4 reasons I use cash instead of a credit card (& a giveaway!)

People are often quite surprised to find out I’ve never had a credit card. In fact, sometimes, they have to ask three times just to be sure they heard me correctly:

“So you’ve never had a credit card?” they ask incredulously.

“Nope,” I respond.

“Like ever?”

“Right, never,” I reiterate.

“Not even when you were younger—ten years ago or something?” They continue to quiz.

“No, really and truly, I’ve never had a credit card,” I reply, again.

Usually people just end up looking at me aghast like I’m from some other planet or something. That’s okay, I’ve gotten used to the fact that I’m weird.

But you know what I’ve also never had? Credit card debt.

Yes, it’s true. There’s a brilliant and guaranteed way to avoid credit card debt: just don’t get a credit card in the first place. It works—every single time!

I’ve never had to worry about how I’m going to pay off the credit card bill that’s coming due. I’ve never had to hassle with being harassed by credit card companies because my payment was late. And I’ve never had to dread opening up a credit card bill to see how large it was.

We have a policy at our house: if we can’t pay cash for it, we don’t buy it. It’s a plain and simple policy, but it’s saved us a boatload of debt, fights over money, and stress about our finances.

Sure, it has meant we’ve gone without a lot of different things we wanted over the years because we didn’t have money to pay for it. But truthfully, I’ll take the peace and freedom that comes from living without credit card debt over all the bling and stuff. It’s worth more than money can buy, anyway.

Do I think credit cards are evil? Well, I wouldn’t go so far to say they are wrong or immoral, but I would say that I’d strongly encourage anyone who is currently swiping plastic on a regular basis to step back and consider a few things:

1. Using cash keeps you from over-spending.

Yes, cash can burn a hole in your pocket and you can blow it. But here’s the thing: if you only use cash, when the money’s gone, it’s gone.

You either learn to pace yourself and your spending so that you have enough money to buy groceries at the end of the month, or you go without buying groceries. I promise that if you don’t have any grocery money to spend the last week of the month, you’ll probably think a lot more carefully the next month when you’re tempted to spend all your grocery cash during the first few weeks of the month.

2. Using cash forces you to evaluate your purchases.

When you use cash, you can’t mindlessly swipe a card—you have to pull green bills out and hand them over. It doesn’t take a month for the purchase to show up on your credit card bill; the pain of purchase is immediate.

This direct correlation can give you a much better grasp on your finances and on where your money is going. And it will probably also cause you to step back and carefully evaluate each purchase.

Photo by seanfx

3. Using cash prevents you from betting on the future.

So many people say, “I treat my credit card like cash and always pay off my credit card bill in full at the end of each month.” That sounds great—in theory. But very few people are truly treating their credit card like cash.

Unless, before you make a purchase, you set aside the full amount of money to cover the purchase in a separate account and never touch that money until you pay your credit card bill, you are not truly treating your credit cards like cash. If you don’t have the money set aside for the full credit card bill, what happens if you lose your job tomorrow or you have a major financial crisis that puts you in a big bind?

By using the bank’s money or store credit to pay for your purchases, you are presuming that you are going to have enough money to pay the bill when it comes. And if you don’t, you could end up getting hit with high interest payments on top of the money you owe.

4. Using cash guarantees you never have to pay anyone back.

When you pay with cash, you can’t buy something unless you have enough money to pay for it. This often means you have to work hard, scrimp, and save up to make a purchase. This process of scrimping and saving can be grueling, but the satisfaction of exercising self-discipline and waiting to buy something with your own hard-earned money is every bit worth it in the long run.

And you know the best part about paying with cash? You never have to worry about paying anyone back. When you buy something, it’s yours—free and clear!

Want to learn more about living a plastic-free life? Check out chapter 4 of my book, The Money Saving Mom®’s Budget, where I tackle the common arguments as to why credit cards trump cash, and challenge you to at least try the three-month cash-only challenge. If it doesn’t work for you, you can always go back to the cards. But it just might completely revolutionize your life and finances in radical ways.

Giveaway time

This giveaway is now closed.
Crystal is giving away ten copies of her book to Simple Mom readers! Here’s how to win a copy:

1. Leave a comment on this post, telling me what you’d do with a $100 bill that mysteriously appears in your pocket. (If you’re reading this via email, you must click over to the post to comment.)

2. For an additional entry, tweet about this giveaway, mentioning both @simplemom and @moneysavingmom, and including a link to this post. Your tweet could look something like this:

Head over to @simplemom to win a copy of @moneysavingmom’s new book! #giveaway http://lvsm.pl/wP3gsj

Then come back here and leave an additional comment telling me you tweeted.

