Can you live without credit cards?

[99Saturn]

Originally Posted By: 99Saturn
Originally Posted By: hatt
The cash back doesn't add up to much. It doesn't make up for the extra money you spend by using cards vs cash.
Someone that can't control their spending because they have a CC doesn't mean the cash back doesn't add up to much. 2% - 5% off every purchase is still 2% to 5% back in your pocket.

Originally Posted By: hatt
Originally Posted By: 99Saturn
Originally Posted By: hatt

Nothing to do with people who can't control their spending. If your computer/device has the googles, look it up. You spend more with CC than with cash. It's just how the human mind operates. I'm also pretty sure just having the cash back feature will cause you to spend more. "The more I spend the more I save!!!!"

A person my come out if they only use then for fixed expenses, or to make required business purchases. The people who take it everywhere to get a % back are losing.


Your statement is my point - if a person walks into a store and thinks that because they have a CC they can spend more, then they need to control their spending.

If someone is going to go into a store and buy a gallon of milk, and because they are charging it are going to decide to buy a candy bar, then they need to rewire how they think about spending money. If they are going to save 2% on the gallon of milk and pay it off when their CC bill comes in, they are going to save 2%.

Personally, if I'm going to buy gas, I'm not going to buy an extra gallon or two because I'm charging it, but I'm going to enjoy getting 5% off via cash back.

I guess you're not going to do any research on the subject.

Gas is a good cash back option. You have to buy gas, and you have to have a card to pay at the pump. Walking around inside the Walmart, supermarket, mall, restaurant, not so much.

(I had to separate the quotes because the quoting feature was messing up who said what.)
The nature of most of those articles/papers that I’ve seen seem to indicate that there is a statistical correlation between the paying with a credit card and increased spending – association not causation (see ice cream and drowning – you can check that one in “the googles” as you put it). In other words people’s make a (likely theorized subconscious) decision is to spend more since a plastic card is not a tangible dollar bill. That’s what I would call a “need to control one’s spending”.

You can say it’s how the mind operates, I would say it’s how some people’s mind operate and it’s a behavior that can be unconditioned if someone operates that way.
As an aside, gas stations in NJ are all full service and there is often a discount for cash versus credit, where the attendee will swipe a cash card and collect from you at your car window, no need to go inside - the consumer should do the math.

 

[hatt]

Originally Posted By: surfstar
Originally Posted By: hatt
Originally Posted By: surfstar


I have no idea, as I do not have years of spending cash only vs years of spending via CC.
Seems like you should have an idea before making statements like: "Cash only people are weird, likely believe internet conspiracies and so on..."


Nah, I'll stick to my generalization and you can stick to yours

These CC vs cash arguments don't apply to me. I'm not a frivolous spender. It probably annoys some people around me at times, yet they all come to me for help/advice on any larger purchases.
Facts never have mattered much to yous guys.

 

[VeeDubb]

I don't think there is any question that having a credit card will increase spending. The question is whether it causes overspending or reduces underspending. I suspect the answer is individual specific.

I have lived short term in countries where cash is king and using credit cards will get a dirty look from the business owner or a hefty fee. It is extremely inconvenient because I do not like to carry huge wad of cash. So grocery shopping means a bunch of small trips rather than a big trip. You also buy bulk less so don't get the volume discounts. You plan your week around ATMs and manage your bank account actively rather than automate the process. There is no free lunch.

For people who can't control their spending,the hassle factor of cash is a good thing.

For people who's time is worth something, who have decent control, who pay off balances, and who max out retirement savings, where's the problem?

 

[hatt]

Originally Posted By: 99Saturn

(I had to separate the quotes because the quoting feature was messing up who said what.)
The nature of most of those articles/papers that I’ve seen seem to indicate that there is a statistical correlation between the paying with a credit card and increased spending – association not causation (see ice cream and drowning – you can check that one in “the googles” as you put it). In other words people’s make a (likely theorized subconscious) decision is to spend more since a plastic card is not a tangible dollar bill. That’s what I would call a “need to control one’s spending”.

You can say it’s how the mind operates, I would say it’s how some people’s mind operate and it’s a behavior that can be unconditioned if someone operates that way.
As an aside, gas stations in NJ are all full service and there is often a discount for cash versus credit, where the attendee will swipe a cash card and collect from you at your car window, no need to go inside - the consumer should do the math.
You can do your own experiment to see if you spend less with cash. I've done it. I spend less. And I don't buy much junk in the first place. Avg what you've spent in local stores for the last few months and get that much cash out and test it for a couple months.

