Milwaukee credit card debt is common among Americans—a recent Fox Business article estimates the average American owes $2,720 in credit card debt. Even though some people don’t plan on using a credit card regularly, they often issue a card in the event of an emergency situation or for expenses like renting a car. Though it’s true that credit cards can serve as useful financial instruments, it’s not impossible to live without them.
Build an emergency fund
Credit cards can come in handy if you run into a financial emergency like needing to pay for expensive car repairs or costly medical bills. If you’re considering living without credit cards, you should first build up an emergency fund. This way, if an emergency does occur after you’ve given up your card, you will be able to pay for these unexpected expenses.
Keep current accounts open
If you already have credit card accounts open in your name, don’t cancel them. Cancelling these accounts can have a negative impact on your credit score. The second you cancel your accounts, all the credit you’ve built up over the years will be eliminated. This can make it more difficult for you to qualify for a mortgage or car loan in the future. You may even have trouble qualifying to rent an apartment.
Diversify your credit portfolio
Your credit score isn’t just based on your credit cards, so you can improve a poor credit score without using a credit card by diversifying your credit portfolio. A diversified credit portfolio typically includes a mortgage, auto loan, or any other type of loan. You may also want to consider using a secured credit card. Unlike traditional credit cards, secured cards have a lower credit limit and require you to put a deposit down upfront. As a result, using a secured card can help improve your score while diversifying your credit portfolio.
Call (262) 827-0375 to schedule an appointment with Burr Law Office. We offer affordable bankruptcy services, including help with filing petitions. Our goal is to help you eliminate or consolidate your debt obligations so you can achieve a fresh financial start.