3. For another additional entry, “like” both Simple Mom and Money Saving Mom on Facebook, then come back here and leave a comment telling me you did so. (You don’t have to mention the giveaway on Facbeook, but you’re certainly welcome to!)

This giveaway will end Saturday night (tomorrow), and I’ll announce the winner soon after. I hope you win!

top photo source

Crystal Paine is a wife, homeschool mom to three, self-proclaimed minimalist, lover of dark chocolate and good coffee, and a wannabe runner. For practical help and inspiration to get your life and finances in order, check out her blog, Money Saving Mom, or purchase a copy of her brand-new book, The Money Saving Mom®‘s Budget.

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  1. It’s not glamorous, but since our grocery budget is tight, I’d probably use it to stock up the freezer and pantry. (And maybe buy myself a good cup of coffee!).

  2. I would buy a Dutch oven to use for Artisan Bread Baking! It’s a splurge and a practical choice as well- better food and no more $3 loaves to buy.

  3. An unexpected $100.00…… additional payment on student loans that are taking forever to payoff!!!!

  4. Wow. $100. Probably would go toward cloth diapers for the rapidly-approaching #4!

  5. I’d put it in our baby emergency fund.

  6. The $100 would go into our vacation envelope!!!!

  7. Hmmm, $100? I would buy a down comforter for my bed – right now I freeze at night!

  8. stacy reed says:

    I tweeted!

  9. I would put it in savings.

  10. stacy reed says:

    With $100 in my pocket, I would by groceries for my family of 5. We cut out the junk food and I try to make as much as I can home made, not boxed. So, extra grocery money is always helpful for the weekly runs to the store for milk & produce.

  11. stacy reed says:

    2 FB Likes 🙂

  12. We already do a version of the cash envelope system Dave Ramsey style, which is a far cry from using debit & credit for everything. It’s been almost a year and already has positively impacted our finances in many ways.

    If I had an extra $100, I’d put it in my “new furniture” envelope because we are moving into a new house next month and have a few extra rooms to furnish.

  13. I would probably get some more cloth diapers to have to wash them less often.

  14. I would want to do something fun with it, but I would probably just put it into savings.

  15. $100 would go directly to our debt snowball so we can live credit card free too! 🙂

  16. I like you both on Facebook!

  17. Michelle White says:

    I would squeal and use it for gas and groceries. If times were not so tight I would got to a salon and get my hair colored. The gray is out of control!
    Michelle W.

  18. Michelle White says:

    I follow both on Twitter and I tweeted.
    Michelle W.


  19. Michelle White says:

    I am a fan of both on FB as well.
    Michelle W.

  20. Lindsay Sledge says:

    I would put it towards our $300 CSA bill that’s due in a couple of months.

  21. Helen Williams says:

    We switched to cash about 6 months ago. We have debt but are not adding to it now that weve got smart to a cash only life.

    As to the 100 dollar bill: I would put in a sealed envelope and hang onto it. Knowing you have a little emergency money, when times are tough makes you feel a little less stressed.

    Thanks for a great post.

  22. I would most likely spend it in homeschool supplies like a science kit or curriculum for my two boys. They are so interested in science and experiments I’d maybe even buy them a microscope 🙂

  23. Jeni Turner says:

    First I would tithe on it then I would use the rest to pay on my credit card. I already like you both on facebook.

  24. Natalie M. says:

    Unfortanetely, we have debt, both consumer and medical. I would probably use the hundred dollars to pay down a doctor bill.

  25. I’d probably take my husband out to dinner at our favourite restaurant and have a really nice night out.

  26. Andrea Welte says:

    If I found a $100 bill, I would use it to buy groceries, assuredly.

  27. Andrea Welte says:

    Also, I follow both of you on FB. Thanks!

  28. I would put 100 bucks in the new baby fund :). Also, I like MSM and Simple mom on facebook.

  29. I would pay down some school loan debt. It’s the only kind we have, but there is a lot. We throw all the money we can at it!

  30. I haven’t put the credit cards away for good yet but I’m working on it. I do a lot of babysitting and I get paid in cash. I have one of those coupon organizers and each tab has an activity (either the kids or mine) and the amount I have to pay monthly. I divide the cash up between the tabs and try to only use that to pay for those extras. If I had an extra $100 mysteriously appear I might take out $20 for a manicure but the rest would probably go towards swimming or ballet lessons.

  31. I like both on facebook

  32. I would use my $100 for my monthly massages. It’s the only thing that takes my shoulders out of my ears!

  33. Would love to read this book. We are on a cash system, but still have questions. If I found $100, I would either put towards our college debt (almost done with it) or put in our “next car” fund. We will be paying I cash! Yay! Enjoyed reading your post! Thanks for sharing.

