UNITED STATES—Haven’t we all heard that phrase time and time again: cash or credit? It’s that option that tends to be expected anytime we pay for something in most retail stores or any place where we obtain a service. I had that experience this past weekend, while shopping for some items for an impending vacation.
It was almost funny because I was stunned to realize that the cashier automatically assumed I would be paying for my items with a credit card. Seems to be a trend where the assumption is credit is best, and very few people actually walk around with cash in their pockets. I will admit I rarely carry as much cash as I used to, as a result of being robbed. It wasn’t like I had loads of cash in my wallet, only $50, but people can’t take what you don’t have, and its better to not bring attention to yourself with wads of cash.
I will admit for a slight moment I was tempted to use my credit card, but I said nope, cash. Why did I hesitate? Well you have to keep track of your credit card purchases. This is something that isn’t always easy to do. You might tell yourself I’ll only spend a $100 on my credit card today, but before you know it, you’ve already spent $500 without even realizing it.
Why is that? Plastic can be addictive; we forget that its money that we have to payback, and for some of us we’re not thinking about the bill when we make that purchase. But guess what, we should be. Interest is a killer on those credit cards. Before you know it things add up so quickly it’s hard to knock that debt down, even when you try.
It’s like an addiction to some degree, the hand wants to resist, but your mind is telling you other things. That’s why I think it’s always an important tactic to limit how many credit cards you carry in your wallet or purse. This way you’ll carefully think about what you’re charging every time you swipe and sign your name. Cash on the other hand teaches discipline. If you only have so much cash on hand, you have to pick and choose what you can spend it on. So rather you’ll use that money on the gas tank, groceries, cleaning supplies or some of other expense is a choice.
Remember if the cash is needed to pay a bill, its always wiser to tackle that first before doing something else. I look at credit cards as an emergency expense; this is something that I have to have, and at this very moment I just don’t have the cash on me, but I can pay it back later.
If you’re using credit when you can use cash, you’re opening the doors to amount debt. Let me just say debt is no easy thing to pay down. It seems like once it reaches a distinct point, it takes forever to knock it down. Well, I think that holds true when you are only paying the minimum amount due on your credit card. The goal should be to always double the minimum amount that is due so that you can eliminate interest.
I ask myself the question all the time if I had to choose between paying with cash or credit card, I’d always select cash. Why? That means I don’t have to owe anyone. In my book, its better to be broke and have all your bills paid than to have money and owe tons of people.