Studies have shown paying with credit instead of cash results in spending more, even without interest charges.
By Daniel at 10 February, 2010, 1:19 am
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Buy now pay later simply works different inside your head, and delays the pain you normally feel when spending cash. That credit bulge represents between 18 and 40 percent more spent on each purchase, depending on the venue and merchandise. So imagine what paying cash could do for your budget. Spending 18% less all the time, could easily free up the dollars you need for college savings, and debt reduction.
Trash the plastic, pay cash!
My 1st advice would be to cut up your credit cards. Use cash for spending items (groceries, dry cleaning, clothing, etc). Pay your bills with checks or electronic transfers. Debit cards for purchases over the internet and phone.
You will spend much less money overall.
McDonalds found the customers spent on average 35% more when using plastic than cash.
Finally, credit cards are designed to separate you from you money. So to all those people that believe they are beating the credit card companies by charging everything they can to earn points or cash back and pay it off every month, you are only fooling yourselves. You are spending way more than you will every receive back than if you lived on cash.
My wife and I cut up our cards, closed all the accounts 5 years ago and have never looked back. We travel, stay in hotels, rent cars, buy airline tickets all without a credit cards. They are simply not needed. Ever.
- spendless
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