Is it better to pay cash for everything, or pay

[Lux Et Veritas Academy]

on your credit card and pay it off each month? What do you do and why?

 

I personally love the perks of the miles for airlines and hotels, but I have often wondered if I would save more doing straight cash? Plus I don't like toting around cash!

[Mom2legomaniacs]

We do the 2nd. Never carried any over. Easy record for us all on the statement. Then we don't have to worry about constantly keeping track of cash and receipts and such.

[KIN]

We use all cash, except for a debit card we use for gas. Dave Ramsey says that if you use cash you spend less than if you use a credit card and pay it off each month. Dh and I have proved that correct. Cash just somehow "hurts" more when you spend it. Plus, it is easy to see exactly where you are at. When the cash is gone... it's gone. With a credit card it is very, very hard to know exactly how much money is left when you are using it.

[HomeOnTheRanch]

I agree with Kathy. This week is the first we've gone to strictly cash (we read DR books last week). Although we get cash back with CC, I know we saved money by not buying extras this week that we would have otherwise. I consider myself very frugal, but I've been even more so this week! I'm sold on using cash!

[claire up north]

We put everything on a credit card & pay it all off each month. I prefer Discover because I get a little extra bonus when I spend my "earnings" at Lands End. I charge groceries and stuff throughout the year and then use the credit to buy all the coats, boots, hats, snowpants, etc. that my kiddos will need through the winter.

 

My big problem with cash is that if I have it, I'll spend it. If I have $5 in my pocket, well, by golly, I simply MUST have a mocha latte from Caribou. This is a total psychological hang-up (which I blame squarely on my parents;) ); I usually don't even really want what I MUST buy.

 

What's really funny is that I am pretty frugal when I don't have cash. Guess I'm the exception that proves Dave Ramsey's rule, eh?

[Lolly]

You don't get discounts for cash. I get cash back for using my credit card. I do pay it off in full every month. If you have the discipline to do it this way, it is more economical. If you tend to miss a payment, all gained is lost instantly.

[Lolly]

We use all cash, except for a debit card we use for gas. Dave Ramsey says that if you use cash you spend less than if you use a credit card and pay it off each month. Dh and I have proved that correct. Cash just somehow "hurts" more when you spend it. Plus, it is easy to see exactly where you are at. When the cash is gone... it's gone. With a credit card it is very, very hard to know exactly how much money is left when you are using it.

Not true here. I tend to think more about putting it on a credit card. Cash, I jsut spend and go to the bank and take out more. With credit, I think about that total that is coming on bill day. I don't want it to be too high. Cash is burned like fire, there and then gone.

[Parrothead]

Cash. Dh and I have learned that we are not good with CCs.

[FloridaLisa]

We went to cash about a year ago and I absolutely love it. At the same time we went to cash, we made a budget. My frugal self keeping feeling like I could never spend (though I *did* spend). My cash is now divided up into envelopes for each spending category and I feel so free to spend it or save it! Dh and I each have a personal category, so no more guilt! The money is there and has already been accounted for.

 

I also like having the cash as I can use it anywhere -- from kids needing money to restaurants to the babysitter. No messing with checks or the zillion stops at the ATM.

 

Given our budget, I could spend every dime in my purse and we'd still be in the black at the end of the month. But, I love shooting to have money leftover. It goes into my own kitty that I use for whatever. Our vacation this year was completely paid for out of my "savings." Instead of writing a hefty bill at the end of the month for past spending, I get to deposit money into my account.

 

If you have doubts, why not try cash for a month or two and then compare the savings vs. the benefits you are getting from your credit card?

 

HTH,

Lisa

[mommytobees]

on your credit card and pay it off each month? What do you do and why?

 

I personally love the perks of the miles for airlines and hotels, but I have often wondered if I would save more doing straight cash? Plus I don't like toting around cash!

 

The only cash-cash we have (other than for emergency cash on hand) is for the kids. They get their "pays" in cash to teach them how to manage their money.

