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Is It Possible to Live Without Credit Cards?

Is It Possible to Live Without Credit Cards?

Credit cards seem to be a normal part of life for many people.  According to Debt.org, more than 191 million Americans have credit cards.  With so many people out there using credit cards, it almost seems like having one is a necessity.  Credit cards have been around since the 1950s and they probably are not going away any time soon.  So, the question remains then – is it possible to live without credit cards? 

The bankruptcy lawyers at Nikolaus & Hohenadel want to tell you, YES – it is possible! 

As experienced bankruptcy attorneys, we want to help set you on the right path for your financial future.  Whether you are in the process of filing for bankruptcy, or you are trying to avoid it, we want to help.  We are a bankruptcy law firm that you can depend on to give you the information you need to make good decisions and create strong habits to help you in life.

The appeal of credit cards is certainly tempting.  Buying something you really want and not having to pay for it right away seems like a dream come true.  The sad truth is that for some, that dream can turn into a nightmare very fast.  If left unchecked, credit card debt can quickly become a financial burden that seems difficult, if not impossible, to overcome.  We are here to tell you there is another way. 

We have some tips and information that will help you understand how it is possible to live life without a credit card or how to better utilize your credit card:

  • Ditch Your Credit Cards!  Since the majority of Americans have credit cards, it makes sense to start with this tip.  If you want to live a life without credit cards, you need to start by getting rid of the ones you have.  You may want to cut up your cards or simply get them out of sight and out of mind.  The important thing is that you stop using them or limit the use.  The temptation to use your cards is a big one, so you may want to dispose of them to avoid using them.  That being said, we are NOT saying to close your accounts.  Keeping a credit history, especially if you were lucky enough to have a good one, does have certain advantages, as credit history factors into your overall credit score.  The longer you have an account open and in good standing, the higher your score may potentially be.  If the temptation to use a card is too much and you must close the account, consider a couple of things.  One, closing your account may affect your overall credit utilization in a way that causes it to go up, which in turn can then cause your credit score to go down.  Two, if you are planning a major purchase like a car or a home, plan to close the account after that purchase is settled.  Closing your credit card account while in the midst of purchasing a home or applying for an auto loan could hurt your chances of approval.  In some cases, it may even be the reason you are not approved.  Regardless of whether you choose to keep your accounts and not use them or you decide to close them, continue to monitor your credit.  It is easy to forget about monitoring your credit when you are not actively using cards and this could result in identity theft.  If you see any activity that you clearly have not initiated, report it and dispute it immediately
  • Create A Realistic Budget.  Whether you have cards and are getting rid of them or you want to avoid using them to begin with, coming up with a budget is one of the best things you can do for yourself.  It is an excellent habit to keep track of every dollar that you earn and every dollar that you spend.  This will give you some perspective on where you are financially and help you avoid overspending.  Come up with a list of all of the necessary expenses you have in your life, like your rent or mortgage, utility bills, and any debt you are paying off.  Then see how much money you are earning to help you realize whether or not you are meeting your financial needs.  Anything left over after your NEEDS are met can go towards your WANTS.
  • Avoid The Temptation Of Rewards.  One of the big ways that credit card companies will tempt you into signing up for and using a credit card are by giving you rewards.  Whether it be cash back, points towards hotel stays, or airline miles, credit cards will try to incentivize you to spend more with your card.  There are lots of ways to still earn rewards with companies without using a credit card.  Almost every company has a loyalty program these days, many of which are free.  Sign up for these loyalty programs, so that when you do spend money with a company you get rewards from the program while not incurring debt with a credit card.  Even airlines are starting to give frequent flyers points for purchasing airfare without a credit card.  You can even utilize sites or apps like Rakuten to get cashback for purchases you make online.  Research the places you shop at most and see if you can find ways to earn on the money you are already spending.
  • Get A Secured Credit Card.  This last one should only be used as a last resort.  A secured credit card is similar to a credit card but has a limit based on a security deposit that you make when you start the account.  So, if you make a security deposit of $1000, then your credit limit is $1000.  Using a secured credit card is a great way to build your credit without the temptation of a normal credit card.  You still make monthly payments on your secured credit card and those payments are reported to the credit bureaus.  Having a secured credit card can also come in handy when you are booking a hotel or renting a card that may require a credit card or that may put a large hold on a debit card that you would like to avoid.

Understanding this information can help you decide to live your life without credit cards and get you on a path where you can recover from bankruptcy or avoid it altogether.  The attorneys at Nikolaus & Hohenadel want to help you succeed and our lawyers are dedicated to helping you gain financial freedom. 

Nikolaus & Hohenadel is a bankruptcy law firm that can help you overcome obstacles you thought you never could.  Contact us today to see how we can help!