  34. I follow on FB.

  35. Funny, this really happened to me one time. I found a $100 bill in a parking lot! That year my husband was out of work and we used it for Christmas gifts and food. Now, I am having a hard time coming up with an answer. I’d have to tuck it away until I had time to decide the best use for it.

  36. Hmm, $100 would definitely go into our “we’re closing our house is 6 days and need any spare change we can find” fund!!
    Sarah M

  37. 8gr8grows says:

    Unfortunately I have not followed this advice, so a mysteriously appearing $100 bill would be sucked right into a payment.

  38. Sharon Gruttadauro says:

    a find $100..what would I do…I would tuck it away because I know our vehicle is going to need new tires in the near future and I want to have the case ready!

  39. 8gr8grows says:


  40. Lawana Gray says:

    $100 would go into savings right now for an emergency fund.

  41. 8gr8grows says:

    Liked Money Saving Mom on FB…already Liked Simple Mom!

  42. Lawana Gray says:

    I tweeted about this!

  43. Lawana Gray says:

    I like you both on FB

  44. Tweeted! 🙂

  45. sandi watson says:

    If I found a mysterious $100, I would stash it away in my secret place. Thats what I do with any money I find anywhere in the house and some day I will either have something I really want to buy with it, or I will desperately need it and it will be there waiting!

  46. sandi watson says:

    Like you both on facebook!

  47. With a $100 I would probably buy some books or go on a date with my husband. These are “extras” and stuff I save for.

  48. $100 … I’d probably end up buying something for my kids – and potentially saving a little for future dental bills (son needs braces, enough said). :0/

  49. I tweeted about the giveaway

  50. I like (but wish I could “LOVE”) Simple Mom & Money Saving Mom on facebook! <3

  51. I have long liked you both on facebook

  52. I just tweeted about your giveaway as well. THANK YOU for the opportunity!!

  53. Great post! If $100 magically appeared, I would stick half of it in my snowflakes, the other half I would use to buys Crystal’s book for my DL and two sisters. I want to share all the great insight with them!

  54. I’m totally going against the grain here but we use our credit card for everything. Rarely do my husband or I have cash on us. We’ve never purchased anything we couldn’t afford, nor do we over-purchase. We pay our card off monthly. We chose a card that gives us cash back (one without all the strings attached) and because we put nearly everything on our card, we get several hundred, if not thousand, back every year. And it makes it easier to track what we spend our money on. I know this doesn’t work for everyone but only using cash wouldn’t work for us.

    • Same here Lia.

      4 Reasons I use Credit Cards instead of Cash:

      1–If I lose my wallet, I can just cancel my cards–no money lost.
      2–My husband can track my spending through our online statements (i.e. more accountability)
      3–Credit card rewards (We have earned over $2000 in cash and gift cards to places like Amazon and Wal-Mart in the past 12 months)–this is my #1 reason
      4–Less hassle–Faster check-out at the store, no trips to the ATM, if something I always buy (Cheerios, chicken, toilet paper, etc.) is on sale I can stock up on the spot

      I think this article is good food for thought, but I hate how cash is always viewed as the smarter, wiser, best money-saving way and that is just not the case. You need to know what kind of person you are (like if you’re responsible with money or not), evaluate both sides, and come to a decision that is best for your family. (We have never failed to pay our balance each month in the 7 1/2 years we have been married. We have the money in our checking and it is automatically withdrawn each month.)

  55. Katie Espigh says:

    If I found $100 in my pocket, I would put it in my envelope for “home improvements” and I’d look in my other pockets for other money and then I’d go buy some new kitchen cabinet pulls and handles. (we have been all cash for one year now. It’s working great for us!)

  56. I follow you both on FB!

  57. A mysterious hundred dollar bill? I’d put it toward the Bosch mixer I’m saving up for. 🙂

  58. i would probably spend it at the home improvement stören if i fund it. this book seems like a great read !

  59. This is like a great book. My wife and only use cash and it is a great way to live for so many reasons.

  60. I disagree with your point about paying off a card every month. I do it, and I have enough cash reserves that I could’ve paid cash. Using a card helps me track where my money goes–the transactions appear automatically in my (free) Mint account. That helps me manage my budget. When I pay cash, I lose track. Sure, I could sort all my receipts or write a log, but my system is a lot less work. Plus I get rebates from the credit card company itself. And I spend almost no time at banks and ATMs.

    I like your point about living on the money you’ve already earned, but I think you took it too far.