 

I pay everything via debit or credit card. I do it along side the Dave Ramsey envelope system. I "deduct" my spending from the total and keep receipts. THEN, I turn around and once/twice (right after shopping) and transfer the money from my checking account to the credit card (same bank). So, for me it is the same as using cash.

 

This gets me between $500-$1000 a year in "return" from my bank's credit card company. And, I pay ZERO interest.

 

I can see how this could get someone into trouble. BUT, if you are good and well disciplined, it isn't a problem. In other words, _I_ may do this. My dh may _NOT_ do this.

 

Kris

[Alessandra]

Mostly credit (paid off in full each month):

-- build up my credit rating****

-- easy returns

-- perks, like cash back or Amazon credits. I make sure to use the card that will give me the most perks.

 

But I use cash:

-- when there is a cash discount

-- when card would be taken out of my sight (as in a restaurant) and possibly put through one of those readers that would get my info off the magnetic strip.

 

This is the biggie -- thinking about best rates on any future mortgage, should I ever need one -- things like that.

[mommytobees]

We use all cash, except for a debit card we use for gas. Dave Ramsey says that if you use cash you spend less than if you use a credit card and pay it off each month. Dh and I have proved that correct. Cash just somehow "hurts" more when you spend it. Plus, it is easy to see exactly where you are at. When the cash is gone... it's gone. With a credit card it is very, very hard to know exactly how much money is left when you are using it.

 

This is why I still use the envelopes. I've noticed if I'm not good at watching the dollar amount, I will spend more. But, when I'm required to write it down and WATCH the budgeted amount, THEN I spend the same as cash.

 

Kris

[melissel]

I can see how this could get someone into trouble. BUT, if you are good and well disciplined, it isn't a problem. In other words, _I_ may do this. My dh may _NOT_ do this.

 

:lol::lol:

 

I'm struggling with this myself. I definitely spent more when I was using my credit card because I told myself, "Oh, it's OK, we're paying it off at the end of the month." And we always did, but I was still spending more than I should have instead of putting that money away in the bank.

 

However, we've been trying to do the envelope system and I'm having a VERY hard time keeping track of where the cash is going. I miss being able to just look at my account online and see who spent what where. This has the added bonus of my being able to see where DH is spending money too :D

 

I'm toying with the idea of doing something like mommytobees does: I have my budget categories set, and I can transfer the money immediately. In fact, soon I'll be a Citi banking customer again (via the Wachovia buyout), and our CC is a Citi card, so I'll be able to transfer money even more easily. I haven't decided yet, but I do know that my current confusion is as bad for our budget as using CCs is supposed to be!

[KidsHappen]

Cash somehow just disappears and nobody knows where it went. There is always a paper trail for a debit card and we are each held accountable to the other for any charges that are made. We use MSN money and this makes it very easy to keep track of all our spending. We have been doing it this way for at least five years now. It works for us.

[Melissa in FL]

We use CC. We really like getting something back for using them. I know not everyone can, but I'm much better using CC than cash. With cash, I stop and spend more. With CC I only use it on planned things. I earn about $15 a month in free books with my Waldenbook card and I hardly spend any of my own money on books for me. My Dh has been using his sears rewards card lately. He earns points which can be traded for many things. He's been saving them up to earn the $200 gift card to sears. Our grill broke in the middle of the summer, we just went to sears to buy a new one tonight. Grill originally cost $249, was on sale for $199, we had a 10% off coupon, and paid for the rest with our free gift card because we use their card!!

 

For those who can it's a great way to get something back for shopping. Some people just can't do it. I love my SIL but she just can't handle a cc. Dh and I always carefully plan all our spending, but with a cc my SIL is like a totally different person. She does not see it as spending money and goes nuts!! So, I guess it's a very individual choice.

Melissa

[Confuzzled]

We switched to cash in categorized envelopes about a year and a half ago and it has made a huge difference in our spending. I didn't believe that the statistics about how using plastic causes greatly increased spending applied to me. I though I was already extremely frugal and I resisted the change.

