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Illinois bankruptcy: You can live without credit cards

Many Illinois residents have been impacted by the recession in one way or another. Some of those residents ended up in such dire financial straits that they filed bankruptcy in order to get a fresh start with their finances. Once all of a filer's credit card debt is discharged, many people decide to live without credit cards. The question is how to do it?

Many retailers, car rental companies, airlines and hotels don't accept debit cards unless they have the Visa or MasterCard logo on them. If a consumer already has one of these debit cards, it should be accepted just about everywhere. The big difference, however, is that there has to be enough money in the consumer's account to cover any charges. Many car rental companies, airlines and hotels will "hold" a certain amount of money on a credit card. This has to be factored into the equation before using a debit card.

Living a cash only life can be a challenge, but there are more options out there than most people realize. Layaway, cash, checks, PayPal or pre-paid cards are all good options for purchases without having to use a credit card. It is also a good idea to build up an emergency fund as soon as possible. It is often recommended that people have at least three months of living expenses in savings.

Anyone trying to rebuild their credit in order to someday buy a house or car may find it necessary to have a credit card. However, this may only be necessary if there is the possibility of taking out a loan in the future. For example, not many people are able to buy a house for cash these days. At the end of the day, filing bankruptcy can give a consumer the fresh start they desire; and many people in Illinois are choosing to make the most of that opportunity by not getting back into debt.

Source:, "Living Without Credit Cards: She Made It Work, and You Can Too," Michele Lerner, March 13, 2013

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