Anyone who first applies for a credit card has high hopes that they will be able to manage it and service the interest when the time comes. However, there aren’t too many of us that meet those expectations. We get the card, start to spend, and think about the consequences later.
Before we know it, we’ve sent our credit card into overdraft, and we’re not sure how we’re going to pay it back – not to mention the interest. With this in mind, let’s take a look at four things you should do instead of getting a credit card.
1. Build an Emergency Fund
Many people are so caught up in paying off their credit card debt that they don’t have the funds to pay when things go wrong, like when the car stops working or there is a health issue in the family.
Many people also fall into the trap of having to pay for the unexpected with their credit card, which, of course, leads to more debt that you can’t pay off. This is why it’s a good idea to create an emergency fund that you can tap into in times of need.
2. Only Buy What You Can Afford
Another great thing to do instead of getting a credit card is to live within your means. This means paying for just what you need, within what you’re earning.
While you may be tempted to go on a shopping spree, stop for a moment and think of the future. Do you really want to be in debt for buying material things, like clothes and shoes? Or are you able to spend within your means at this point and avoid credit cards altogether?
3. Consider a Short-Term Loan
If an emergency has come up and you haven’t had any time to build up that emergency fund yet, you may want to consider taking out a short term loan. These are much more manageable than credit cards, and they’re easier to apply for as well.
Look up title loans online or personal loans online, and see what comes up. One of the biggest advantages to a short term loan is that most lenders offer flexible repayment options, so you won’t have it hanging over your head.
4. Create a Budget for the Week
If you don’t have a budget that you’re working within for the week, it’s easy to go beyond your means. This is why it’s essential to know exactly what’s coming in and what’s going out.
Sit down and take a look at your income, and then think about what you need to spend that income on each week. If you’re able to cover it all, create a budget where you know exactly which day those expenditures go out, so you can figure out exactly what you’re left with. This is going to make managing your finances a lot easier and will help you avoid those pesky credit cards.
Staying away from credit cards isn’t easy. Whether you want to treat yourself or you’ve got an unexpected event that you have no choice but to pay for, avoiding credit cards is easier said than done. However, it is possible, especially with these simple tricks.