 

The first month we tried it, I took my $25 in cash we had budgeted for eating out to our favorite Chinese take-out. We spent about half as much as usual! I was determined to make my cash last as long as possible and we ordered less food and had fewer leftovers than usual. We haven't looked back.

 

The only cash I actually carry around is my monthly spending money. I can spend it on whatever I want and don't have to account for it to anybody. So if I want to spend it all on Starbucks I can. But when it's gone, it's gone.

 

The other envelopes only go into my purse when I know I'm going to need them. For instance the grocey money envelope stays in the cabinet until I'm heading out the door to buy groceries.

 

I don't really understand the reasoning that using a credit card helps a person keep track of spending better than the envelope system since the cash is categorized into envelopes.

 

I do use my debit card to buy gas so I don't have to go in.

 

Kris

[Rosie_0801]

Dh does our family finances online for the most part, pays for the shopping using his debit card and withdraws cash as he requires it. I withdraw my housekeeping each fortnight because I like money to touch my hand before it moves on, then I know what's happened to it! I think these differences between us are due to him growing up with the security of money behind him, and me growing up without :) We will both use our credit cards when ordering things online, but that's a credit function on our debit cards; our money, not credit. I expect we'll run into some trouble when it comes time to buy a house, because neither of us will have a credit rating, never having borrowed. We'll sort that out when we come to it, and that won't be any time soon!

:)

Rosie

[melissel]

I don't really understand the reasoning that using a credit card helps a person keep track of spending better than the envelope system since the cash is categorized into envelopes.

 

I don't really understand it myself. I just know that I've felt far more out of control with our money in the last few months since I started the envelope system. I thought I'd feel more IN control. I haven't given up entirely, but I'm open to the idea that I might need a hybrid system. I also tend to spend cash when I have it in my hands, and then wonder where the heck it when it's run out 5 days before the end of the month. I hate that feeling!

[Danestress]

on your credit card and pay it off each month? What do you do and why?

 

I personally love the perks of the miles for airlines and hotels, but I have often wondered if I would save more doing straight cash? Plus I don't like toting around cash!

 

I don't like to carry cash. I am absent minded. I leave things laying around. I can't tell you how many times I have lost my wallet. Sigh.

 

I feel better using a credit card. I get a statement allowing me to account for every penny I spend. And if my purse is lost or stolen, I cancel the card. Easy.

[mommytobees]

:lol::lol:

 

I'm struggling with this myself. I definitely spent more when I was using my credit card because I told myself, "Oh, it's OK, we're paying it off at the end of the month." And we always did, but I was still spending more than I should have instead of putting that money away in the bank.

 

However, we've been trying to do the envelope system and I'm having a VERY hard time keeping track of where the cash is going. I miss being able to just look at my account online and see who spent what where. This has the added bonus of my being able to see where DH is spending money too :D

I'm toying with the idea of doing something like mommytobees does: I have my budget categories set, and I can transfer the money immediately. In fact, soon I'll be a Citi banking customer again (via the Wachovia buyout), and our CC is a Citi card, so I'll be able to transfer money even more easily. I haven't decided yet, but I do know that my current confusion is as bad for our budget as using CCs is supposed to be!

 

The bolded is EXACTLY why I started to do this in the first place. Using cash was great, but had two problems: 1) it meant that I wasn't spending the money in a way to get the credit card "refund" and 2) I struggled with the occasional missing receipt.

 

Now, if I happen to lose a receipt it isn't a big deal because I have the amount on the internet at a fingers reach.

 

Kris

[mommytobees]

I don't really understand the reasoning that using a credit card helps a person keep track of spending better than the envelope system since the cash is categorized into envelopes.

 

I do use my debit card to buy gas so I don't have to go in.

 

Kris

 

I find that the credit card / debit card helps me keep track of the little purchases.

 

We head to the mini-mart here about 1-2 times a week. Now you have to understand, the commissary here is 30 - 45 minutes away (about $6 via train or $4 in gas) and it is a GOOD DAY when you don't have to go to the main base. So, when we need something that we run out of we walk to the mini-mart.

 

So understanding that....

