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. As a young married trying to live simply and frugally, I would love a copy of this book!

  2. Put it towards our credit debt 🙁

  3. I tweeted about this giveaway!

  4. I liked you guys on Facebook!

  5. if i got $100 i would do one of several things:
    -put it in the bank
    -use it on groceries
    -use it to get some things we need for our new baby (coming at the end of march!)

  6. Throw it in the bank.

  7. I would put it toward paying off a credit card — we’re trying to get out of debt!

  8. i’m a major fan of cash only…my husband is as fanatical as i am about it. but we have lived without debt (minus the mortgage) for several years and now. i don’t carry around a credit card although we have one in the house. i see no purpose since we have an emergency fund, but my husband likes to have one on hand.

    if $100 turned up in my wallet and i’d treat the family to a night out to dinner and movie since i don’t have to apply it to credit card debt 🙂

  9. Christine S says:

    $100? Pay off some debt. Yep, I could really use this book!

  10. I “Liked” Money Savings Mom and Simple Mom!

  11. With $100 – I will pay down one of my debts.

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

  13. If I found a $100 bill, what would I do with it? I would probably stash it under my mattress for an emergency! There’s always SOME emergency

  14. Ha…with an extra $100 I’d put gas in my car and go for a drive! Maybe to a Costco. We live in the middle of the forest, 1/2 hour away from a small town and 2 hours away from real shopping…and we are snowed in. I’m lookin’ for an escape right now!!

  15. $100 in my pocket: I would pay a utility bill. 🙂

  16. I just liked both on Facebook.

  17. I would save the money for my health insurance premium-it’s my biggest expense each month!

  18. I also tweeted your giveaway-@dayspring82

  19. we have had a few credit cards and they are only for medical emergency’s, like if we can’t afford our sons medication, it is more than we can afford each month, and we got the credit card just for that purpose. all our other credit cards were paid off and then we closed them. I don’t like having credit, but for my sons medication I feel it is beneficial to have one, but if we do have the money we just pay cash for it. Credit cards can get out of control, and if you are living beyond your means then they come in handy, but you can’t abuse them, and if you are living beyond your means then how would someone in that situation be able to pay off the credit card on time without cutting themselves short on another bill each month? what we do is we pay it as soon as we can by the next paycheck. It always works, but because we make it work, there is never a time to say well we can use it because I need new shoes, or anything like that. As long as we have food to eat, a home to live in, and cars to drive then we will continue to do things the way we have been to get by. I think its amazing that you have never had to have a credit card. I would love for that to be the case for us. I am hoping that won’t be the case much longer, I have started my own small business and am working hard to grow that and keep moving forward in life!

  20. Kim Cleveland says:

    I would hope to spend the $100 on a Kindle, but more than likely, I would just spend it on groceries. Would love to win a copy of this book.

  21. Kim Cleveland says:

    I “like” both of you on facebook.

  22. If I had an extra $100, I would stick it in savings because we are expecting our 2nd baby in June and I would like to save a decent amount of money between now and then.

  23. I like you both on facebook.

  24. I would probably buy some fabric for some sewing projects I have queued in my brain

  25. I tweeted!

  26. I like on Facebook!

  27. If I found $100 I would use it to pay off my credit card debt.

  28. If $100 mysteriously showed up, I would use it to pay for textbooks for the 2 college courses daughter is taking. Using used books, that would cover it!

  29. I’d probably just add the $100 to my everyday money and it would slip away.

  30. If I were to find $100…hmm…that is a hard one, but I would put $10 (10%) in our adoption fund (that is what we do with special “gifts”) and use the rest for a special splurge date with my husband!

    I really appreciate your post! We just made the goal this year to go completely credit card-less (if that’s a word). We have a little bit of credit card debt and that is our only debt right now. We are working hard to retire that and live without ANY debt. When I called to cancel a credit card the lady on the other end of the phone was completely shocked that I didn’t want a credit card any more, even though I got rewards/% off purchases/etc. The concept of not having any credit cards seemed foreign to her. Thanks for the pointers and encouragement!

