It is certainly possible for an individual to use credit cards in a responsible manner. For example, keeping balances low or paying them off completely in each billing cycle. However, it is unlikely that most people with credit cards can do just that because they rely on credit cards for money they do not have; this creates a vicious cycle of debt.
One of the best possible reasons to stop using credit cards is to get out of debt. Eliminating debt can relieve an immense amount of stress and worry, and provide you with extra money to put into savings or use for more purposeful purchases. Using cash instead of credit cards will also save you money overall because you’ll be forced to pay closer attention to your cash flow and need to budget your finances accordingly.
In a study done by the Massachusetts Institute of Technology (MIT), it was discovered that consumers were more likely to spend at a higher rate when using credit cards than if they were to use cash. Credit cards typically have high interest rates and other associated fees that can double, possibly even triple the amount that you thought that you were spending. By avoiding using credit cards altogether, you can avoid overspending and avoid getting buried in debt.
Another reason to stop using credit cards is that it is easier to budget. You know what your weekly, bi-weekly or monthly paycheck is. It is far easier to budget using this set amount than it is to rely on credit cards to pay certain monthly bills or to use credit cards for things like purchasing gas, groceries or on frivolous things. If you begin to rely on credit cards to pay other debts, you are only creating a larger burden for yourself in the long run because you are essentially “robbing Peter to pay Paul,” and it will come back to bite you when you’re faced with yet another bill because of your heavy use of credit cards.
Impulse buying is another huge problem when it comes to credit cards. If you want to eliminate the burden of debt from your life, then you need to show your credit cards to the shredder. It is better to destroy them than to leave them at home and give you the temptation to use them anytime you go to a store. It’s easier for a consumer to buy now and pay later than it is to watch your hard earned cash leaving your hands. Before you make a purchase, stop and ask yourself if it is a necessity or just something that you want. It may be hard at first to resist the urge to buy things that you want, but you’ll be grateful that you did when you can use cash to purchase things and know that you won’t be getting a bill in the mail later asking you to pay a price that is higher than the original amount.
If you want to get out of debt and live a happier, reduced stress lifestyle, then eliminating credit cards from your life is one of the best things that you can do for your bank account. The Federal Trade Commission offers some excellent detailed information regarding the fine print on credit card agreements as well as some informative articles on dealing with debt to assist you in your transition to a credit card free lifestyle.