 

On average we spend $5 each time. $5 a trip, 4-8 times a month. When we have cash, we usually end up 1/2 of the receipts at the end of the month. I can't track what we spent, because a receipt got lost on the way home. Where as if we used a card, I can track it lost receipt or not by going online and seeing what was spent on this day at this time. Then, I transfer the money from the checking account to the credit card right after we go to the commissary or shopping out in the local economy.

 

My dh, when he is in port likes to pick up ______ on his way home/to work/on duty day (whatever). He knows he is allotted X number of dollars. If he isn't sure of WHAT he has, he calls/e-mails me to say "Am I broke?". I tell him what he has, then he uses the card for bits and pieces. If HE had cash, it would be eaten within 2 weeks. With the card he will spend less, because he doesn't know what he has and knows he has to have enough to get through the entire month. (I'll feed him lunch, but if he's gunna blow his food money on coffee he can forget it!!!!! :glare::D)

 

PLUS, when he gets to the end of the month and wants to know why he was out of money by the 3rd week.... I can pull up the month's credit card statement online and say, "You spend X here, and Y here, and D here." And, he'll look back and say, "Ooops, I shouldn't have gotten that paperback book."

 

Hope that makes sense.

 

Kris, the other one

[ma23peas]

Credit cards all the way, I am held accountable..I almost never have cash..literally I wanted a drink out of the machine so bad today at debate class...couldn't even find 2 quarters!

 

On a cool note, we managed frequent flyer points for all of us to England 3 years ago...by next summer we'll have enough for our Germany/Austria trip...we're learning German now to get ready for it....we travel off season and our international trips cost less than Disney here in the states!

 

Tara

[Jane in NC]

From reading this thread it is clear that what is best is what works for you.

 

But there is another issue that I would like to bring up which is the cost paid by business for credit card usage. Some argue, I know, that people buy more when using CCs so business is happy to pay a cut to Visa or whatever CC company. That is not my point.

 

When I buy something locally from a small business owner I always pay with cash or paper check because it is my impression that the business owner will make more money off my transaction this way. CC fees are what? Someone help me out here, please.

 

Say the fee is one percent and say I am spending $100. By paying with cash or a paper check, my local small business owner has a dollar more in his pocket. Not much, but it would seem by the end of the week this could add up if others left the national credit card companies out of this equation.

 

Perhaps a small business owner could chime in with an opinion.

 

Jane

[Prairie~Phlox]

Well I don't spend more just because I'm putting groceries on a cc. I know that I have to have the money to pay it off at the end of the month. We use Discover & get the cash back. Each year it's between $100-200. Our bank debit card also has rewards, for every $2.00 you spend using Credit, not debit. You get a point. You can earn prizes (but the prizes start at 2,000 points and this program just started!

 

Phlox

[Mom0012]

I have a Barnes & Noble credit card and we put everything on that. I get a $25 gift card for every $2500 I spend and this is how I buy most of my Sonlight books each year as well as many other school books that I need.

 

Lisa

[SquirrellyMama]

We use cash envelopes too. We used to do cc's and pay them off each month but I definitly spend more with cc's. The rewards didn't matter because I spent more than was necessary.

 

I was afraid to go to cash because cash is easy to spend but with a budget I can't spend more than I have. My dh is the budget guy and he questions all the transactions over the budgeted amount. I like the months when I don't get a "where did this $5 come from on the bank statement".

 

I don't carry all the cash with me. The trips we take are carefully planned so we know which envelope to take.

 

Kelly

[Academy of Jedi Arts]

My FIL is a CPA and would tell you that American Express is his currency of choice. You pay off the balance each month. Carrying a lot of cash around or storing it in your home is not a smart thing to do. If you need help understanding credit or finances, find a good accountant. It will do wonders for you.

[elegantlion]

We don't use CC, we pay cash for everything. We use debit, one time debit cards for online purchases and vacations (or evacuations this year).

 

My dh does not get paid on a regular basis, so we prefer not to have a balance due anywhere.

