Liz Pulliam Weston is suggesting using cash rather than plastic because of an inclination to overspend. I’m a big fan of credit cards. Most offer fraud protection and online reconciliations so I always know exactly what I am spending. When I pay the balance off at the end of the month, it’s also nice to know I’m getting some money back in the form of a rebate. (For me, debit cards are right out — usually they offer no protection and there is the possibility it can wreak havoc on checking accounts, which are sensitive to overdrafts.)
Perhaps the amount of money I would save by using cash instead of credit would outweigh that rebate. I do find myself thinking twice when I have to pay for something with cash. Perhaps on a semi-subconscious level, I’m a better saver when I’m not flashing plastic.
The convenience, safety, and tracking that credit cards offer is too tempting to allow me to stray. Even with my diligent record keeping, I know that there’s an amount of cash I spend every month that somehow misses my scrutiny and doesn’t make it into Quicken. I just consider that a “cost of doing business,” but I think the “lost” money would be much higher if I used cash more. I like my online credit card statements.
Liz offers a good reason for sticking with cash, for those who need spending discipline: With cash, you can’t spend what you don’t have.
Do you find yoruself stopping to think twice about a purchase when you use cash more than when you use plastic?
Updated July 14, 2010 and originally published March 27, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.