How to Live Without a Credit Card

Credit cards may be wonderful tools that let consumers buy what they need. But credit card spending has gotten out of control for millions of people who buy more than they can afford. While the business world tries to tell people they need credit cards to survive, knowing how to live without a credit card can help you establish healthy spending habits while avoiding the pitfalls that often come with having a wallet full of plastic.


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    Obtain a debit card from your bank, one that has the Master Card or Visa logo (most do these days). With a decreasing number of stores and restaurants accepting checks, a debit card provides you the convenience of not carrying cash and enables you to spend only money you actually have in the bank. Use caution when paying with a debit card, though, because these little plastic cards can, like a credit card, make it easier to spend more money than if you were actually counting out the cash or writing a check.
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    Determine the difference between needing something and wanting something when you're going to purchase something. People tend to make more frequent and higher-priced impulse purchases when paying by credit card than if they are paying with cash or with a debit card. If paying with cash in your wallet or bank account, you have a greater tendency to stop and think, "Do I really need this, or do I just want it? Is it worth what I'm going to have to skip in order to get it?"
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    Comparison-shop to find the best deal by researching the items you want before you go to the store. In a report released by MIT's Sloan School of Management, consumers tend to spend much more for an item when they are paying with a credit card than paying cash for the same item.
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    Budget how much money you'll need for the coming week and hold the cash out of your paycheck or bank account. Divide the money between envelopes you have marked for dining out, groceries, gas, tolls, extraneous items and entertainment. Using this method, you're giving careful thought to each dollar you spend while also setting spending limits each week.
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    Take advantage of online payment services like Google Checkout and PayPal when buying online, and you don't want to give your debit card information. These payment services are generally free or carry very small transaction fees, which in the long run are much less expensive than the fees charged for credit card usage. And, the accounts are conveniently linked directly to your bank account. No credit needed!
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    Rediscover lay-away services for gift purchases, household items and clothing. This requires a little planning, but more retail stores are bringing back the old layaway plans that allow their customers to "pay out" an item without having to use a credit card. Yes, you don't get to take the item home until it's paid for, but for "nice to have" items or gifts, you're able to pay for them as you have money and with little or no user fees involved.
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    Start a Christmas fund or a savings account for large ticket items, gift purchases and family vacations. Set money aside every month or out of every paycheck to an account you've established for that purpose so when holidays come around or you want to take a trip, you have money set aside to buy what you need rather than relying on a credit card.


  • Many people believe the myth that they must have at least one credit card to establish a credit record. However, you are establishing a credit report and credit score in your name every time you make your home, car or student loan payment.

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Categories: Budgeting