  31. I would put it toward the $1000 lab test that my daughter needs.

  32. i think it would put it towards a fancy date with my husband. it’s been a long time.

  33. I liked you both on FB!

  34. I’d probably put it in the bank–those rainy days sneak up on you!

  35. We are zealously working to pay off our debts, so if a $100 it would go directly towards the car. And fast so it wouldn’t disappear!

  36. Oh, forgot to mention…..love your topic and I COMPLETELY agree!

  37. With an extra $100 I’d order my family pizza for dinner, put $50 towards an extra mortgage payment, and put the rest towards my decorating fund for our new house.

  38. I liked you both on FB!

  39. It would go right into our house fund. We too are trying to purchase a house with cash.

  40. I like MSM and Simple Mom on FB.

  41. I did buy a new outfit!

  42. $100? I would go sign my kids up for water safety lessons.

  43. $100 huh? I think it would need to go into savings…I moved out on my own just over a year ago and would love to put a small amount of money into making the hand-me down furniture look a little bit more cohesive 🙂

  44. Cara Rahm says:

    With 100 dollars, I would buy my husband a birthday gift and save the rest.

  45. tweeted! seriously considering the 30-day challenge. I’ve declared 2012 a year of change and am excited to try out a few new things this year…excited to see which ones work for me and all I’m sure to learn in the process

  46. The problem is that Credit History doesn’t just affect your ability to get credit. Your insurance rates are based in part on your credit score. When a friend of mine was searching for a job two years ago, several of the places he interviewed with told him they couldn’t hire him because he had no credit history.

  47. liked on facebook 🙂

  48. already like msm on fb. now i like sm too.

  49. Much as I’d like to blow $100 on something special, we would put it immediately into our emergency fund.

  50. I like both of you on FB!

  51. What would I do with $100? Wow that is a good question. I would probably put the money in a savings account for our baby we have on the way. It would be the right thing to do.

  52. I’d put it toward my credit card!

  53. I tweeted about the giveaway 🙂

  54. I’d probably use $100 to stock up on meat/milk/eggs/butter from our co-op…real food is expensive and it would be such a treat to get it for free 🙂

  55. I honestly don’t know what I’d do with $100. We’ve worked hard to be in good financial shape right now – but we’re having another baby in June, so the $100 would probably go into savings and help let my husband take a bit more time off of work if it becomes necessary!

  56. Love Crystal’s book. I had the opportunity to review it and have already begun implementing her strategy. Any extra cash is going toward our goal of saving for dressers for our girls. Thanks for the giveaway!

  57. I love this article! I’m sharing on Facebook so everyone cam see We aren’t the only strange people that don’t use credit cards ;). We are expecting our 3rd child this summer so I’d probably put it towards baby items- maybe some new cloth diapers.

  58. If I found $100 right now I would use it to by some storage for my new craft area that I am setting up.

  59. $100?

    I’d use it to buy a new logo for the website I launched a few months ago – http://www.freemiamifun.com – it lists more than 2,000+ free, fun things to do in South Florida. 🙂

  60. I need to be smarter about money. What a great article and giveaway!

  61. I like both on Facebook.

  62. If I had $100 appear I probably use it toward groceries. We are a family of 7 and groceries is our biggest fluctuating expense.

  63. Candace D. says:

    I would use this $100 and put it towards our debt, your book would be very helpful as I am looking for ways to change our poor spending habits.

  64. I tweeted this giveaway.

  65. If I were being sensible, I’d put it into our emergency fund. If I were going to splurge, I’d buy that pair of Vibrams I’ve been eyeing for months.

  66. I would use it toward a Vitamix so we can make super healthy smoothies, soup, etc for myfamily.

  67. hmmm, I’d probably put the $100 in our “date night” cash envelope and use it on an overnighter with my hubby…we have one planned to celebrate our recent anniversary 🙂

  68. I like the comment of letting it sit for a bit, but it would go to debt!

  69. christylee says:

    I would get a pedicure! I am pregnant and having a hard time bending over to paint my own toes!

