We live in a society dominated by credit card debt. It is a leading source of bad credit problems in America. Outstanding credit card debt in the United States amounts to more than $750 billion with 700 million credit cards in circulation. We needlessly overemphasize the value of credit cards by relying too much on them usually without thinking and as a result of our impulsive spending urges and habits. We live on a fast track and never quite take the time to realize all the benefits involved with paying in cash. But, we need to change and realize all the numerous benefits that come with paying cash for everything.
Below listed are some of the major reasons as to why you should deal away with credit cards and rely on cash.
1. You will be less inclined to overspend
Credit card is simply a temptation for overspending. It is a piece of plastic that becomes so easy to use and abuse without thinking about consequences as it gives you easy access to more capital. Spending money with plastic credit cards is depersonalized at the very moment of purchase but it catches up with you later through high interest rates added to the original cost of the product when you least expect or need it. When using cash you will not have the opportunity to overspend as is the case with credit card. Your wallet and your money is right in front of you unlike when you are dealing with a plastic card where you do not instantly feel the pain of loosing your money.
2. Cash helps you live within your means
When using cash, you'll see how much money is coming out of your pocket and what you will have left as a result. You will buy only what you need to buy when doing grocery shopping instead of what you'd like to have stored in your home or what looks good. Thus, your likelihood to overspend with cash will be reduced to the minimum extent. Paying cash for everything fits in perfectly with the savvy financial management strategies as it allows you to curtail your spending before it comes out of control.
3. Increased saving
Paying cash for everything will help you spend less money and increase your savings account as you will no longer be tempted to overspend as you did with credit cards. By using credit cards you are actually paying more for products than they originally cost due to the high interest rates that banks are charging. Why make full the pockets of managers of large financial institutions and banks while neglecting your own pocket? Thus, you will no longer have to worry about unnecessary credit card fees and credit card payments with high interest rates.
Relying on cash will save you tons of money down the road. Recent statistics are showing that if Americans were to keep their credit cards in their wallets, purses or at home that they would save hundreds and thousands of dollars a year in interest charges. Try and use cash as your main method of payment for a period of 6 months and see for yourself how much you manage to save.
4. It helps you avoid unnecessary debt
By relying on cash you will avoid the temptation of getting indebted through irresponsible use of credit cards. Credit or loans were never designed with the purpose to be used for everyday shopping, daily living expenses, or emergency expenses. They were meant to be used for qualified individuals and well to do individuals when starting up a business or buying a home as a long-term investment.
Some consumer debt can be useful such as a student loan debt as obtaining a higher education can increase a person's earning capacity. However, credit card debt, is totally useless like smoking that makes you feel good temporary but later causes problems for you. Not to mention that there are many people who have several credit cards and thus risk losing track of their spending if they are not careful. Thus, you are better off with cash anyways.
5. Better positioned to track your money
The challenge about credit cards especially if you have several of them is how to keep a record of all of your expenditure so you do not go over board. Using credit cards requires you to be really diligent about your finances. Use of the credit card at the store is quick and easy, while when paying for items with cash, you become more aware of how much money you spend. You can even pause to determine how much money they have left after the purchase.