Credit cards offer several advantages. Mobile money. Rewards points. The chance to build a credit profile.
For some people, though, those benefits come at a terrible cost. Wasteful spending. Suffocating debt. And, ultimately, damaged credit profiles.
Even if you pay your entire bill in full every month, your credit card might be doing you more harm than good. So here are five reasons you might want to implement the drastic tactic of eliminating that not-so-fantastic plastic.
Stop spending money you don’t have
Credit cards make borrowing money easy – which is why we often take out loans we can’t afford to repay. We kid ourselves that despite not having enough cash to buy a particular item today, we’ll somehow find the money tomorrow.
Of course, if we didn’t have a credit card, we wouldn’t be able to fool ourselves and we wouldn’t make purchases we couldn’t afford.
Stop buying things you don’t need
Cutting up the credit card would not only stop us buying things we can’t afford, it would also stop us buying things we don’t need.
Studies show that we’re less likely to make impulse purchases if we have to physically open our wallet and give our cash to another person. Surrendering actual money makes us stop and think in a way that making an electronic transaction doesn’t.
Eliminate unnecessary expenses
Guess what happens once you stop receiving credit card bills? You stop running the risk of paying high interest rates and late fees. That means more money in your pocket and less in your bank’s.
Tell your stuff to get stuffed
Living a credit-free life means lower debt, fewer expenses – and less ‘stuff’. The thing about stuff is that it has a way of controlling us, because now we need to insure it, maintain it, store it and, ultimately, upgrade it.
When you have less stuff, you feel less stress, because the pleasure we get from consumer goods is often exceeded by the hassle associated with owning them.
One reason people insist on having a credit card is because they need it for online shopping. Except you don’t. If you get a PayPal account and link it to your savings account, you can make online purchases with money you actually have rather than money you hope to have.
Another reason people insist on having a credit card is because they think it would be dangerous and inconvenient to fill their wallet with cash. Except you don’t have to. If you get a debit card, you can travel safely and easily with the entire contents of your savings account.