  70. If I found $100. in my pocket I’d put it on my visa…

  71. Carol White says:

    I would put a a mystery $100 towards a new pair of glasses. I am really having trouble seeing out of these old ones!


  72. I might treat myself and my kids to a coffee and hot chocolates at Starbucks, but then the rest would go into the bank to save up for our next vacation!

  73. Beth Brown says:

    A hundred dollars would go toward going to a church conference this summer. We never seem to budget enough for that.

  74. I’ve liked you both on Facebook!

  75. I understand all that about using cash but what I don’t understand is how do you order things online if you don’t have a credit card? How do you make reservations at a hotel? I know you travel at least for conferences and I bet you take a family vacation once a year or once every few years. I would sincerely like to know how you do that without a credit card.

  76. I like both of you on facebook.

  77. I would add it to my Ipad fund that I have been slowly growing over the last few months by selling some ebay and craigslist items. I’m slowly getting there, with cash! 🙂 Thanks for the giveaway, I LOVE both your sites and follow them regularly.

  78. Sarah Weyers says:

    Tuck it away for vacation time!!

  79. If I had an extra $100, I’d invest it into my little blog:)

  80. I’d put it in the bank and earmark it for fun things next summer with my son, like day trips and a zoo visit!

  81. Tweeted:)

  82. Casey Duncan says:

    I’d use the extra $100 on parts we need for our car.

  83. Already like you both on fb:)

  84. If I found a $100 mysteriously in my pocket, I would immediately turn it into my bank account and use it to pay a bill. Honestly, things aren’t going great for us financially, and I’m finally stepping up to set things straight. Not sexy, but a must-do.

  85. a $100 bill would go into my emergency fund. or maybe I would use it to buy new tires for my car.

  86. I tweeted! I tweeted!

  87. I would likely use $30 for an extra date night for my husband and I and put the extra $70 into the savings we’re trying to build up. I like your website and have learned a lot about couponing and particularly about CVS deals.

    It’s great that you haven’t ever used credit cards, but it is possible to use credit cards like cash. My husband and I have used credit cards for almost everything (we rarely use cash) in our 8 year marriage and have always had money in the bank to cover every cent we’ve spent. And in the last four months we’ve made over $100 in reward money.

  88. I would add that $100 to our food budget. My husband wants me to feed a family of 6 (baby number 5 coming in June) on $400. (That’s food and toiletries) I keep running out of money before then end of the month.. We have $45 left for this month. We have company coming over for dinner this weekend and I want to fix a really nice meal for them but am worried about the budget.

  89. I would either add it to the money jar or give it to my hubby to squirrel away somewhere. There have been many times when that money has saved us!

  90. $100 would go toward my daughter’s first birthday party (presents and cake and decorations).

  91. I would spend it on food, gas…the usual.

  92. I had to learn the hard way about this, but we don’t use credit cards either. We do have one, but my husband keeps it tucked away. It’s very liberating.
    I’d love to say that I would do donate the money but honestly, I would put in my savings account for a special trip I’m planning for my eldest daughter and I. When she graduates, we want to go to Ireland and now that she’s a freshman, that savings account needs some growth!

  93. Oh I liked both pages on facebook as well 🙂

  94. If I found $100, I would…

    a) save it to put towards the down payment or furniture for the house we are building


    b) get the 2-hr mini-vacation massage that I need after moving cross-country

    I would argue relentlessly with myself about what to do. Which option would win? Hmmmm….

  95. I would stock up on groceries or fill my truck up with gas.

  96. I would buy a couple homeschool books that I’ve been eyeing but don’t have the money right now to buy.

  97. Sarah Weyers says:

    Liked both Simple Mom and Money Saving Mom—would love this book!!!

  98. If I found $100, I’d finally buy the sewing machine I’ve been eyeing for months. I want to make gifts to save money, do this would be a great investment. Thanks for this opportunity to win the book!

  99. I need to read this book! I’d probably pay some bills & buy a latte with the $