When you talk about a credit card free life, everyone will ask you if you have planned to live debt-free. The talk of debt comes with the talk of credit card. Living a debt-free life is everyone’s dream. However, you cannot do many things without a credit card, which you could have done otherwise. For example, you can buy your dream car from the showroom with your credit card and pay the loan in the coming eight, ten, or more years. Similarly, you can take out a loan for your child who wants to study during vacations, instead of doing a job.
Did you see the debt coming? Did you calculate the student loan for summer studies, the car loan, mortgage, and other loans?
Many people, depending on credit cards, end up spending more than what they can afford. There are people who live with credit cards and controlled expenses. However, if it is not your cup of tea then decide to give up your credit card and follow the given techniques to live credit card free life.
Credit Score and Credit Card
People need a credit card to improve their credit score. However, when you are debt-free, your credit score automatically improves or at least stabilizes. Meanwhile, you can improve your credit score with your mortgage payments.
Purchasing a Car or Renting a Hotel Room
You can rent a car or a hotel room simply by using your debit card. Most of the debit cards provide as many benefits as credit cards do. Debit cards also offer deals and offers for different purposes like airfares and vacation deals.
Points, Emergencies and Credit Cards
People believe that they cannot earn the credit points if they do not use the credit cards. However, when you become debt-free and start spending controllably, you do not need a credit card to suffice your emergencies. Similarly, you do not need credit points. Remember that credit points do not make a person rich, but savings, controlled spending, and investments do.
• Get a debit card with Visa Card or MasterCard logo.
• Always think twice before purchasing something. Debit cards allow you to fulfill your needs whereas, credit cards make you purchase your wishes and spend the rest of your life paying for those purchases.
• Save for an emergency fund regularly. Fix an amount, 5% or more to save for the emergency fund.
• Set your goals and save for them. For example, if you want to buy a fancy car after five years but you need a car right now, then save for an inexpensive car to fulfill your need. Keep saving to buy your dream car on the set timeline.
• Invest your money in hedge funds or compound interests to multiply your gains.
• Save for retirement.
• Never go on an unplanned holiday. Plan at least six months ahead and save for it.
It is not difficult to live credit card free. However, you will realize the benefits of credit-free living once you become debt-free and accustomed to this lifestyle.