Conscious Spending - Credit Card vs. Cash

[BMEPhDinCO]

Interesting discussion and povs!

I know that when I was in college, we got $500 or something every semester loaded onto our student ID cards to spend on campus....we called this "play money" or "not real money" even though it was money because we could only spend it in certain places.

I think that some people consider CC to be "not real money" since they don't SEE it and they don't spend it all at once (ie, people who make a minimum payment).

I'm personally of two minds - I love my CC and I use them a lot, except for joint fun money for the month. We use cash for that, since when we used a CC, it was too easy to be tempted to "borrow" from the next month for that one more fun thing that's less than $10.... now, when the cash is gone, poof, no more spending!

However, I like the tracking of the CC - I can go online and see what we spent where and when and so forth - with the cash, we get confused and forget where we spent it. Sometimes, I also wonder if I actually gave someone a $10 when I meant to give them a $1 since the money goes so fast.

It's also a matter of budgeting well - I never spend on a CC what I don't already have in an account somewhere - and if that's something one can do, then one should get a CC, otherwise one should look into cash envelopes or similar.

Thus, I like using CC more for most reasons, but cash has it's place as well and for people who really can't stop, cash is the better option.

Debit cards are electronic cash to me, btw, so I treat them as such.

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Originally Posted by SFA

My point is that I don't understand people (who are financially conscious) arguing that cash is better than credit. If you are financially conscious it doesn't matter what form of payment you use, you know how much you have to spend.

The financially conscious part is crucial. I remember a friend, some years back, who wasn't very good with money. When she and her husband tried to take control of their finances, they started to tell their children that they couldn't buy certain items because they didn't have the money, to which the kids replied, "Just use your card, then."

I rarely use cash (farmer's market is probably my biggest purchase), but I would argue that children and teenagers should use cash so that they have a more concrete idea of what they have in their hands. When it's gone, it's gone.

But for adults, if every purchase (necessities or whimsicals) is a conscious decision, then the method of payment doesn't matter. It's when people mindlessly pick up something and slap down a card that it becomes a problem. And like nearly everything else in life, it's all a matter of how we think and process information. We tend to think that others view money just like we do, but that clearly isn't the case.