Credit cards have become a normal part of life. There are even merchants that no longer accept cash or checks now, such as airlines, hotels and car rental agencies. If you don’t qualify for a credit card or are committed to living a debt-free life, you may find yourself having trouble living without the plastic.
Read on to discover 3 ways to live without a credit card.
If you need to travel somewhere that requires you to book a hotel room or take out a rental car, you may be able to substitute your debit card for a credit card. Many debit cards have a major network logo on them and can be put through the machine as credit. However, since there is no guarantee that you will return the car or room in the same condition that you took it out in, some retailers may require putting a hold of several hundred dollars on your account, which can tie up your vacation funds.
To avoid having your travel funds tapped out by a booking agent, ask the companies policy before handing over your debit card number. Also, make sure you have the funds in your account to cover the hold plus any vacation money you may need. Shop around with different companies to find one with the lowest hold.
You don’t have a credit card because you’re not interested in accruing debt, so borrowing for a major purchase isn’t an issue. However, there are some cases when not having a credit history will prevent you from getting the things you need, like a car or a mortgage. In order to overcome this hurdle, you’ll need to spend time making a credit history before most lenders will work with you.
In this case, you may need to get some plastic. Limit yourself to one small purchase a month and pay it off promptly to avoid debt. Or, you can go to a credit-building car dealership, furniture rental store or other type of business to get the history you need without submitting to plastic.
Always Be Prepared
Living without plastic means not having a reserve fund of emergency money if something happens. Because of this, you’ll need to do more financial planning than other folks. When you leave the house you’ll need to know how much you’re going to spend to make sure you have money in your pocket. You’ll need to always know how much is in your bank account to avoid overdraft fees and you’ll need to always have emergency money in the bank in case your car breaks down, you get sick or something else happens.
Most people that live without plastic keep a rainy day fund handy. They either keep it in cash in their home or in a separate savings account at the bank. The funds are to be used in the event of an emergency. Other plastic-free families keep an emergency credit card in a drawer that is only to be used when no other options are available.
The bottom line is that living without a credit card is entirely possible. You’ll just need to do a little more work than those that worship the plastic do to make sure your finances are always in order when you leave the house. With a bit of effort and some pre-planning, living the debt free life you’ve always wanted is easy to achieve.