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. I would buy that stainless steel skillet I’ve been wanting for over a year.

  2. I liked both pages on facebook.

  3. I’d probably save it or use it for gas/groceries.

  4. I would use $100 to pay our vet bill. With two cats and a older dog, we are frequent visitors of our local vet.

  5. I liked both of you on facebook!

  6. I’d buy a new pair of snow boots- My 11 yr old outgrew his . So he took mine ( they are black snow mobile boots- not pink or flowered or anything) And he needs them to walk to the school bus. Dress boots with heels are NOT cutting it in the 10 inches of snow we have.

  7. I like Money Saving Mom and Simple Mom on Facebook.

  8. If I found an extra $100 in my pocket… well I might think they were someone else’s pants for a start!
    But assuming they really WERE my pants lol… I reckon I would put it away, in my wallet/bag in an envelope in a hidey hole – for the real ‘rainy day’ stuff.

    Be that a friend who’s short on cash and no idea how they’re going to put food on the table, be it needing to leave the house in an emergency in a hurry (fire, flood) – whatever. It would be there. I’ve accidentally forgotten about money I had in an envelope in my bag before (someone paid me back something I leant them ages ago and I forgot about it)… it was a real bonus to find when I was hunting for small change and found that instead 🙂

  9. Hmmm. Probably use it toward a laptop to help with the business I am starting!!!

  10. Debbie Karp says:

    read the email and would love a chance to win Crystals book.

  11. I would put the $100 in my daughter’s college fund! I do not want her to have student loan debt.


  12. I would be so excited to find $100 in my pocket. I’d come up with all kinds of ideas about how to spend it (buy a book for myself or my kids, go out for lunch or dinner, or maybe get a manicure). But then the guilt would take over, and I’d end up using it for gas or groceries.

  13. Sounds like a wonderful idea – debt free!!

  14. I’ve also liked both Money Saving Mom and Simple Mom on Facebook! (Of course, I’ve Liked Simple Mom for some time. 🙂 )

  15. I would set it aside for some things I need for our new little baby boy due to arrive in a month. 🙂

  16. I would put the $100 in my checking account to pay the credit card bill, then I’d go all cash for threeo months! Thanks for the chance to win.

  17. Debbie Karp says:

    “liked” you both on FB

  18. I like you guys on fb, too.

  19. I would stick $100 in my wallet and use it to treat myself to a coffee every once in awhile. With a toddler and a newborn, I need those little moments!

  20. I would use it to pay off medical bills. I don’t have credit cards but the medical bills sure know how to add up.

  21. I would probably buy clothes for MYSELF with the $100 since I rarely do that.

  22. I like you both on FB!

  23. Virginia P says:

    An extra $100 would be used for groceries or utilities. Thanks.

  24. Oh! $100 would be such a gift…we would probably splurge on fresh fruit that is out of season right now (berries and such) and then give some away! We have friends who need some basics covered….:)

  25. JenniferTobey says:

    I’d add it to my TBA envelope. My husband and I both have a To Be Announced envelope. When we get a windfall or unexpected cash (sold a bike, birthday money, etc.) we put the money in the envelope and save it for a rainy day or something we don’t feel belongs in our family budget.

  26. help pay off unexpected medial expenses

  27. tweeted it!! too

  28. Michele Puccini says:

    I applaud you for never using or having a credit card.

    What would I do with a $100 extra? Well, I was recently laid off, hubby’s hours have been cut for the winter…I would definetly stock up on groceries.

  29. I’d save it towards the purchase of a grain mill. Thanks for the giveaway!

  30. I like both MSM and SM on facebook.

  31. I would take a trip to Trader Joes.

  32. I tweeted! I’m @bj0y (it’s a zero, not an oh)

  33. If I found $100 I would probably use it to buy something I have been wanting for my kitchen. If not I’d put it toward a camp my daughter wants to go to.

  34. I would put the $100 into our trip fund. It’ll help pay for a fun vacation for our family!

  35. I would put the $$$ towards the balance on our credit card.

  36. Seeing as my husband is unemployed, I’d probably put that $100 to use for gas or groceries…

  37. I like Simple Mom & Money Saving Mom on facebook.

  38. Liked Money saving Mom on Facebook… I already like Simple Mom 🙂

  39. I would put the money into our savings account.
    This idea of living without a credit card seems great, but I have only one question. How do you keep your all important credit rating up without a credit card?
    We had to experience the hard way how it is living without a credit rate as we moved back to the US without any debt etc. but when it came to buying a car and a house we got dumped with the highest rates as we had no credit history.

