An Argument For Switching To Cash-Only

If you haven’t already made changes in the way you are managing your money, the recession has offered an excellent opportunity to re-evaluate whether or not you are on the right financial path.  Managing your personal finances can be as simple or as complicated as you choose.  If you want to be financially secure and grow your savings you will have to put forth a bit of effort to make sure you are managing your money as efficiently as possible.

One of the big changes in recent months is the way consumers are managing their credit card use (partly spurred on by new credit card laws enacted by Congress).  In a shocking turn of events, many people now realize that the credit card industry is not in business to provide us with convenience but rather to make a healthy profit.  In fact, using your credit card in the future may prove to be more of an inconvenience than anything despite the changes that are supposed to provide protection to account holders.  Many people have decided to make the switch to cash and avoid dealing with credit card issuers all together.  Here are a few reasons why you might want to switch to a cash only or mostly cash lifestyle.

You Really Will Save Money

It has been said time and time again because it is true.  In almost all cases, people who adopt a cash only lifestyle save money because they only spend what they can afford with the cash they have on hand.  Gone is the temptation to put that 52 inch plasma TV on the Discover Card. If you spend only what you have on hand, you will have to pay more attention to your spending habits.  We all know it is far easier to talk yourself into a purchase using a credit card than with cold hard cash.  When you reduce your spending and avoid debt, you save money in the long run which can be used to improve your financial situation.

No More Keeping Up With Rules In The Credit Card Industry

Everyone seems to have an opinion on whether or not the new rules and regulations placed on the credit card industry will be helpful to consumers.  For consumers who have been bitten by the credit card companies, the good news is that they will be more closely regulated.  On the other hand, if you have managed your credit well in the past, you are likely to lose a few of the perks you once had (like 0% balance transfer offers, for one).  If you are using mostly cash, then it really doesn’t matter what the credit card companies choose to do.

Credit Card Perks Not So Perky Anymore

People who use credit cards responsibly often say they use their cards to gain rewards.  Unfortunately the rewards programs might not continue to be as rewarding as they have in the past.  In the past, 3% cash-back rewards credit cards were not difficult to find.  Now, I’m only aware of one or two cards that fit the bill (mostly with Discover, I think).  Paying for purchases with cash has its own rewards which should be considered before tempting fate with the credit card industry.

This is not to say everyone needs to cut up every credit card they own.  Credit cards are handy for many things and will continue to provide some benefits that you cannot get from using cash.  With that being said, curbing your credit card use and making an effort to use cash whenever possible will likely help your finances in many ways.