Tuesday, July 19, 2011

10 Reasons To Not Use Credit Cards

American ExpressImage via WikipediaThere are many reasons to use credit cards and just as many reasons to not use them. Credit cards are just disastrous in some peoples lives. It's true a lot of people use credit cards their whole life and never get into trouble. But when you don't understand the dangers and troubles that can occur from misuse it's better to stick with cash.

I have listed several ways the use of cash is better than using credit cards:

1. You will never be in debt. It's pretty hard to get into credit card debt when you don't have any credit cards. It's hard enough getting out of debt, staying out of debt is much harder with those plastic cards pulling at you.

2. Impulse purchases will disappear. Credit cards make it so easy to make impulse purchases, only limited by your credit line. Within no time you can be in debt and over your head. When you spend cash it hurts. Cash is always in limited supply. When it's gone you know it. There is a physical connection between you and your money. Credit cards are a cheat on the process and a disconnect.

3. Credit card purchases are traceable. If you value your privacy use cash. If you want some computer somewhere to know everything you purchase, use credit cards. It's none of anybody's business what you do, where you go, or what you spend your money on. Credit cards makes it easy to know everything.

4. Budgets are easier to keep. When writing out your budget every month knowing your income less your expenses is simpler. Even if you are not the best at budgets you can never go back to debt if you overspend and are short on some bill. You will know where every dollar went, you will be more organized.

5. You will spend less. When you use credit cards, statistics show you spend on average 19% more than what you would with cash. Credit cards disconnect your brain from making good purchasing decisions. Spending money is sexy with credit cards, it's visceral with cash.

6. Card bonus points are not worth it. You think you are winning when you earn rewards from your credit card purchases. But these reward programs are just a way for the credit card companies to keep you on the hook so someday you will get caught again and go into debt. If you don't play their game you will always win. If you do play, there is a very big chance they will get you.

7. Spending cash links work with spending. Credit cards always break that link with how much you need to work to pay for that purchase. Spending hard cash makes it very real that the computer you just bought for $1,000 means you just had to trade a month of you labor for that item. When spending money is viewed as trading your days time and work for a hunk of metal or plastic you look at purchase in a new way.

8. Debit cards work instead of credit cards. There will be a time where you will need plastic to make a purchase and that's your excuse for keeping a credit card. Using a debit card from your checking account works exactly the same way. I have reserved automobile rentals and hotel rooms without any hassle using my debit card. I then pay my bill in cash or with a check.

9. No wasteful fees to pay. I never have to worry about late fees, lost payments, finance charges, messed up accounting, or interest rates. Also I never get a bill from a credit card company.

10. It's a freeing experience to not be beholding to the bankers. With all we have gone through with the financial institutions these past few years there is a bad taste in my mouth with these companies. Not using their product is just my way to voice my disgust for their actions.

I like to use cash, I prefer it to credit cards. It's a shame how the use of credit cards and their abuse is now the norm in our society and using cash is the rarity.


4 comments:

  1. I agree with what Dave has said. It is very easy to get into debt by using Credit cards. Although I personally do not have a credit card, I have seen many people get over their heads in debt by using one because they just swip the card and go on, they do not actually see the money dissappear.

    ReplyDelete
  2. Question:

    I use the credit card on my debit because its is securer(no pin) than using debit and depending upon the purchase the warranty is extended(generally). Also if someone has access to my debt pin / card they can clean me out vs my credit card

    Wrong or right?

    ReplyDelete
  3. It is better to use your signature when purchasing as opposed to the pin in a transaction. In that case you have the full protection of the credit card provider if something goes wrong. To answer your question, if someone got your pin number and your card and proceeded to use it to make purchases or withdraw from your banks ATM, your money would be cleaned out but your bank is required to put it all back in one business day after you notify the bank of the theft.

    ReplyDelete
  4. You have a good idea in not using the credit card..yes It is very easy to get into debt by using Credit cards. But I personally do not have a credit card, I have seen many people get over their heads in debt by using credit card, because they just swipe the card and go on, they do not actually see the money disappears.

    ReplyDelete

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