Jan 10 2008

Cash, debit or credit?

I don’t like cash.

I don’t like to think about how filthy it is–where it’s been and who has handled it.

I don’t like to have it in my purse. I’ve never misplaced money, but to me, it just feels more “losable.”

When I have cash, I spend it and I don’t remember where it goes.

So, I carry just a tiny bit of cash. I have a $20 in my glove box in case I’m out and absolutely need cash, and I regularly get rolls of quarters so I can do my laundry. That’s about it.

Instead of toting twenties, I prefer plastic.

I use my Visa debit card everywhere–Aldi, other groceries, drugstores, whatever. There’s a small rewards program linked to our debit cards, and we’ve earned enough to get a $50 gift card to Outback steakhouse. It should be here soon!

What’s more, I like how my debit card can help me track my spending. I don’t have to write down that I spent $10.26 at a store. My bank already has it logged, and I can link my online bank account to a financial program (such as Microsoft Money or Yodlee) to help me categorize my spending.

I use my credit card for online purchases. I know that I can use my debit card there, but I prefer credit. I can generate a one-time use account number, and it makes me feel much safer.

However, I know that for some people, using a cash-only system works best. You can withdraw a certain amount of money for your weekly expenses, and when it’s gone, it’s gone until your next paycheck. A cash system can work well in those cases.

And, not all stores will accept plastic. I’ve had to leave a few stores empty-handed because of their policy.

What do you use? All one thing? Or maybe a hybrid system?  


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12 Responses to “Cash, debit or credit?”

  1. Hmmm, I prefer plastic as well (pay off balance every month, only buy things you need). I never thought about how dirty money is.

    Thanks alot. Now I have another cleanliness phobia.

  2. I use strictly plastic for the ease of use, and the cashback bonus money. I pay it off monthly and I try to only buy what I need, but sometimes I find it easy to buy items that I want. Which makes me wonder if I should only use the credit on items such as gas, groceries, and bills. And if I don’t have cash for the item (clothes, dining), I don’t buy it. Although it would make life more difficult I think that I would spend less.

    People always say you can control spending by using cash because you are less likely to spend. I am starting to beleive this.

  3. I do almost exactly the same thing. I never use cash because I always end up spending it, and then I can’t keep track of where its going.

    I use a debit card for every purchase. Luckily these days almost everyone accepts a card. The advantage is that when I check my account online I have a list of all the purchases I made that month – that helps me create and maintain my budget.

    For bigger purchases I save before hand (most of the time), and pay with a credit card. After I buy I go and immediately pay it off with my debit card.

  4. I’m a heavy debit card user, and have been since I first got one in high school. I almost never had cash in my wallet until recently, when I tried having it around for those cash-only places and instances when the amount was so small I felt silly putting it on my card. I don’t have a credit card, but I’m considering getting a specific one for the frequent flyer miles I can get.

  5. I used to use debit/credit only. But this year DH and I have started taking out a small amount of cash every pay for our extra stuff like eating out, Starbucks etc… For us, it is easier to do cash for this stuff b/c when it is gone it is gone, and I don’t have to stop and think what I have spent so far for the week. We are still new to this though, so not sure if it will last or not! :)

  6. Most banknotes have traces of cocaine: fact.

    Creit cards are all very well if you pay them off before penalties & interest. Never quite got the hang of that one…

  7. Excellent point about being able to pay the balance. Sometimes, it is easier to spend more with plastic.

  8. I’ve tried having like $5-10 in “blow money” to use without worrying about where it goes, but then I have a hard time spending it at all.

  9. I use debit. Being able to see the numbers on my computer screen makes using debit very real.

  10. Interesting question. I have always used my debit card. I see a lot of value in having cash, but recently I set up an Excel spreadsheet to keep track of our budget. I’ve been writing down the totals every time I go to the store and it automatically updates and tells me how much of my budget I have left for the month. These hard numbers have been good about controlling my spending. I can see if I keep up with this then it will be just as effective as cash.

    I don’t like using my debit card for purchases under $10, so it helps curb my impulse buying on small things. If I have cash, I treat it more like “blow money” (that term really makes me think of drugs!) and spend it wherever even if it’s technically for groceries. I don’t know, we’ll see.

    I think each person should try both and use what works better for them. With cash, I am not likely to overspend. With my debit card, I have a record of each purchase and I can’t just “ignore” it like I can with cash. We’ll see in the next few months what works better for us.

  11. I never have cash on me. I use my CC for the cash back and we pay off our bill monthly.

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (5), Vivienne (3) and Amelia (born September 2013) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

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