I’ve always been a fan of using credit cards. Not in an irresponsible way, but in a way that allows you to earn points for purchases you would be making anyway. I have one really great travel rewards card that I earn travel credit with, and that’s pretty much the card I use to pay for everything and then I pay it off at the end of the month. This method’s always worked for me, but I recently read a whole bunch of studies that claim people who use cash instead of credit cards spend less.
Has anyone ever experience this for themselves? Has anyone ever gone from using credit cards to debit cards or cash? If so, did you notice any difference in your spending?
I’m tempted to experiment with this method just to see if psychologically I’m inclined to spend less money, but I do hate knowing that I’m missing out on my points when I’m making my purchases.
Hi Kayla! What a great question – I’m super interested to hear what others have to say on this topic. For me, it’s pretty clear that carrying cash makes it easier for me to spend. So I try to avoid carrying cash because for me, mentally, as soon as I withdraw cash from the ATM, the money is already “spent.” I can’t easily track where the money goes – so it gets frittered away on little things. In contrast, when I use my credit card, there’s a paper trail that – for me – imposes accountability. I have to answer to myself for everything I spent whenever I pay off my credit card at the end of the month. That erects a bit of a barrier against frittering and splurging. 🙂
By the way, I have a travel rewards credit card too, and I also use it to pay for everything. It’s worked for me for years – the rewards are nice. I got a Mac laptop and an iPad about a year ago. (This *may* be influencing my preference for credit vs cash…)