Can you live without using credit cards? Yes, it’s possible, although it does require discipline in some cases. Here are few tips to help you:
1. Make a monthly budget. Don’t just make one budget and use it all year. Making a monthly budget allows you to adapt as your financial situation changes. Reserve one day at the end of each month to spend time calculating next month’s budget. This habit minimizes unpleasant surprises and gives you a realistic idea of where your finances stand.
2. Set up automatic payments for your bills. Link payments to your online bank accounts. By creating a monthly budget, you’ll become intimately aware of what amounts will be coming out. Then, take a check-writing load off by getting payments withdrawn automatically.
3. Use your debit card or cash for everyday expenses like groceries and gas. Some people prefer to use cash for smaller expenses, to stay conscious of the amount of money they’re spending.
4. Use a debit card for travel expenses. You may want to open a separate debit account if you travel frequently and are worried about fraud. Another alternative is to pre-load an ATM card with travel funds. For example, some companies offer an ATM card with their insurance programs. You can load them with wired money, and then use that money up travelling.
5. Maintain credit balances below 30%. If have to use credit cards, make sure that your monthly balances are less than 30% of the limit. Remember, once you carry more than 30% of the limit your credit score is in jeopardy of being impacted. More than 50% and you might as well charge to the limit. Attack your smallest balances first and work your way up! Stay disciplined and you can do.
