Your dad has the answer. He is right and eventually as you age you will come to see this truth.

The only problem I’ve come across is since I have used credit for years, my credit report only shows a couple of negative items from 5 years ago with no recent activity. so now I’m trying to get a credit card, just to build up a positive history. The plan is to use the card once a month to buy something small–$25.00 or so and pay it off every month. For the most part, I’m going to continue to use cash.

My wife and I are buying her dads house and the first thing the bank looked at is that I have had a credit card since freshman year of college and I always paid it on-time and never spent more than I earned. In fact, I really only used it for emergency purposes.

PLEASE DON’T RECOMMEND USING CASH EXCEPT FOR A CERTAIN NOMINAL FIGURE – SAY OVER $200. Why? Because every purchase, aside from points and rewards, you are earning credit. If you look at how credit is reviewed by the big three, they like to see a balance that is indicative of current income-monthly expenses. Don’t ask me why it helps with your credit score, but I pay it off every month since 15 years ago and yet I have a neighbor who runs a consistent $500 balance and his credit score in this area is 75 points higher… Crazy!

My point is learn how you build credit, use cash for only big purchases that are one time events. Good rule of thumb my wife uses, if she likes a pare of shoes I make her go to the bank, withdraw the cash and right before she get’s there I ensure she only has enough for one purchase. One way we control our spending! She does the same thing to me. Lastly, she is required to tell the bank teller what the purchase is for, you should hear some of the responses. Why don’t you put that on a credit card? Is this all the money you need for shoes? Are you buying anything else?

The rich, like my father, always paid cash, very seldom did he use a credit card. Maybe there is some truth to having to pay with cash. But only, I believe, after you have built up your credit.

Look at the richest people on Forbes.. they all used the most common saying on how they got rich: Using OPM… Other People’s money. CREDIT!!!!

Thanks for letting me participate in this discussion.

Use whichever abstraction can feel real in your mind. In my mind, all of these payment devices just boil down to numbers (i.e. currency amounts). So if you can make the numbers feel real to you, then the payment device won’t matter and you can use whichever one is most advantageous (e.g. cash back credit cards). However, if certain payment devices feel more real to you than others, then use those payment devices.

i agree, credit cards are easy and disassociate from the money. so does having a bank account. cash in my wallet usually means that i will spend it all. debit card normally makes me think twice about spending.

i understand this is a devil’s advocate post, but the cash scenario is tenuous especially if you travel. now you can mitigate risk by getting traveler’s checks, but not every place accepts them. moreover, there are plenty of places and companies overseas that do not accept reservations etc without a card.

again, it all goes back to self-control and responsibility. personally, i think people feel more like hotshots if they spend cash and are more frivolous when they have cash..especially large bills.

It really helps when teaching my kids about money too. They get to see it and quite often I will have my kids pay for merchandise to teach them there is only so much and the cash in hand is all we have. Real cash has been a valuable way of teaching my young kids about managing finances.

What I find happening in my home is the value of cash is taking hold. By that I mean dealing with real cash brings the actual value of the money to our thoughts whereas credit and debit cards seem to have a way of removing the value of the money from the equation.

The best part of using cash only has lead to us saving more and our bank fees are down big time from taking out cash once per week. Most banks charge a service fee for every debit transaction. My bank allow 10 free withdrawls per month. At one point my debit transaction were pages long and each transaction was costing $1.00. I have save $100 per month using cash!

Excellent point. Even though I use my credit cards and debit cards frequently, I don’t closely associate them with cash. On the other hand, when I spend my cash it is very real. I’m a visual person, so maybe the act of seeing my money actually leaving my hands or wallet when I spend makes it more real than when I use a credit card.

Not only can cash be an excellent budget control tool, but using it could help a person improve their credit score as well. How? Using cash would allow a card holder to reduce their credit card usage, and by combining this with paying down balances to 25% of total avaliable credit or less, they would be able to boost their credit score.

“Cash Is Faster“. Not only can cash save you time, but in certain retail transactions, it can save you money in the form of a discount – of course this depends on your ability to negotiate with merchants.

Bottom line, if you are a spender by nature, you need only use cash.
To carry a cc it takes discipline.