  40. holley dumond says:

    I would pay off debt with it. Not fun, but good.

  41. I would use it as a little extra to put on my school loan. One of 2 things my hubby and I are working on paying off. It is a slow process (getting rid of debt) which we vowed never to get ourselves into again.

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

  43. Michele Puccini says:

    I tweeted about the giveaway.

    tweet handle: Michele Puccini

  44. Michele Puccini says:

    Like both on Facebook

  45. Though not exciting or glamorous, I’d put it into our emergency savings fund. We’re in the process of re-fluffing it.;)

  46. I’d use it to buy a new pair of running shoes. We are having our “no spend month” and WOW is it opening my eyes! If I don’t win this book I’ll buy it (next month of course!).

  47. I would buy yarn. For sure. $100 can get me a sweater’s worth and probably some socks!

  48. I would put the $100 bill that mysteriously appears in myr pocket toward my Vacation budget. It long overdue!!

  49. Put it in savings!

  50. This would be great! If I had $100 suddenly land in my pocket, I honestly would just put it toward debt. I am trying to combat that right now. It’s just crazy how fast it can build up, even just using a debit card and not a credit card. I really need some help in the budgeting area and it’s my big goal for this year.

  51. I’ve “liked” Money Saving Mom and Simple Mom on Facebook.

  52. oh wow, I’ve heard of the all cash challenge but never new exactly how to go about it, I’de love to read this book! If I found a $100 in my pocket, I’de probably hold onto forever, just seeing it would be security. That’s what I did with the 50 dollar bill I found months ago. Its just sitting there, and I love to see it. Makes me feel like that’s 50 bucks I have complete control of and that is safe frombeing spent up in the bank account. Wierd I guess.
    I would tweet this but I’ve never tweeted.

  53. I would put that $100 towards our summer vacation fund. We are taking our kids to the beach to celebrate our 10th anniversary!

  54. Seeing as I havent worked since may 2010, I would get gas or groceries with it. I am learning a very hard lesson about credit card debt…and believe me, when we get out of this giant debt “hole” and I am earning money again, we wont be going back to credit cards.

  55. I would give the money to a family who is fundraising for an adoption. They need about $1000 for some agency fees very soon and they are currently doing a goat milk soap fundraiser. I’ll include their blog address if you would like to help this family out! I know every dollar adds up and if you aren’t interested in soap (although I’ve ordered it and it’s amazing), then would you consider donating $1 to help them out? http://milesoftheheart.blogspot.com/

  56. I am excited about this book! I think it will transform my life.

  57. We are all for using cash and our only debt is our home. We do have a CC, but pay it off at the end of each month.
    I have a question, how do you go about renting a car, hotel room, purchasing items online, etc without a CC?

    I actually have the answer to that… it was suggested by Dave Ramsey and it’s a great balance, especially for those who are weaker in resolve to be careful with their money. It’s called PerkStreet. It works like a CC, but it’s pre-paid (and you get a % back as cash). We simply have our bank push X amount of money per week (our budgeted amount) and then we can use it easily where we need to (it can be used as a debit card or a CC, but you only get % back when it’s used as a CC). You can never get into debt with it because it simply will only work for the money in the account. And if someome were to steal it… they can only steal the amount left in the account (and it’s not connected to your bank account, so there’s no risk there either).

    Personally, for my business (graphic design and photography) I have no choice but to have a way to purchase things online (prints/products from my professional photo lab, computer parts, camera/lighting equipment, etc). Most of those places don’t offer a cash option. And I’m not willing to pay twice as much to shop at my local camera shop.

    But there’s a trick to how I do it… Each time I make a business CC purchase I deduct it from my check register because it’s money already spent. Then when I pay my CC bill for the month there are no surprises. I know how much I can spend because I know the total in my account each time I do a transaction. That being said, I am uber careful what I spend (both personally and for my business). There is nothing, short of a medical emergency, that I am willing to go into debt for.

