We all submit to the ever increasing need to own a credit card to make up for the lack of savings to fund extravagant lifestyles expressing the notion that you only live once and you might as well live properly.

Well we all know that a credit card is bad news but research has found that people without a credit card end up saving 20% of their previous spending without feeling deprived.

Having no credit card removes the ability for impromptu purchases and as such people make more reasonable decisions.

You begin to develop a discipline to spend less and pay more attention to what you need rather than what you want.

Too many people fall into the trap of buying things they want and thinking ‘oh I’ll pay it later and find themselves in a sinking ship with interest hitting the 13%-28% depending on the transaction.

Credit cards distance you from your hard earned money and many people find it a thrill to be spending money that is not theirs –But guess what? It will be theirs plus a lot of interest within a short period of time. Now that’s not so nice!

However there are disadvantages of having no credit cards.

This includes the inability to accumulate rewards – However most of us have no idea how they can be accessed or how much you have to spend to acquire a free kettle.

Other problems can surround the acquisition of the all-important credit history as without one means you are a ghost in the lending market and bankers think you are a bigger risk than someone with extreme debt. This means either you won’t be offered a loan even if you hold a deposit or the interest rate will be much higher.

With the introduction of the debit card in most banks in Australia you have all the perks of the credit card being able to buy online immediately and pre-book accommodation and well everything a credit card can do without spending money which is not yours. If you have a tendency to splurge perhaps it is time to acquire a debit card instead of a credit card.

You can condition yourself to use a credit card properly by paying back balances within the time frame before interest is charged, ensuring that you don’t put more on than you can pay out in that period and then you can take advantage of accumulating those reward points.

If you cannot commit to these goals then scissors may be the only way to take back control of your finances.