example, were booked up, and no one showed up to fulfill their reservation. Companies began requiring some type of security for the reservations.

If the person did not show up to claim the reservation, the charges were tacked on to the credit card that was put on file. This tactic worked so well, that other companies followed that model of protection against no-shows and now it is virtually impossible to make reservations without a credit card.

Sometimes debit cards can be used in lieu of a credit card, but be prepared for a hold or block to be placed on extra funds as a security deposit until the transaction clears. After that, the hold placed on that amount will be released. You can read more about how this works on the Federal Trade Commission’s website. If you are opposed to having a hold placed upon your debit card, you can read more about how to avoid also.

The Necessity of Credit Cards

Not really, but be prepared to adjust your lifestyle and your credit score to accommodate not having them. With the way we live in today, particular types of business transactions cannot be conducted without the use of a credit card. Renting a car, making online purchases, hotel reservations, and airline reservations are just a few transactions that absolutely require a credit card.

live without a credit cardIf your salary is high enough that you can pay all of your monthly expenses, contribute to your retirement fund, and have a sufficient emergency fund set aside, then you may be part of the lucky ones who could function in society without having to rely upon credit cards.

Keep in mind that your credit score is affected by using credit cards. It demonstrates how well you budget yourself by making timely payments. Credit bureaus like to see the longevity of your credit card accounts in order to determine your score. If you cancel your credit cards, you may not have anything for them to see.

Deciding if You Need to Have a Credit Card

Credit cards offer certain amenities that make life a little easier sometimes. When you are trying to rent a hotel room for spring break, you just provide your credit card information and it’s done. If not, you have to take the chance of trying to book one when you get to the hotel and hope there is still one available.

In case of an emergency, such as a major car repair or a family member has an unexpected illness, which results in a large medical bill, credit cards can add to your piece of mind of being able to pay the bill while still using your normal funds for every day regular expenses.

By owning a credit card, you have the peace of mind that if anything unexpected were to happen, you would be able to fall into the wonderful little safety net that credit cards can provide. But just because your credit card has a credit limit of a few thousand dollars does not mean that you have to spend it.

Credit cards are not necessarily a bad thing.

If you use credit cards wisely and adjust your budget to pay off the balance in a timely manner, they can help to make life easier. It is when you abuse the purpose of credit cards to immerse yourself in debt that can ruin your finances for years.

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