It’s a common belief these days that you simply HAVE to use credit to survive, but this is far from the truth.
How do you think people survived before credit cards were invented? The first credit card ever invented was the Diners Club card in the early 1950s, and it wasn’t until decades later that the use of credit cards became as widespread as it is today.
The problem with credit cards and with credit in general is that few people acknowledge the truth about how they work: you will borrow money thinking that you are going to pay it back quickly, and then you will end up instead making payments for decades, paying double, triple, quadruple the purchase price of the product. And credit cards will keep you poor, not rich.
So how do you live without credit?
1.) Get a debit card. You don’t need a credit history for that. And with a debit card you can’t spend more than you have.
2.) Need a car? Buying new cars rarely makes financial sense – they lose value the minute that you drive off the lot. Do your research and find a used car that you can afford to pay for. And then take the money that you have always been paying for car payments and save that money every month, in an interest bearing account, so when your used car needs to be replaced – you can buy a new one with cash.
3.) Give yourself a cash allowance every week for lunch, gas, entertainment, etc., and do not exceed it.
4.) Want to buy a house? These days, you have the option of buying an owner-financed house. If you can put down as little as $5,000, and can make regular house payments, you can find homeowners who are willing to wheel and deal. If you DON’T have $5,000 to put down and you can’t be sure that you can make the monthly payments – then you should not be buying a house. Note: there are numerous things that can go wrong with owner financing, so make sure that you have your own lawyer read over the contract for you.
5.) Cell phone companies may require a credit history for their two-year contract plans. So instead, for cell phones, do the pay-as-you-go option. There are very affordable plans these days, some in the area of $40 to $50 a month for unlimited minutes. Discover how to get out of debt fast