Why I Choose Cash Over Credit

I’m a fan of CASH. Yep, the day I chose to cut up our plastic credit cards and switch over to a cash-based spending system turned out to be a pretty good day. Here is why…

It Eliminates Buyer’s Remorse Over Stuff You Don’t Need

When you are paying for things in cash, it makes you think much harder about your purchases. No more “spur of the moment” purchases that you are not entirely sure you can afford. If you are paying cash, whether it is actual physical dollar bills and coins or a debit card, you have to actually be in possession of the money you are spending. And since you already worked so hard to get that money in your bank account, why blow it? Say goodbye, buyer’s remorse.

It’s Impossible to Get Into Debt

Read that again. Getting into debt is IMPOSSIBLE when you are only paying cash for things. Sure it is possible to use a credit card wisely- only on purchases you would otherwise have made and always paying the full balance off each month- but it’s also possible for that little tiny piece of plastic in your pocket to convince you to purchase just a little bit beyond your means. And before you know it- you’re in debt.

You Can Negotiate A Deal

Did you know that you can get a deal on many goods and services by paying cash for them? You can stay out of debt and save yourself thousands of dollars just by paying cash. Read my post from yesterday about how I get a 25% discount at my chiropractor’s office because I pay cash.

It Puts You In the Driver’s Seat

Paying cash means that you are in control of your money. You get to tell it where it gets to go instead of allowing it to wander off without your knowledge. Ever get to the end of a month and wonder where the heck your money went? Paying cash will help eliminate that helpless feeling, and get you back in control of your finances.

It Gives You Freedom

What if you had a completely paid for the house? What if you drove a car for which there were no monthly payments? What if everything that you owned was 100% yours, including every single paycheck you receive? Credit cards, loans, and payment plans give off a false pretense of freedom: you can have whatever you want right this minute! But reality hits the moment the ink has dried on the contract (or you’ve hit enter on the credit card pad). You’re now responsible for yet another bill. And your hard-earned paychecks are already auctioned off to the highest bidder (usually the debt with the highest interest).

Why My Cash Beats Your Credit Card

Paper or plastic? When it comes to paying for our purchases, we choose paper: every time. In fact, we’re the crazy kind of people who don’t even have credit cards.

We choose to live this way, despite the fact that is incredibly counter-cultural, for a variety of reasons. It helps us to stay out of debt, spend less, and, oh yeah, it actually helps us save money.

That’s right- you can actually end up saving money by choosing to pay with cash over credit. I’ve heard of people who have negotiated thousands off the price of a house by paying cash. Or hundreds off the price of a car. Or cents off the price of gas at the pump.

Well, as of last Friday, Mike and I have joined the ranks of the cash-paying, money-saving crowd: we found out we get 20% off of our chiropractor visits because we pay cash. Pretty sweet! I know for a fact that it is going to be at least a few hundred dollars worths of savings over the course of this year- maybe even more.

Do you know why our chiropractor, or the local car salesman, or the bank, or the gas station want to give you and me a deal when we pay cash?

  1. It saves them money. Every time you pay with a credit card, a percentage of the money gets siphoned off to the credit card company as a sort of transaction fee. This is precisely the reason small coffee shops and bookstores will often have a purchase minimum to pay with a credit card: if your purchase is too low, they actually lose money.
  2. Who doesn’t like cash?? I mean come on, which sounds better? Straight up, cold hard cash in your pocket or a daunting litany of papers and transactions and financial finagling? Paying cash just makes life easier for everyone.
  3. It cuts down on administrative work. Places like the doctor’s office have to keep sending out bills and statements until the bill gets paid. That costs time, money, and effort. By paying cash, I save them a combination of all three, and as an incentive, they pass some of the savings back to me.

So keep that in mind next time you have to make a decision about whether to pay with cash, or use credit, whether it is a credit card, payment plan, or a loan. If you choose to pay cash, maybe you can get yourself a deal. Many places already offer an incentive if you pay cash, but even if they don’t, maybe you can convince them it’s worth it for them and for you!

How About You?

What reasons do you have for paying cash, or for using a line of credit? Which usually wins: cash or credit card? Anything to add to my list, or have you ever scored a deal on some product or service by paying cash? Leave a comment! I would love to hear about it.

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