[SquirrellyMama]

My FIL is a CPA and would tell you that American Express is his currency of choice. You pay off the balance each month. Carrying a lot of cash around or storing it in your home is not a smart thing to do. If you need help understanding credit or finances, find a good accountant. It will do wonders for you.

 

 

We don't have enough cash in our house to worry about each month. We also don't carry a lot of cash with us. We plan our trips so we know exactly what we need to carry. At most its $200 for groceries. We understand our credit and finances and that is why we have chosen to use cash. We have paid off more debt since starting the cash system than when we used cc's and paid them off every month. Finding a good accountant might be a wise choice for some but is also expensive. We don't need an accountant to do us wonders. We have done wonders by ourselves with cash and budgeting.

 

I'm sorry but I found that comment somewhat offensive. Its like someone telling me I can't really educate my children because I'm not a teacher. You are telling me I don't know what I'm doing because I am not a CPA or don't have one.

 

Kelly

[TraceyS/FL]

When I buy something locally from a small business owner I always pay with cash or paper check because it is my impression that the business owner will make more money off my transaction this way. CC fees are what? Someone help me out here, please.

MOst *small* businesses are paying 2-5%. Bigger stores are able to bargain for lower rates.

 

Most small business owners would probably thank you for that consideration.

 

My FIL is a CPA and would tell you that American Express is his currency of choice. You pay off the balance each month. Carrying a lot of cash around or storing it in your home is not a smart thing to do. If you need help understanding credit or finances, find a good accountant. It will do wonders for you.

We used to use our AMEX card exclusively.

 

We cold-turkey stopped (wasn't that a horrid month), and cut our spending by $700+ a month. We always paid it off - but we were for sure spending because we could swipe and know we had to pay it.

 

That $700 got moved in one big chunk to day care. We went from Home Day care to a Center - that was the going rate. OUr day to day living didn't really change once we went to NOT using it, we just didn't eat out as often and such.

 

We are 99% cash based here. We have a pre-paid debit card - DH gets paid from his 2nd job on it, and we have a few things that pay from it automatically. We just load it - and yes we pay to load it, but i factor that into the cost of using it and buying what i am.

 

DH does have a problem with cash - but to go that rant would violate the husband bashing rule..... i have a budget, i have envelopes, he just doesn't fill them :glare:

[PariSarah]

Depending on the study, you spend anywhere from 12 to 33 percent more when you pay with plastic. And the risk of losing twenty or thirty dollars in a mugging, or a couple hundred in a home robbery, once or twice in your life, doesn't remotely compare to a 33% "sales tax" on everything you buy, every day, every year.

 

That said, I haven't given up my credit card. I use it for big-ticket items where I don't really have control over how much I spend anyway--medical visits, auto insurance, etc.--and I pay it off immediately. I never use it for something I don't already have budgeted. Dave would say that I'm playing with snakes, and I'll probably get bitten, and he may be right. But I bought last semester's books on amazon, using my rewards. A semester's worth of books is a big deal to me right now. Worth the effort of having to pay attention and make sure they don't try to scr*w me somehow.

[Kari C in SC]

The only cash-cash we have (other than for emergency cash on hand) is for the kids. They get their "pays" in cash to teach them how to manage their money.

 

I pay everything via debit or credit card. I do it along side the Dave Ramsey envelope system. I "deduct" my spending from the total and keep receipts. THEN, I turn around and once/twice (right after shopping) and transfer the money from my checking account to the credit card (same bank). So, for me it is the same as using cash.

 

This gets me between $500-$1000 a year in "return" from my bank's credit card company. And, I pay ZERO interest.

 

I can see how this could get someone into trouble. BUT, if you are good and well disciplined, it isn't a problem. In other words, _I_ may do this. My dh may _NOT_ do this.

