7 Ways to Avoid Using Credit



I am not quite out of debt yet, but I have dug myself out of a huge hole over the past year-and-a-half.

The process of being free of the burden of debt is liberating. I am done with borrowing money from banks. I plan on staying debt-free and frugal forever!

There are some trade-offs I have made in the process. It has been harder to live without a credit card and borrowing at times. I am committed (to the best of my ability) to live a credit free life from here out.  Here are some ways I stopped using credit, and ways you can stop as well:


  1. Save an emergency fund. My emergency fund used to be my credit cards — if there was an unexpected expense, the card came out to the rescue. $120,000 in debt later, I realized that wasn’t the way to go.  Instead, I built up an emergency fund of $1000 as quickly as I possibly could.  When I am done paying off my debt, I will be using the money I’m not paying towards debt to build up a healthy emergency fund, keeping me out of debt when something unexpected comes up. I will be working to build up 6 months’ worth of living expenses in this fund.
  2. Save for goals. Create a separate savings account for every goal you have. I have an account for a new car, for yearly trips, for a bicycle, and my kid’s college. Decide on your highest-priority goals, and set a dollar figure. Now save towards those goals. Without debt, it should be fairly easy.
  3. Get a debit card. If you need to use a credit card in certain situations, such as buying something online, often you can use a debit or check card instead, if it has the name of a major credit company such as Visa or Mastercard. Be careful with this!  Plastic still is way less painless to swipe than paying cash.  You must be vigilant about keeping track of the bank account.
  4. Buy a car on cash. Many people disagree with me on this one, but it’s very possible, and many people do it. Instead of making loan payments, and paying double the price of the car or more over the term of the loan, you can make savings deposits, and end up with the amount it costs to buy two cars in your bank account over the course of five years. I had two cars with massive payments, so I sold them and bought a total beater that I could get 2 years out of.  In the meantime, I put payments in the savings account and off I went toward cash for a car!
  5. Invest for retirement. Imagine putting all of your debt payments in a retirement account each month??  I put about $2000 a month towards debt now. That has early retirement written all over it if I stay the course.
  6. Use PayPal online. If you must buy something online, and don’t want to get a credit card (or a debit card), in many cases it can be done with PayPal — meaning that you must have the money before you make the purchase. Paypal even will send you a debit card if you like.  It’s a pretty good option, as long as you budget!

Credit cards have not been around for very long.  Our close relatives managed to do just fine without them.  We can do the same by living within our means, spending less than we earn, and not using credit.  Good luck!


  1. Great tips! An emergency fund is so important because unplanned expenses are just bound to happen. They happen to me all the time!
    Holly@ClubThrifty recently posted…5 Reasons I’m Killing My MortgageMy Profile

  2. Another good way to buy things online is to use a prepaid card. Technically you are buying with cash. More importantly, you are not exposing your financial accounts online, your exposure with a prepaid is limited to how much money you have on it.
    Jose recently posted…The Axeman Cometh – Dealing with the Loss of a JobMy Profile

  3. Love the tips here, Tony, especially the one about paying cash for a car. We vowed after our last massive car payment that we’d never have one again. Cash is the way to go for us too.
    Laurie @thefrugalfarmer recently posted…Ways to Handle Unexpected Family ExpensesMy Profile

    • Good luck with that, Laurie! My only concern is that the used car doesn’t need major work. That can be a plan squasher. Otherwise we are fine!

  4. Of course you can buy a car cash! In Europe it is quite rate that people finance their cars. We just wait until we have enough and buy a model we can afford. It is rocket science. I do wonder however what makes us more credit averse than the US. We would seldom buy anything but mortgage on credit.
    Pauline recently posted…Bang for your buck, La France editionMy Profile

  5. Great tips! My grandfather always paid cash for his cars and would have the toughest time getting a dealer to sell him the car, because they’d make so little off of it. :)
    John S @ Frugal Rules recently posted…4 Great Ways to Enjoy March Madness at WorkMy Profile

    • John, our grandparents had it right! I am still trying to implement the advice they gave me when I was younger (I didn’t listen back then).