    Would love to hear your take on this. 🙂

  58. I liked both simple mom and money saving mom on facebook!

  59. throw it at our credit card debt before I realize I have it! done

  60. liked on facebook

  61. Wow!! Great giveaway!! A extra hundred bucks… so many places it could be put to use!! As a homeschool Mom… I could use it to put on next years books!!! 🙂 Thanks for a chance to win!!

  62. I would definitely send that $100 to help pay down credt card debt which we are trying to get paid off. That’s one less $100 to have charged interest this month.

  63. I’d save it. Since I’ve been using YNAB (You Need A Budget), it’s taught me to stop living paycheck to paycheck, budget everything and live on money from months ago. Really helpful. Having control of your finances is the best feeling in the world.

  64. I would love to win! Sadly, I would use the $100 to pay off credit-card debt…. we are trying to live on 1 income for a year while I’m on maternity leave and it’s not going so well. For the first time ever, we have a credit-card balance. I’m thinking we need to go cash-only!

  65. I tweeted.

  66. I liked both pages on Facebook.

  67. I would use the $100 to stock my pantry.

  68. If I found $100 I would order something from Boden…a catalogue with great clothes that I just can’t afford!!! I would love to win this book!

  69. $100 in my pocket? first I’d check to see if I was wearing someone else’s pants…. then I ‘d probably use it to pay on one of our medical bills, or …. yes…. our credit card balance.

  70. If I found $100 bill…it would most likely go to gas. With the prices being so crazy, we have to up our budget just to keep the tank full…

  71. I would use it towards an upright freezer off of craigslist – our chest freezer is just too small!

  72. My hubby has had some extra medical bills over the last 9 months, so I would put that $100 bill towards paying off medical bills.

  73. Well, I should probably say I’d save it, but instead I’d head over to Nordstrom Rack to combine it with my $40 gift card to get a purse I saw last week that I talked myself out of. (In my defense, it’s been at least 5 years since I got a new purse!)

  74. I could get Daddy 2 pairs of jeans and Mommy one pair – that would be very helpful to our wardrobes AND budget 🙂

  75. I would use it to buy my daughter’s formula. That is the most expensive thing we buy these days!

  76. I was thinking that I would probably put the $100 towards groceries and getting a good stockpile going again, but then I read another comment from someone who would use it for her mission trip. Much better plan ~ we also are going on a mission trip this spring, so I would put it toward those expenses!

  77. I would use the $100 a purchase a new fall/winter coat.

  78. I follow you both on facebook as Idaho Jill

  79. Like you both on FB

    Amy Lanser

  80. If I found a surprise $100 bill in my pocket (and no one else claimed it 😉
    I’d put it in my house fund! We’re saving for a house and everything extra goes there!

  81. I tweeted

  82. I “like” you both on FB

  83. I have ‘liked’ you both on FB! 🙂

  84. I put the money towards buying a new vacuum.

  85. And I tweeted the giveaway!

  86. I like MSM and SM on FB

  87. I liked both Money Saving Mom and Simple Mom on FB!! 🙂

  88. I like both Simple Mom and Money Saving Mom on FB.

  89. I want to say that i would put it towards my debt….but to be honest I would hide it away and keep it for when my kids needed a little extra for something. Maybe i would do put $50 towards my debt and save $50 for my kids…..that is a better compromise. Oh…how nice it would be to find a $100 bill….hahaha.

  90. I’d think about spending that $100 on something fun but would probably use it for groceries or diapers.

  91. I tweeted about the giveaway.

  92. Laurie Osborne says:

    I would use it for gas! gas is so expensive and my daughter has to drive 45 min to school every day.

  93. Today, if I found $100 in my pocket I’d use it towards a buying club order that I decided this morning to forgo since I don’t have the money for it this time around.

  94. I already like both (and subscribe to both via email).

  95. I tweeted about your giveaway!

  96. Paying a medical bill.

    I’m curious how do you shop online with only paying cash? I have 5 kids and I do a lot of shopping for our basic needs online to save time. I’m just curious about how one would do that only paying cash? Do you use pay pal as an exception?

  97. I would sign my youngest daughter (just turned 4!) up for a dance class or soccer class!

  98. Already FB like you both 🙂