Our entire lives revolve around credit and keeping the credit score high enough so that we can buy things such as houses, cars, insurance, cell phones, and rent cars and places to live. Even utilities can use credit reports to determine the interest rate you’ll pay and in some cases whether you can even get the item you want.
If you have no credit, you will still get to buy these things, but it might cost you an added one or two percentage points in interest or require a larger down payment. Even with the inconvenience, though, you’re likely to experience many more benefits of living without credit than drawbacks.
So can you really live without credit?
Whether you're forced to do it because you're not getting approved or the thought just crossed your mind, here are some reasons to literally rejoice if you've been shut out of the system
and unable to get all the credit you want:
* No One Can Tell You "No"
– When you apply for credit they can say no for many reasons, some that make sense and some that don’t. When you use your own money you say "yes" to yourself with a feeling of freedom rather than defeat.
* You’ll Spend Less
– The truth is, people tend to spend more money when it’s on credit than if they know they’re spending cash. When you spend cash, the money is harder to let go of because you know how hard you worked to get that money.
* You’ll Have Fewer Bills
– If you don’t use credit you’ll have fewer bills to pay each month, which can lessen the stress in your life exponentially. Being able to live with less money each month is a very freeing experience.
* You Will Save More Money
– When you have fewer bills you can save more money. You are the one who will earn interest instead of the bank. You can put the money away and then ultimately end up using less credit due to saving more money.
* You're Better Prepared for the Futur
e – Not using credit will make you a lot better prepared for the future due to the savings you will stockpile. Plus, if you have fewer monthly bills, you can live off less if you should get laid off.
* It Unleashes More Creativity
– When you have to think outside the box to live less expensively, you will become more creative in your everyday life.
* It Keeps Your Priorities Straight
– When you don’t use credit you are able to realize what is important. Having more things isn’t as important as the health and security of your family.
* You’ll Avoid Interest Charges
– credit balances create extra expense called "interest" and depending on your credit score, your interest rate can be really high: usually in the double digits if you have bad credit. Imagine if you could earn this much money in your savings instead of paying that much for your movie tickets that you charged on credit. (We'll discuss debt balances and interest in a future post).
So, I hope you see that not only can you live without credit, you can live better without credit. The credit industry doesn’t want you to know that you can live without credit. They want you to feel as if you have to use credit for everything or you won’t be able to buy a house or get a job. But, the truth is there are always ways around those issues. They might initially cost a few dollars more but the savings from not using credit more than makes up for it.
Make sure you check back for our next post soon. I and my team will be talking about starting off on the right track building credit and avoiding the pitfalls of debt - and those interest charges!
If you'd like a free download I wrote on the subject, visit the FREE TIPS
page. See you soon!