 

Kris

 

This is pretty much what I do. I don't actually use Dave Ramsey's envelope system. I just transfer cash from my checking to my savings about once a week. I like that I can see exactly where we spent our money. DH cannot have money in his pocket or he will spend it and have no idea where it went. With the cc, I can see instantly where we spent and how much. We are supposed to be going to OK to see our ds and we will not have to pay for any hotel nights for 10 days because of the points we have accumulated. I love having this hotel thing because it is a fun perk to be able to go and not worry about lodging cost. I also use a Kohls cc when they offer an extra 30% off of purchases. I pay with the Kohls card, turn around buy a gift card with my Visa, then pay off Kohls. It is a win/win because I get the discount and I get my Visa points, then I just pay it from my checking to my Visa. It confuses my mom and sister, but I can keep it straight.

[Murphy101]

we're cash only folks here.

 

however, if you will use the hotel and airline bonus and you absolutely will pay it off every month - then you might save in the long run using the card to some extent.

 

with finances being the way it is though, I have a feeling those perks are really going to be harder to come by, so it might not be worth it.

 

I'd pick the ONE card that has the best perks and ditch all the others.

[Kari C in SC]

 

 

PLUS, when he gets to the end of the month and wants to know why he was out of money by the 3rd week.... I can pull up the month's credit card statement online and say, "You spend X here, and Y here, and D here." And, he'll look back and say, "Ooops, I shouldn't have gotten that paperback book."

 

Hope that makes sense.

 

Kris, the other one

 

Yep! This is what I do with dh too. I can show him WHERE we spent to money by just logging onto our banking. It is a whole lot easier than asking him a million times to keep the receipts.

[PariSarah]

But there is another issue that I would like to bring up which is the cost paid by business for credit card usage. Some argue, I know, that people buy more when using CCs so business is happy to pay a cut to Visa or whatever CC company. That is not my point.

 

<snip>

 

Say the fee is one percent and say I am spending $100. By paying with cash or a paper check, my local small business owner has a dollar more in his pocket. Not much, but it would seem by the end of the week this could add up if others left the national credit card companies out of this equation.

 

I worked for mom and pop stores all through high school and college. They were all pretty happy with the credit card system. It wasn't like the medical insurance system--everyone hates it, but they have to take it in order to have patients. Retailers were all happy to take MC and Visa, because people bought more. Scads more. They tended not to take Discover or AMEX, because the fees were more, and fewer people had them. But they definitely loved Visa and MC.

 

And the chain stores love credit cards. I watched one manager in a store I won't name publicly call Visa and argue for half an hour for a thousand-dollar increase in a customer's credit line so that she could make a sale. They just loved irresponsible spenders.

 

And of course, nowadays, retail chains make more off selling credit than selling products.

 

I can definitely see why Congress is anxious to buttress the credit system. It's what's keeping up the whole economy.

[laylamcb]

on your credit card and pay it off each month? What do you do and why?

 

I personally love the perks of the miles for airlines and hotels, but I have often wondered if I would save more doing straight cash? Plus I don't like toting around cash!

 

We've always charged pretty much everything and paid it off each month. This works for us because we're not "spendy" types.

 

Having said that, I recently read a study about the psychology of the credit card that got me thinking about our spending habits. I always knew that people "spent more" using credit, but I didn't really pay much attention to exactly what that meant until recently. So we're slowly making a switch to cash.

[Kim in Appalachia]

the statements each month look pretty much the same; Walmart, and Pilot. (groceries and gas). I don't carry cash.

 

We spend most of our money when we go on "vacation" (which is visiting family). Vacation is when we shop. On our last vacation I finally got my poor boys some new socks, my dd a sports bra and my husband bought himself some new clothes (something he only does 2x a year).

 

When also use our cc to shop online. We are rural so anything that can't be pruchased at Walmart has to be bought online.

 

We always pay it off.

[dirty ethel rackham]

While I get it that if you use DR's envelope system and cash, you would probably spend less, I am not, nor will I ever be organized enough to do that. I could see myself running out of gas because I kept forgetting to keep cash on me. Or having a grocery cart full of food to put back because I forgot to bring money.

 

We pay for nearly everything with credit cards and pay them off every month. We may spend a little more, but we are generally pretty frugal (at least compared to my family members -some who can affort it and some who can't.) We will be taking a family vacation in the spring from my rewards miles. A couple times I have been late with a payment and paid interest, but that has been a rare occasion. It may not work for everyone, but it does work for us. We are fortunate that our finances allow us to be comfortably frugal, with an occasional splurge here and there.