  61. We have a farmer’s market near our house that recently opened. We go and have fun but do a lot of window(booth) shopping. If I had to spend this money, I would use a bit of the money there and stock up. Even with this splurge, I would have extra money so I would use on Valentine’s Day gifts for the teachers at my son’s school.

  62. $100? Sounds like exactly the amount I need to get material for my Etsy shop (and to finally get it going!).

  63. Katherine says:

    I would use the $100 to stock up on a few grocery items in bulk – oats, flour, honey, yeast, and then probably some diapers and baby wipes. And if there were any left over, there’s a gorgeous black and white striped sweater I’ve had my eye on for awhile now waiting for a sale.

  64. If I found a $100 bill, $10 of it would go to our church. Then $90 would be put toward our debt snowball. We are working hard to pay of my college debt by next October. We too believe that Cash is King! 🙂

  65. Katherine says:

    I like you both on facebook.

  66. If I found a $100 bill unexpectedly in my pocket, I would likely put it towards paying the hospital bill from having my son: we’re still slowly but surely paying it off!

  67. I like both Simple Mom and Money Saving Mom on facebook.

  68. probably save it for a weekend away or trip.

  69. We are currently saving for several big, upcoming expenses so that $100 would go straight to the savings account.

  70. Kathleen Hall says:

    I would use the money to pay for a special meal out for my family when they are in town for my son’s wedding.

  71. I’d put it towards our spring break plans – it would easily cover a night in a hotel with a pool! The epitome of glamor to my 5 year old!

  72. $100 cash … my “shopping fix” happens at yard sales. So, the surprise money would go in my envelope purposed for that and I would stretch it as far as I possibly could with great deals on things that other folks were getting rid of!!!

  73. Thats alot of money to me. I would save it.

  74. I liked you on fb.

  75. Just tweeted your giveaway!
    Thanks 🙂

  76. I would use an extra $100 right now for a nice light fixture in a bathroom of the house we’re fixing up to move into.

  77. “Found money”? – part as a gift to the local Mission our church has just connected with and part to buy some needed supplies for our kitten with a broken leg. :-/

  78. I tweeted!

  79. In reality probably groceries;)

  80. I already like Simple Mom and MSM on fb!

  81. I already like both Simple Mom and Money Saving Mom on FB

  82. I “like” both Simple Mom and Money Saving Mom on Facebook!!

  83. I’d pay bills with $100!

  84. I would probably put it towards our new carpet fund! We quit the credit card game about 1 year ago and now save cash for big (and small) purchases. The carpet fund is a slow growing one though, even with the pay from my second job going directly to it!

  85. I liked you both on facebook!

  86. Sadly, I would put it toward my credit card debt.

  87. I would add it to the vacation savings fund.

  88. I also liked both on Facebook.

  89. If I had $100 bucks in my pocket I’d buy an external hard drive for my computer! we need one desperately but it’s a splurge item not a necessity. =)

  90. Love this article and reinforces everything we learned the hard way. we have been credit card free for 3 years and it can be challenging, but we wouldn’t go back. An extra $100 – I think we’d pay down some medical bills from the kids and maybe treat them to a movie and ice cream.

  91. I tweeted! https://twitter.com/#!/AHPhoto/status/160360155127611392 Thanks! I’d love to have Crystal’s book!

  92. Hmm, a free $100… To be honest, it would probably go toward a new stash of lovely fabric. 🙂

    I like this post even though I happen to be one of those people mentioned in #3 who pay off a card every month. 😉 I have a bunch of ING accounts, one for each budget category (food, car, etc.) and at the end of the month I tally up what’s been charged from each category and transfer the amounts to my main account. Then I pay off my card and collect my rewards points. 🙂 It sounds a bit complex, but it has really streamlined things for us.

  93. I like on facebook!

  94. While I’d like to say, go shopping, my hubby and I have a “What if…” plan in place for those times we are given extra money. It’s the same percentages no matter the amount. We call it our Windfall Plan: 10% to church, 10% to spend however we want, 20% to Emergency Fund, 20% extra towards our house principal, 20% Saving for Long Term Home Projects, and 20% toward our retirement accounts.

  95. I would probably put it in our savings account until I needed it. We’re self employed and this is our slow time of the year. So we try to have a little money set aside just in case.

  96. I tweeted.

  97. If I had an extra $100 I would put towards a piece of furniture I’m saving up cash to buy.

  98. I would buy books and go to starbucks for a chai latte and buy the person behind me thier drink! Looking forward to reading this book!!

  99. I liked everyone on Facebook.

  100. I would out my $100 directly towards our mountain of debt!!