Is It Feasible to Live Without Credit?

by Miranda Marquit · 0 comments

I’ve been thinking a lot lately about life without credit. When you get to a certain point in life, it seems as though you don’t need to worry about credit anymore. If you aren’t carrying credit card balances, and you prefer a debt-free lifestyle (except your mortgage, of course), it doesn’t make a lot of sense to worry about your credit. But what if you need credit to get by?

What Happens When You Need Credit?

I’m getting ready to move, and one of the first things I did was secure an apartment in the new location. However, before I could get the apartment, I needed to go through a credit check. In fact, there was quite the credit application associated with the apartment. It’s in an area I want to live in, and the apartment community is my first choice, so it makes sense that I might have to jump through a few more hoops.

It’s not my favorite approach to the situation, but it’s what needs to be done. So, even though credit hasn’t been a big concern for me in the last seven years or so, the reality is that I’m glad I have good credit, because I might have had to settle for a different apartment, in a different community. If you wind up needing credit for something at some point, it’s nice to be ready with it, even if you think you can live without credit.

Other realities of the the credit industry include the fact that some insurers check your credit when determining premiums, and the fact that you might even have your credit checked if you want to get Internet service or cell phone service. Poor credit — or no credit — can mean higher costs to you. So, while you can live life without credit, it might cost you in the long run.

Does Credit Have to Mean Debt?

Of course, the other consideration is the fact that credit doesn’t always have to mean debt. Just because you use credit cards doesn’t mean that you have to be in debt all the time. Indeed, credit cards can actually be part of a frugal lifestyle, when you use them properly.

However, in order to make this work, you need to be able to keep a lid on your spending. One of the drawbacks to credit cards is that they make it so easy to spend money. Studies indicate that you are less likely to be mindful of your spending when using credit cards, and that you are likely to spend more than would normally. In order to use credit cards to best effect, you need to keep track of your spending — just as you would with your debit account.

It’s also important to understand that your credit cards aren’t another source of “income.” Too often, it’s easy to view credit cards as “available” money, when it’s borrowed. You have to think in terms of what you actually have, rather than viewing a credit card as another income source. Carefully track what you spend and make sure it fits in with your ability to pay. The worst thing you can do with a credit card is carry a balance. If you can’t pay off your balance each month, the use of a credit card is not for you.

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