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« It's Biblical to Do Your Work with Excellence | Main | Would You Pay $45,000 to Live Seven More Years? »

October 15, 2007


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I've gone cash only for groceries. I noticed that with a CC or even a debit card, it was a lot easier to just put whatever in the basket without really thinking about how much everything totaled up to. With cash, we have to think about it. I do carry my CC and debit card as a backup in case that ice cream really calls me though :)

I've been cash only - or debit card and cash - for more than 2 years. After a while, it just becomes second nature. I don't miss my credit cards - and I definitely spend less when I carry just cash.

i am sort of in the same boat. i haven't gone to cash, but to debit card only. it is a more practical compromise. one that dave ramsey practices as well (for whatever that is worth).

after finding this blog, i was sold on the AE Blue credit card and was going through the motions. i watched the documentary, Maxed Out, and it got me thinking. i am not a big protest/boycott guy and i know how pointed "documentaries" like that can be. however, i don't want to support companies that i have so many quams with. subsequently, i developed a little pro/con list. something similar to this...

pros: small percentage of cash back
cons: adding complexity to my life by having an additional bill to pay (and remember to pay), another card to carry around in my wallet, the card wasn't always excepted at the stores i shopped at, i am probably spending more by using the card (due to the fact that i regularly check my checking account in wesabe to monitor my budget, but can't do that as effectively with a CC), and the moral implications of using the card.

overall, i may be missing out on a little Blue change in my pocket, but it just isn't worth it for me. in my budget, we aren't talking about THAT much money in rewards. i plan to monitor my debit card system. if necessary, i might make a minor adjustment to include using cash for only the budget categories i have the hardest time keeping in check (ex. eating out).

As I understand it, in the "good ole days" people who needed gas but only had $5 in their wallet because they forgot to get cash would get $5 worth of gas until they could make it to the bank and get more cash. :)

Of course, back then you still had to go inside to use your card (if they took them!) and you could get half a tank for $5 >_>

Of course, I'm only 23 and when I started driving I once bought gas for $1.19 or so and I definitely remember in the last gas dip in I think the late 90s when a couple places got down to $0.89

I personally still use my CC's, and take advantage of the cash back, etc. I couldn't imagine paying for the wedding I'm going through now without my credit cards. I pay everything off every month without a problem, but forking out $600 in cash for bridesmaids dressed, $50 for shoes here, etc, just doesn't work out. And as long as I live within my budget and pay them it off each month, who cares? I make money because the cash to pay off the card sits in interest-earning checking account until the bill comes! :)

The studies say that credit and debit cards are about the same when it comes to spending more.

However, how were the studies done? Were the plastic purchasers going to spend more anyway even if they were using cash? Do people use plastic more often when they know they are going to make a big purchase? etc.

I know we spend the same as we would if we were using a check or cash.

People would spend more with credit card than cash for a couple of reasons: either they'd run out of cash and couldn't spend more, or they lack discipline. In the first case, it may not be better that you spend less, because maybe you needed something else you couldn't get. I don't see how a debit card would change the situation except for the fact that it beats a credit card since you can only spend what you have. If you have discipline, then it doesn't matter.

No offense but I have found the blog posts about finding the best rewards card humorous. This is because I did the same thing. It doesn't work in the end.

We never carried a balance on our credit card. The very first month we started only using debit card/cash we noticed a big difference. I now use a debit card that gives .5% cash back and I spend less. There is peace knowing that you don't owe anybody a cent and not messing with paying another bill.

I spend less with a credit/debit card than I do with cash.

Credit transactions get entered individually in Quicken and tracked. I'll find out pretty quickly if, say, I'm spending too much eating out.

Cash, on the other hand, is a black hole.

We just started the transition to cash vs. Credit Card. So far so good and I have noticed our spending has gone down. We still do use the credit card in situations where we run out of cash in our wallet (similar to your $5 gas example). We hope to make the full transition to cash in January as it does take a little extra planning so you have cash on hand when needed for stuff like groceries, gas, etc.

The biggest downside for us so far is that the credit card makes returns without a receipt much easier. For example, we shop at Target frequently. At Target, you can return anything without a receipt if you pay by credit card. They just look up the transaction on their computer. It's actually pretty convenient.


Ever hear of willpower? Stepping away from an impulse buy overnight to then decide if you really need/want it? Avoiding convenience purchases? Or even just taking a moment to comparison shop and find the best deal once you've decided to make that purchase?

