Surviving without credit cards is easier than you think.

Using credit cards has become one of the primary ways people pay for their purchases. It’s convenient, has some security features, and some offer enticing rewards. People have also used credit cards as a source to build their credit up, with the hopes of being approved for larger loans in the future, such as a mortgage.  However, the constant use of credit cards can potentially lead to reckless spending by spending more than you have budgeted, resulting in a possible balance being carried from month to month. Over reliance on credit cards to get by can have long term consequences. To learn how to navigate everyday life without relying on credit cards, see the tips below.

1. Create a budget – By creating a detailed budget that outlines your income and expenses, you are able to prioritize essential expenses such as rent/mortgage, utilities, groceries, debt payments, transportation and more. Having a budget allows you to gain control of your finances by discovering any problem areas where overspending may occur and remedy those areas to ensure you are living within your means.

2. Build an emergency fund – When an emergency arises and there is no money set aside for such times, the first instinct is to rely on your credit cards in those moments. By having an emergency fund set aside, it saves you from having to step outside your budget with any unplanned expenses. 

3. Use debit cards and cash – By replacing credit card usage with debit cards for your everyday purchases, the funds are deducted directly from your bank account, preventing you from spending more than you have and accumulating debt. Additionally, using cash for your everyday expenses allows you to have a constant visual of what funds you have left, also preventing you from spending more than you have. 

4. Prioritize saving – For people who rely heavily on their credit cards, setting up a savings account for financial goals hasn’t been much of a priority due to being caught in the vicious cycle of credit card usage and payment. When removing credit cards from your payment methods, it’s important to include in your budget saving for future goals such as purchasing a car, home renovations, planning for retirement, and more.

 
5. Prioritize needs over wants – Without the ability to rely on credit cards, it’s important to distinguish between needs and wants. By really taking the time to consider whether something is a need or a want, it will help prevent impulse buying and keep you within your budget. 

Having access to credit cards has created a source of comfort for many, but taking the above suggestions into consideration can have you in a financially good place and have you prepared and ready to handle any financial emergency that may occur. Although using credit cards is a popular way to build credit, it should not come at the cost of potential overspending.

If you have relied too heavily on your credit cards and found yourself with accumulated credit card debt, there are options to help get you back on financial track. 

If you are looking for advice, or a second opinion about your debt, it does not cost anything to talk about your options. Every financial situation is unique and viable options can differ from person to person. A conversation free of judgment and cost, is the first step to determine options for debt that make sense for you. For a free consultation, please call or text (506) 645-1814 or email jaime@tackledebt.ca; or visit www.tackledebt.ca.