Australians use different payment methods. While paying in cash is quite common, the use of credit cards has also become a go-to way to pay for products and services in Australia. In fact, there are studies which reveal that credit card debts, together with personal loans, are beginning to get out of control. Credit cards have made it very convenient for people to spend money that they don’t have. As a result, some people find it hard to get out of credit card debts. Of course, it helps to compare credit cards from different banks as they come in various features. So it pays to do your research to get the best credit card deal.
If you prefer to use your credit card instead of cash for payments, chances are you’ll have more debts and you may end up paying huge monthly repayments.
But what if you stop using your credit card for a year? For some, this may be easy, but for others, it will entail planning, budgeting, and a change in mindset. Not using your credit card for 12 months can in fact be beneficial. Here are the three benefits of stop using credit cards:
You can get discounts
The mere act of using cash for payments on various products can offer certain discounts, which you probably won’t get when using your credit card. In general, all you have to do is to ask if you can save some money just by paying in cash. There is usually a credit card fee of up to 4% of the purchase price, so not using your credit card for a while could possibly lead to more discounts for your purchases.
You can be debt-free sooner than expected
If you prefer to use your credit card instead of cash for payments, chances are that you’ll have more debts and if you’re not careful, you may end up paying huge monthly repayments. This wouldn’t be a problem if you can afford to pay in full every month. By not using your credit card for 12 months, you could possibly pay more than the minimum repayment per month. Later on, you will be able to pay in full and before you know it, you’ll be able to get out of debt much faster.
You can save money
A lot of people have this mindset that a credit card is an extension of your cash. Sure, you will be able to buy what you want but the problem is that people tend to spend money that they don’t have. If you stop using your credit card for a year, you can get out of debt more quickly, enabling you to allot more money to your savings.
Do you know other benefits of not using your credit card for a year and how to compare credit cards in Australia? Share your ideas in the comment section.