So, you’ve done it, you survived your bankruptcy and you’re ready to get a fresh financial start. But how do you survive and thrive without credit cards? Let’s take a look at the secret to living well without relying on plastic.
Grow Cash
No, you don’t want to grow your own money trees, but you do want to make sure you have a constant cash flow after bankruptcy. Life without credit cards is definitely doable, but it won’t be easy if you don’t have enough cash on hand to handle life’s little (and large) emergencies.
- Keep at least 3-6 months emergency cash reserve.
- Save for expenses you know about (i.e. home/car maintenance, insurance, holiday shopping).
- Seek out and exploit side income opportunities such as a part-time job or a weekend business venture.
Use Debit Cards
There are certain situations where credit cards seem necessary such as renting a car, reserving a hotel, or booking a flight. Fortunately, even in these situations you can get by if you plan.
- Car rental. Find car rental companies that accept debit cards. Also, make sure you have enough money on your card to handle the deposit requirement and any bill that may become due at the end of your rental.
- Hotel. Most hotels also accept debit cards, but much like car rental companies they may require that you place a deposit on your account. Make sure you have the cash to handle this requirement and take extra care to not damage the room while you’re staying there.
- Airlines. Booking a flight is probably one of the easiest things to do using a debit card. Just make sure you read the fine print so there are no surprise charges.
Layaway
Money can be tight, especially after exiting bankruptcy. This means that you may not always have the money for what you want. In that case, many retailers offer layaway plans that allow you to make small monthly/weekly payments on an item until it’s paid off. Once you pay off the item you want to purchase you are then allowed to take the item home. This is a great way to avoid credit cards when purchasing big ticket items such as a refrigerator or computer.
Pre-Paid Debit Cards
One of the easiest ways to manage your money and thrive without a credit card is using prepaid debit cards. Prepaid debit cards make it easy to make purchases almost anywhere while helping you limit your discretionary spending.
Don’t let life without a credit card slow you down, use alternatives and work with companies willing to accept those alternative methods of payment.
