How to Reduce Your Dependence on Credit Cards
- 1). If you lose your job, get a divorce or experience health problems, depending on your credit cards alone will only add to your financial problems. A good way to combat this is open an emergency savings account. You should save at least 10 percent of your income.
- 2). You should also pay down any debts you have on your credit cards, starting with the one that has the highest rate of interest and working your way down to the one with the lowest rate of interest. Once you start doing this, don't add to your debt by overusing them. Instead, use your credit cards mainly for emergencies.
- 3). Keep contributing to your retirement account and resist the temptation to withdraw from it. This is especially important past age 50.
- 1). When you're first trying to reduce your dependence on credit cards, you wonder how is it possible to live without them. You can pay with cash by means of your debit card. With this card, you can withdraw cash from your checking account at an ATM.
- 2). While it's good to use a debit card in place of cash, be careful because it's possible to overdraw your account while using the card. Debit card readers can allow transactions even when you have a low balance. A good idea is to keep a certain amount of cash with you so you can spend less on the card.
- 3). Although automatic online bill paying is convenient, it's wise to write out checks when paying bills. With a check you won't have to worry about high interest rates and struggling to pay the credit card company before the grace period ends.
