Can you imagine living without a credit card? It’s possible, although it does require some restraint. Here are five tips to help you kick-start a life without credit cards:
1. Make a monthly budget. Don’t just make one budget and use it all year. Making a monthly budget allows you to adapt as your financial situation changes. Reserve one day at the end of each month to spend time calculating next month’s budget. This habit minimizes unpleasant surprises and gives you a realistic idea of where your finances stand.
2. Set up automatic payments for your bills. Link payments to your online checking account. By creating a monthly budget, you’ll become intimately aware of what amounts will be coming out. Then, take a check-writing load off by getting payments withdrawn automatically.
3. Use your debit card or cash for everyday expenses like groceries and gas. Some people prefer to use cash for smaller expenses, to stay conscious of the amount of money they’re spending.
4. Use a debit card for travel expenses. You may want to open a separate debit account if you travel frequently and are worried about fraud. Another alternative is to pre-load an ATM card with travel funds. For example, some companies offer an ATM card with their insurance programs. You can load them with wired money, then use that money up travelling.
5. Use checks sparingly. Checks are good for expenses that you need to keep on record, like rent and doctors’ visits.
Bonus tip: If you can, keep a credit card account open for emergencies, but don’t touch it. I heard of one man who kept his credit card in a container of ice in his freezer, just so he wouldn’t be tempted to use it. It’s a little offbeat, but you get the point…
(from No Credit Needed blog: http://www.ncnblog.com/2007/10/19/how-i-live-without-using-credit-cards-my-simple-system-for-living-on-a-budget/)