If you can't exercise these basic principles of personal financial management, your situation won't improve regardless of whether you decide to pay with cash, checks, credit or debit. I know quite a few people who delude themselves into thinking they're effectively managing money by switching over to cash, while simultaneously exercising the same impulsive buying habits. If you absolutely must have a $4 latte every morning on an annual income of $20,000, you will go broke doing so regardless of whether you pay cash or credit.

The only difference I see is that these are the folks constantly looking for the nearest ATM. (And often running up foreign ATM surcharges or burning up the equivalent in gas to get to their own bank's machine.)

I work in a restaurant as a server, and the result is I deal with a lot of cash. The last 6 years I have paid for nearly everything in cash (online payment for most bills, a few odd checks). It has helped me enormously in reducing my debt. I do still use credit cards for any major purchases, or any purchases I must track for something specific (like my rental properties). We do pay those charges off at the end of each month though. Slowly, but steadily this has allowed me to chip away at some consumer debt and student loans that I might otherwise just be paying the minimum on.

Big Chris

I don't believe I am spending more with a credit card. I grew up in cash-only country, also didn't have a credit card during first years in the US, so I had experience of cash-only living. I'd imagine I would spend about the same except for while traveling. When traveling, especially abroad I am much more careful with credit cards than cash - cash just melts. This is because when I think about buying something with the credit card I am thinking about the bill I'll get after I come home - which nowadays is automatically deducted from my checking. When I take the cash out of the ATM, I look at it as already spent.

As I posted in another thread - statistics can be misleading. We know for a fact that some people are living above their means and carry balances. These people are likely to be spending a lot more than 12-18%. It is safe to assume that at least 1 in 10 of them spends significantly more. If you take 1 person in 5 spending 100% more and 9 people spending about the same, you'll get 10% average. Even if 1 in 5 people spend less than 100% more, the fact that over 50% carry balances is enough to account for 12-18%. Think about it.

Show me a study that only looks at those of us that pay in full. BTW - currently I have over 2K left after expenses every month (unless there are rare major expenses), and that is including full credit card bill. So if I really would go cash only, that would be a pretty big limit.

The trick is to always think before buying. With groceries - I usually have a written list of what I need and follow it. With other purchases - I stop and think if I really need it, want it badly enough, etc. before pulling out the credit card. To me money is money regardless of the mode of payment.

Oh, and I am ever so tired of hearing about Dave Ramsey as if he is kind of a prophet. I don't have debt, I've never had consumer debt, so why should I care about what he says? I've been doing fine without him for over 20 years.

I agree with Kitty. It may just be me, growing up poor, living on cash before CC existed, still keeping $100 in my wallet at all times, my first instinct to purchases being to say no, never buying on impulse, never buying anything I can't already pay for, paying the CCs off in full each month, but I don't treat CCs as any different than cash. For me, they just aren't any different. I could see how someone who maintained a balance might consider them such and most people do maintain balances, but I am not one of them.

I've found I am the exact opposite. If I have any cash, I will find a way to spend it- usually on those "little things." But if I don't have cash I won't spend anything because I just don't think about going out and buying stuff at random. And of course we pay off our credit cards every month.

I'm with Rob, I tend to spend the cash I have on minor things like coffee or little snacks or whatever. I don't tend to like to use my credit card for $1 purchases, so if I don't have the cash, I just don't buy "it". But I think I'm still a pretty frugal guy. I think overall it just depends on the person, but credit cards sure do make it easier to spend the money. I would never go back to carrying around cash though, way too much trouble. Plus I like depositing the reward checks every couple months.

i tend to spend more when i have cash in my wallet.
i think for credit cards, you have to stop thinking of it in terms of "cash back." That is the nice researched, marketed buzz words that the credit card companies use because they expect it to trigger people to spend more on the cards. They know it triggers people to spend more.

MelMoitzen - The problem with a lot of people who are in debt due to CC use is that they DON'T have willpower. I have seen a number of people who have benefited from the cash only plan. Simply because they CAN'T get more cash if they have spent it all. :-)

How is "flipping the card on the counter" not count as emotional? That must be the other half of the world, because that ain't me.

For me, tracking every credit card transaction in Microsoft Money also helps me to refrain from spending unnecessarily.

I'm starting to shift more towards cash. I find using physical cash that each transaction means a little more. Here is a thought though. Maybe people would spend less using only cash because it is less convenient. Sans cash back, credit cards are merely a convenience, one that allows more frequent spending. If you suddenly went to cash, maybe you would spend what was in your wallet, but then you'd have to stop until you could get back to the atm. Cash is less convenient, so maybe people would spend less. Just thinking out loud here.

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