Handing over the plastic has become a habit in the twenty first century. Gone are the days of saving well worn bills and tarnished coins to safely and gratifyingly pay for something. Welcome the days of instant gratification. Are credit cards really necessary?

 Building Credit

New home owners trying to get loans require some form of credit score to show a bank. The only way to build credit is to pay the bills on time. Banks want to see a history of bill paying before lending money to people who want to purchase a big ticket item like a house, condo or vehicle. One of the easiest ways to build credit is by consistently paying off the credit card bills. It is not the only way. Paying bills from businesses and utility companies are ways to enrich a credit score. Also a history of paying rent, lease or tuitions will provide the necessary information to land a good credit score. Not paying bills is the best way to destroy a credit score. If you are using a credit card to build a credit score, spend within your means and pay off the entire amount, if possible, every month. This way you will avoid substantial interest charges and late fees.

Shopping Online

Credit cards are not the only way to pay for online merchandise or rent a car. PayPal accounts and debit cards are taken most places that a credit card would be. By using a debit card you avoid the pitfalls of over spending what you don’t have. PayPal accounts can link directly to your bank account to allow withdrawals immediately. Need to rent a car? A credit card is not necessary. Use a debit card, that way overspending will not happen.

Emergencies

Having a card for emergencies gives travelers a sense of confidence and calm. A credit card helps but a debit card can also be used. While traveling, a debit card will give access to any situation that arises. Emergency funds should include living expenses for around three months. A buffer of around $1,000 to satisfy emergency situations can be garnered without the use of a credit card. Credit cards dangle rewards, points, saving money and gift promotions. These are all marketing schemes to promote the use, and often overuse, of credit cards to make the card companies more money. In store cards often give discounts, but they make more on the interest charges if you don’t pay it off every month. Credit cards are a convenient way to satisfy the need to have cash at the ready but they are not a necessity.