Can you survive without having a credit card

can you survive without having a credit card

Most Americans have an average of four credit cards. Suppose you don’t fit that norm for whatever reason. In that case, you may be either thinking about getting a credit card or wondering whether you can survive without having one? Technically you can get by without a credit card. However, there are some advantages to having a credit card when building credit and rewards. Keep reading for more information on the best uses for credit cards and some disadvantages so you can decide whether you want to take the step of applying. 

How Exactly Do Credit Cards Work?

Standard credit cards are a form of revolving credit. This means that if you make payments, you can continue using it as long as you haven’t reached the credit limit. Interest rates stay the same; however, the higher your credit card balance, the more interest you pay each month. Your lender and your financial situation will determine your credit limit and interest rate, including your credit score, credit history, and income. 

You will need to have a decent credit score for most standard credit cards, as most credit card companies won’t approve an applicant with a bad credit score. And if they do, it may only be for a few hundred dollars, and usually not for those who haven’t had at least one credit card or loan before. 

A Prepaid or Secured Credit Card 

A prepaid credit card works similarly to a debit card in that you will have to add funds from a checking account/bank account or with cash before you use it. You may have some credit available to use right away in some cases. However, it takes making steady monthly payments to earn credit from your credit card lender in most scenarios. The great thing about a secured credit card is that you don’t have to have a good credit score or any credit history. Additionally, you can help build or improve your credit score with on-time payments. A prepaid debit card can also help avoid credit card debt since minimal or no credit is involved. 

Best Uses for Credit Cards

If you haven’t used a credit card before, you may be wondering why so many Americans have them and their best uses. Here are a few of those, highlighting why some people may think it is impossible to survive without them: 

Emergency Expenses 

One of the most common and best uses for a credit card is for any emergency or unexpected expense. These can include medical bills, unexpected car repairs, home repairs, pet care, etc. In a few ways, credit cards can be a convenient way to pay for emergencies if you already have a credit card you can use. It takes away the hassle of applying for a new loan or financing option. Instead, you can take care of your unexpected expense right away with a credit card that you already have.

Everyday Expenses for Rewards

Another way to best use a credit card is to use it for everyday expenses and then pay the credit card bill right away. Most credit cards have rewards and cashback for groceries, gas, and other everyday purchases. Percentages for rewards can range from anywhere from 1%-5%. Although it may not seem like a lot, it can definitely add up over time. If you can handle using your credit card every day and paying off the card right away, it can be a great way to get rewards for things you will buy anyways. 


Another best use of a credit card is using them for travel. Frequently you will save money on a trip or get special rewards if you book all of your travel expenses on your card. A few examples of travel expenses that can get rewards if paid through a credit card include flights, car rentals, and hotels and stays. Using credit cards when traveling is also safer than debit cards. If you lose your debit card, it is harder to dispute transactions. 

Balance Transfers

Another potentially good use for a credit card is a balance transfer. A balance transfer is when you transfer all of your debt onto a credit card. There are credit cards that offer a 0% introductory interest rate, making them an excellent option to pay off other high-interest credit card debt and loans. 

Advantages and Disadvantages of Credit Cards?

Below are some of the pros and cons of credit cards: 

Pros of Credit Cards

Here are some of the significant advantages you can look forward to with a credit card:

  • Rewards — As mentioned above, with credit cards, there are rewards that you could get with all kinds of purchases. Over time these rewards could mean getting cash back or saving money on certain purchases. 
  • A Good Way to Build Credit — One of the most significant advantages of credit cards is the easy way to build credit for financial stability. You can use a credit card for years, and if you make on-time payments each time you pay it, you can quickly build good credit. Credit cards are usually the first step for beginners trying to establish a positive payment history or build a basic credit portfolio. 
  • Convenience — Because you can use a credit card multiple times, it is one of the most convenient borrowing options out there. Unlike a loan option, you don’t have to worry about applying a second or third time; simply keep track of your credit limit.

Cons of Credit Cards

Below are some of the cons of using a credit card: 

  • Potentially High-Interest Rates and Fees — Credit cards can have high-interest rates, especially if you have poor credit scores. Interest payments will also change depending on how much money you spend each month. There are also fees associated with credit cards like annual fees, processing fees, foreign transaction fees, and over-limit fees. 
  • Harmful When Misused — If you have bad spending habits, having one or multiple credit cards can be a considerable trigger tha6 exacerbate them, especially when shopping online. The good news is that there are strategies out there that can help you stop overspending and save money. 
  • Credit Card Debt Can Add Up — Credit card debt is one of the largest disadvantages of a credit card. Many Americans struggle with multiple maxed-out credit cards. The good news is that there are ways to prevent this cycle of debt, even if you have just a single credit card, and even pay off credit card debt over time. 

Building Credit Without Using Credit Cards?

Building credit without a credit card is possible. Here are a few ways you can build credit: 

  • Rent PaymentsIf your rent payments get reported, they can help build credit (you can talk to your landlord about this or choose a third party to report them). When your rent payments are reported and are made on time, those timely payments will show up on your credit report. 
  • Having a Phone Plan — Another good option to build credit is a phone plan. If you have a phone plan under your name, depending on the loan contract and phone company you are using, your payments may be reported to all three major credit bureaus. If you make your payments on time, this can be another great way to improve and build your credit without taking out a credit card. 
  • Being an Authorized User On Someone Else’s Credit Card — Another option you can consider when trying to build credit but not wanting a credit card on your own is to become an authorized user on someone else’s credit card. For most people, this can be a parent or spouse, and you don’t even have to actually use the card to get the credit reporting benefits. Before doing this, ensure that this other person makes their monthly payment on time. 
  • Federal Student Loans — If you went to or are attending college, the first loan option you probably encountered were federal student loans. If you took out any federal students loans under your name, on-time payments would be reported to all three major credit bureaus. Paying off these loans is another good way to build credit without taking out a credit card if you don’t want to. 
  • Major Credit Milestones — Some significant milestones in life will involve credit. For example, a car or home loan will be a part of your credit history. These loans are usually for a long time, and large loan amounts and paying them off on time can be a massive asset to your credit scores. 
  • Loan Options to Consider — If revolving debt like credit cards do not seem like the best option for your finances and spending habits, standard loan options that you borrow once and pay off monthly can definitely help you build credit. Bad credit loans include a payday loan online, a bad credit personal loan, or a title loan. Good credit loans include your standard personal loan options. 

There may be several reasons why you don’t want to have a credit card. And although credit cards can be helpful for emergencies and come with perks, they also can lead to debt. And so, if you really want to avoid them, the good news is that surviving without a credit card is definitely possible! There are other ways to borrow money when you need to and build credit history!


Build credit without using credit cards | Chase
Credit Cards: The Pros and Cons | Credit Cards and Reports | Credit and Debt | Topics | 360 Degrees of Financial Literacy
How many credit cards does the average American have?

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