[Jenny in Florida]

I rarely have cash in my purse, because I tend to spend it if I do. If I know I have to put the purchase on plastic, I will usually think twice and skip it completely if it doesn't seem "worth it."

 

We are not good with credit cards, so we now have just one with a very low limit. We keep that one so that we can use it when absolutely necessary and so that it shows on our credit record.

 

We've found that relying on the debit cards is a good compromise for us. It allows the convenience of not worrying about carrying cash, keeps me from the temptation of blowing money on small, pointless stuff, but doesn't allow us to get into trouble with debt.

 

My husband manages the money, and he has things set up so that a couple of large chunks of his paycheck go into savings accounts immediately each month. One is for our daughter's college expenses and is supposed to remain untouched except for that. The other is just ours, but knowing that we would have to transfer money out of that account and into the checking account to do extra things provides a little check on our spending.

 

I will say that when we were very, very broke, the envelope system was the only thing that made life workable.

[Jenny in Florida]

MOst *small* businesses are paying 2-5%. Bigger stores are able to bargain for lower rates.

 

Most small business owners would probably thank you for that consideration.

 

I just had this conversation with one of my son's dance instructors. He takes most of his classes through the big ballet school, but has recently started taking tap with someone else. We pay there weekly, and I occasionally forget to have cash or a check with me. One day, I asked if she could put the tuition on my debit card. And she explained that, while she does accept plastic, she much prefers cash or checks, because it costs her money every time she runs a credit transaction.

[Lux Et Veritas Academy]

This is pretty much what I do. I don't actually use Dave Ramsey's envelope system. I just transfer cash from my checking to my savings about once a week. I like that I can see exactly where we spent our money. DH cannot have money in his pocket or he will spend it and have no idea where it went. With the cc, I can see instantly where we spent and how much. We are supposed to be going to OK to see our ds and we will not have to pay for any hotel nights for 10 days because of the points we have accumulated. I love having this hotel thing because it is a fun perk to be able to go and not worry about lodging cost. I also use a Kohls cc when they offer an extra 30% off of purchases. I pay with the Kohls card, turn around buy a gift card with my Visa, then pay off Kohls. It is a win/win because I get the discount and I get my Visa points, then I just pay it from my checking to my Visa. It confuses my mom and sister, but I can keep it straight.

 

 

Ok explain to me more about the visa gift card to pay off the kohls? How do you do that?

[jmgconner]

Cash all the way. We use the envelope system. When we go out, we take only the envelope we will need. We plan our trips and buy exactly what we intended to buy. It's a very freeing feeling. I feel like I'm not falling prey to advertisements, merchandise placement, or any other buying techniques/psychology.

 

I own a small business, and yes, I take credit cards because people spend more! I don't like my 3% fee, BUT, it usually means that they've put more merchandise in their cart than they would have if they had paid cash. The studies are there proving that people spend more when paying with credit card. Everyone says they are the exception to the rule, but obviously, not everyone can be the exception to the rule. I have yet to meet someone who says "Yes, we use credit cards and yes, we spend a 20% more than if we were paying with cash". :tongue_smilie:

 

Academy of Jedi Arts - I do not appreciate being referred to as "not very smart" because I choose to not use credit cards. I happen to think I'm very smart for NOT using credit cards. :D

[Liz Mc in SC]

Everything -- and I mean everything goes on the Credit Card. I earn points, double at the pump and grocery store. 3 or 4 x at other stores. I pay it off very month. With the points I get Gift Cards. It has paid for my deep freezer and I've got $600 towards purchasing a Sears riding lawn mower :D Over the last couple of years the CC company has paid me well over $1,000 just to use their card. I never pay interest.

 

It was very weird the first time I stood at the grocery counter and "charged" my groceries -- but I get bonus point for that. So it's worth it. :D

 

The card I use is a no fee card.

