To be fair, if you use a credit card responsibly and pay the bill in full when the statement comes in, this will help to ensure that you don’t manage to get into financial hot water, but life isn’t always that easy and sometimes you might need to borrow on your card.
There are almost inevitably times of trouble and strife that you will experience at some point, which is when you might need someone like Wallin & Klairch Riverside to try and get you a positive outcome, and it is the same sort of scenario when it comes to financial matters, where you might be tempted to use a credit card to cover an unexpected expense.
Here is a look at how we tend to use our credit cards and an insight into whether you could actually manage to cut that financial umbilical cord, by clearing your balance and surviving without any plastic in your wallet.
Not always the freedom to choose
It is worth noting that just over 20 million American citizens do not have any credit at all and further group of about 32 million people, have what could be classed as a minimal amount of credit history.
This means that about 20% of U.S residents do not have access to traditional sources of credit, like credit cards. On the other hand, this means that about 75% of people do have at least one credit card in their name, so you have two distinct non-cardholder groups, those that can’t get a credit card if they wanted to, and those that have made the decision to try and live without this form of finance.
Adopting a cardless lifestyle
Whatever good intentions you start out with when you get your credit card delivered, it seems that roughly 60% of people with at least one credit card, succumb to the temptation or need to use the credit available, and have an outstanding balance attracting interest charges.
The positive aspect of this estimation is that there are about 40% of cardholders who clear their balance when the statement comes in.
The question is whether you have the willpower, discipline or even the desire to not even have a card at all, and instead, are prepared and able to arrange your finances in such a way that you cut up your cards and remove the temptation to use this form of credit altogether.
Making a fresh start
The most obvious barrier to clearing your credit card balances and making a fresh start without this form of borrowing, is the fact that you might not have the cash available to pay off what you owe.
It is one thing having the resolve to clear your card balance and then cut it up to remove any further temptation, but you may have to be resourceful in order to achieve that aim.
One way that you could reduce your interest charges would be to find a cheaper form of borrowing, which is basically transferring debt, but at least it would be costing you less to have the same amount of borrowings.
If you own your own home, it might be feasible to take out a home equity loan at a much lower rate than your current credit card charges, but the obvious drawback to that idea, is that you are risking your property if you don’t pay off the loan.
Finding an acceptable compromise
Credit card companies are in business to make money out of you by charging interest on the money you borrow by using the card, which will start accruing if you don’t pay the full balance back when the statement comes in.
It is a regular practice for card companies to increase your credit limit if you are running a high balance that is near to your existing limit, then of course there is the issue of the high interest rates, which might go up at short notice.
It should be remembered that having a credit card and using it responsibility can be good for your credit rating, so it might be worth trying to explore a way of finding an acceptable compromise.
If you can just use your card at times where they are the most convenient option, such as paying a security deposit for car hire, and pay back any balance when it is due, there is no reason why you might want to cut up your cards. But if you don’t want to run the risk of running up a balance you can’t pay or hate seeing the interest you are being charged, it might be time to contemplate a life without cards.
Attorney Paul J. Wallin founded Wallin and Klarich, A Law Corporation in 1981. As the senior partner of Wallin and Klarich, he has been successfully representing clients for over 30 years. Mr. Wallin has successfully defended clients with criminal matters involving assault and battery, drug crimes, juvenile crimes, theft, manslaughter, sex offenses, murder, violent crimes, misdemeanors and felonies.
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