  6. Great post! The first step to getting out of debt is to stop using credit, so I don’t think the importance of these tips can be overstated.

  7. Sounds like you are doing the Dave Ramsey. You’ve got the mind set and that is the very important first step..
    Marie at Family Money Values recently posted…When is the Cost of a Conference or Seminar Worth the Price?My Profile

    • Marie, Dave Ramsey was a huge influence at first. I followed his program, then incorporated other philosophies and habits. Basically, spend less than you earn. Whomever can help you with that, great!

  8. We purchased our vehicles in cash. We saved our money for them and it’s nice not having car payments or paying interest either. An emergency fund is a must-have. Nothing can derail your financial stability than something unexpected. It can be hard enough dealing with whatever life throws at you, but at least you know you’re financially okay. I think debit cards are a good alternative to credit cards, especially because many hotels, etc don’t take cash these days. The only thing to be aware of is hotels and car rental agencies, often put a hold on more money than the actual bill until your bill is finalized.
    Shannon @ The Heavy Purse recently posted…Money Conversations: Shopping with TaylorMy Profile

  9. I wonder why people would disagree with you about paying for a car with cash? It’s a depreciating asset, so to pay interest is just silly!

    The only exception might be if its 0% interest. However, if you’re getting 0%, you’re buying new which isn’t very frugal either. Let someone else cover the depreciation.
    Mr. 1500 recently posted…Thursday Rant: It’s only a DollarMy Profile

  10. Tony – good post – hey, I’ve been trying to get thru on your contact page but after I hit submit, it wipes my message saying the information incorrect – any good ideas?

    • Hi Moni: That is very strange. I receive contacts through that form all the time. Try emailing me.

      • Hi Tony – can’t for the life of me find your e-mail addres. Do you want me to ask Colleen to send thru or are there details somewhere that I’ve missed. I’ve even tried a few combinations of your name and web name.

  11. On most credit cards, you can set the amount to be paid in full each month. This way you not only smooth your cash flow out but also gain what protection the card offers on purchases. In the UK card companies are jointly liable for a purchase over £100 and under £30k (eek – on a credit card?). So is s product is not delivered, goes wrong or something within the warranty period and the original company has gone bust, you can claim against the credit card!
    John@MoneyPrinciple recently posted…Getting a new car makes financial sense: meet our Skoda CitigoMy Profile

  12. Great tips Tony. I used to only use my debit card online and won’t do that again. I only use credit online. It is so much safer and easier to deal with. I am on board with the other tips.
    Grayson @ Debt Roundup recently posted…How TurboTax Can Make Your Life EasierMy Profile

  13. Hi Tony,

    Excellent Tips. Stumbled upon this blog and I love the title. =)

  14. These are amazing ways to save. One trick I’ve also learned(shared by my lovely wife) is to delay buying it. Next thing you know, you realized you don’t actually need it.
    KC @ genxfinance recently posted…Rent A Cow and Save on Taxes, Tax LoopholeMy Profile

  15. Can’t stress the importance of saving money and having an emergency fund. My parents never bought anything on credit. I’m not sure where I went wrong, but I’m trying to be more like them now.
    Kim@Eyesonthedollar recently posted…The A-Z of Saving Money-Ebook Launch and $250 GiveawayMy Profile


  1. […] @ We Only Do This Once writes 7 Ways to Avoid Using Credit – Credit cards have not been around for very long. Our close relatives managed to do just […]

  2. […] @ We Only Do This Once writes 7 Ways to Avoid Using Credit – Credit cards have not been around for very long. Our close relatives managed to do just […]

  3. […] @ We Only Do This Once writes 7 Ways to Avoid Using Credit – Credit cards have not been around for very long. Our close relatives managed to do just […]

Leave a Comment


CommentLuv badge