Edited October 2, 2008 by Liz Mc in SC

[OH_Homeschooler]

Everything -- and I mean everything goes on the Credit Card. I earn points, double at the pump and grocery store. 3 or 4 x at other stores. I pay it off very month. With the points I get Gift Cards. It has paid for my deep freezer and I've got $600 towards purchasing a Sears riding lawn mower :D Over the last couple of years the CC company has paid me well over $1,000 just to use their card. I never pay interest.

 

It was very weird the first time I stood at the grocery counter and "charged" my groceries -- but I get bonus point for that. So it's worth it. :D

 

The card I use is a Citi card, no fee.

 

:iagree:

 

Also, I've read the studies that show that using plastic leads to disinhibition...that people end up buying more when they use their credit cards. But did you know that merely seeing a credit card symbol also has the same effect? Next time you go out to eat and the wait person brings you your check, chances are it will come in a small folder thing, and it will have something like the Discover Card logo on it. Guess what? Even if you pay in cash, you are more likely to tip more than if you did not see that logo at all. Just something to think about.

 

ETA LINK: http://www.highbeam.com/doc/1P2-793833.html

(I really wanted to find the original article but kids are getting hungry and I gotta get going...here's something I found that hints at these findings. I saw something else online saying the tips increased from 15% to 20% when diners were randomly presented with pay trays with credit card logos, compared with trays with no credit card logo).

 

Personally, I do think it's better for me to pay cash for things, but I use my rewards card at times too and pay it off each month. Discover ran a promotion this summer, 5% cash back bonus for gas purchases! Now in this situation, I used my credit card and I KNOW I didn't spend more using it than if I paid cash, because I fill up my tank no matter what. And I got almost one fill-up free this summer just using my card.

Edited October 2, 2008 by OH_Homeschooler

[sgilli3]

We pay with cash...as generally we dont have the choice here, unless we are in a mall.

 

Cash is a GREAT bargaining tool here !!

Better prices can be negotiated and even most of the petrol stations also only accept cash.

 

When we were still living in Oz, we used CC's and paid them off every month.

We have never paid a min payment or paid interest as the cards havent been cleared.

 

We always make sure, that we dont spend more than we (dh) earns.

[Suzanne in ABQ]

We pay for almost everything with our credit cards. We have two credit cards, one that gives up to $500 per year toward Subaru parts/service/new car, and a Discover card that gives cash back bonuses (unlimited). We use the "Subaru Card" until we've maxed out the incentive for the year, then we use the Discover card for the remainder of the year. I like the cash back bonus because we can either apply it directly toward our balance (which we pay off completely every month), or we can get a check, or we can redeem it for Gift Cards at some of our favorite retailers (Lands' End, The Gap, Borders Books, etc.) I usually use this option because you get more that you pay (redeem $40 and get $50, for instance). Some of the gift certificates are electronic and can be used instantaneously (Lands' End is one -- I go do discover.com and redeem some points, then I go to landsend.com and spend them).

 

I like that I have a running list of everything I've bought. My credit card bills are itemized according to category, so I can see what we've spent, and where we've spent it. I can tell at a glance how many times we've eaten out, or how much we've spent on gas. I take out about $200 in cash each month, and I have no idea what I've spent it on. I know I wouldn't have time to track all our spending if we used all cash. The credit cards track it for me. I truly don't believe I spend more than I would otherwise, but I've never tested it.

[Lisa]

We do both. I like the points we get on our Visa and Discover card. We always pay them off each month.

[lynn]

For me, it's easier to use cc and pay it off each month. I get distracted easily with kids and what I have left on me list and worry about getting short changed or forgetting where I spent that $10 etc. I get about $3-400 back in cash in January and that goes into my clothing budget.

[EKS]

I pay for most everything with the credit card and pay it off each month. It's an Amazon card so it's great to get those reward certificates.

 

I do think, though, that if I paid for everything with cash I would likely spend less.

[kat19]

We use cash or the debit card.

 

Those you of that do the envelope system, can you please explain it a bit to me.. Like how many envelopes and what is on each envelope?

 

Thanks :001_smile: