Alternatives to using credit cards

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Credit cards in hand with shopping bags

Credit card debt is on the decline.

Over the past two years we’ve seen a decrease in the number of clients coming to us needing help with credit card debts. But if you think you’re spending too much on a credit card, or are already in debt management, how can you avoid getting into debt yourself?

Use a debit card

With so many things being cheaper online it can be important to have a card that you can use for internet purchases. It is easier to keep track of your spending with a debit card than a credit card as the money comes straight out of your bank account. There’s also less temptation to spend more than you can afford.

Even basic bank accounts allow customers to have some sort of debit card these days, so they are easy to get hold of and may help you to be more in control of your money.

Use a pre-payment card

Spending on a debit card does involve having a good knowledge of what money you have left to spend in your account; otherwise you could end up with hefty bank charges. If you wanted an even easier-to-manage card you could take out a pre-payment credit card.

These cards work in much the same way as a pay-as-you-go mobile phone. You load the card up with credit and use it until the credit has run out. There’s no risk of spending more than you have and it can be a good way to keep track of your money.

The major downside of these cards is that you can end up paying charges to either load up or spend money with them. MoneySavingExpert.com has a really useful pre-payment card guide to help reduce these charges.

Spend cash

If you would prefer a more old-school approach you could avoid plastic cards altogether. Using only cash can be a really useful way to learn what you actually spend your money on.

It’s also easier to stop yourself from spending when you have to literally hand over cash for your purchases. Putting things on a card doesn’t always feel like spending, so sticking to cash can help to curb your spending.

Careful budgeting

The majority of people we speak to with credit card debts have not accumulated their debt from a lavish lifestyle. Most of the time it comes from putting the weekly shop on a credit card, not from buying jetskis and a champagne! Planning and sticking to a budget is a good way to avoid having to use credit cards to survive.

Spending a bit of time planning your finances can pay dividends in the long term. By organising what you’re going to spend your money on you can make sure that you haven’t run out of money weeks before payday.

Demotivating yourself

If you are feeling a bit down in the dumps it can be tempting to treat yourself to a bit of retail therapy, which can lead to building up credit card debts. Taking a more philosophical approach might help to put you off impulse spending.

Will buying the thing you think you want really make you happy? If you think back on the things in your life that really matter it will rarely involve material possessions. If you can successfully put yourself off buying something on a credit card you’ll be better off in the long run.

Emergency fund

Unexpected changes to your finances, by their very nature, come out of nowhere. This can be where a lot of credit card spending comes from – if your income has gone down it can be easy to make up the difference on a card. If you can afford to squirrel some money away you’ll be better prepared if you have a shock to your finances.

The amounts that people recommend having in a rainy day fund vary, but if you can have one month’s income saved it will provide a useful cushion should you be made redundant, have a sudden rise in bills or have to reduce hours at work due to illness.

What if it’s too late already?

These tips might be a bit late if you already find yourself facing a credit card debt problem. If you are not already getting our help then visit Debt Remedy, our free online advice tool. It’ll help you plan a monthly budget, suggest practical solutions to help you and email you a personal action plan and advice guide.

James Winterbottom has been a debt advisor for six years. Away from work he is an amateur app developer and writes fiction. James is a lifelong supporter of Huddersfield Town football club, which suggests he is either very loyal or very daft. He also likes to talk about himself in the third person in bio pages.

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