 

[IndyIan]

The credit card companies do want to make money off of the most vulnerable people.
I remember a few years ago my CC company would have a monthly lottery and they would cancel whatever debt was on your card...
So for someone with gambling problems, this must've been almost painful, to possibly win but not have any debt on your card. Or to possibly have your card paid off no matter how much you owed on it. Either way it could've been a good thing to be carrying lots of debt on the car, even though it was very unlikely you would win.

 

[supton]

I'm sure I've made rash purchases on a credit card. Not seeing the green means it's something of an abstract concept. Then again, I've grabbed plenty of junk at yard sales and the like, only to toss later. "Oh it was a good deal and I'll use it, eventually." So I'd save even on that aspect, at least for myself.

Haven't carried a balance in a long time. I did in college, then twice afterwards when we wanted to spread the cost out over a couple of months. Big deal. These days we "have" to buy gas and groceries, so why not put it through the card and get cash back?

*

If I had to go to cash-only, I'm not sure I would spend that much less. I mean... rationally speaking, I'm already spending that much today, so, if I use the green stuff instead, all I'm doing is making it pain in the rear to carry around change (and I mean that literally).

Might wind up spending more. It's garage sale season, after all. For a long time I didn't carry cash, and thus, I didn't spend money on "cheap" purchases like that.

 

[Dave Hess]

Bubbatime,

I agree 100%

 

[JennyHemi]

I have several credit cards, and use them frequently for online shopping and every day purchases. I like it because there's some protection and muscle behind me if I need to make returns or somehow dispute purchases. I hate debt (don't have any, and haven't for many years), so everything is paid off every month. Most of my cards have some reward benefit, which is nice for getting free small household items or hotel points, cash back, etc.

I do some overseas shopping, and this seemed to coincide with the start of my card number being stolen at least once a year. It's a nuisance for sure, but has never cost me directly (beyond what it costs all of us, that is). When it happens, I change numbers and life goes on. Whether your info in stolen from companies or your transactions are hacked, there's almost no way to avoid being at risk these days.

Could I live without credit cards? Sure - but I'd have to compensate in other ways if I wanted life to stay the same. That would require a LOT more work and wouldn't necessarily give me any more protection.

 

[HTSS_TR]

Originally Posted By: hatt
Seems like you should have an idea before making statements like: "Cash only people are weird, likely believe internet conspiracies and so on..."

It only takes a tiny bit of overspending or impulse purchasing to negate the benefits of cash back. And then you have to make sure to not spend your cash back on a frivolous purchase like replacing a perfectly fine grill with a new perfectly fine grill like I've seen people do.

If you're the one who would spend all the money in your pocket for anything, needed or not, then you shouldn't have any credit card at all.

But many people just use credit card as a payment method for what they buy, and they only buy what they need not because they can use credit to get things they don't need.

Yes, I bought many things I liked not needed, but I would bought it with cash too if I didn't have CC.

 

[Jarlaxle]

Originally Posted By: hatt
Originally Posted By: jhellwig
Originally Posted By: Wolf359
Originally Posted By: jhellwig
Chasing the cash back and points will bite you in the butt eventually. It isn't worth playing their game. They are not going to loose money by letting you use their money. It will always cost you.


The problem here is that you have a forest and trees problem. In the aggregate, about 2/3's of the people carry a balance. Those are the ones the credit card companies are targeting. The other 1/3 that pay off their balance every month are the ones they refer to as deadbeats. If you are disciplined to pay off your credit card every month, you can take advantage of their system. They do lose money by letting you use their money. To them it's a numbers game, a certain number of people they'll make a lot of money on, some they will make a little and some they will lose a little. But overall, they'll make money. That's the nature of business. No business is ever batting 1000. Most people just don't really understand it so they think something else is up. They don't actually lose that much money anyway, it's the merchant that pays a percentage per transaction. It's actually the people who pay cash who are subsidizing those that use credit.


You can think you are going to be on the winning end all you want but all it takes is one time for something bad to happen and all that money you made is gone in a flash. One way or another everyone with succumb to an impulse and wind up on the loosing end. Might not happen with credit cards but it will happen in some way shape or form. It is a multi billion dollar industry to figure out how to separate people from their money. No one is immune. Life happens.

The 100% fool proof way to never loose money to a credit card company is to never have a credit card.

I have tried to play the game and lost. Luckily I wasn't in that deep. My wife kept insisting on playing the game till one day she looked and saw that the credit card bill was bigger than what was in the checking account. We had the money in savings to cover it but that was all it took to convince her.

Now if I could just get those losers to stop calling me to reduce my credit card interest when I have no credit cards or debt other than the mortgage life would be good.
A lot of people here think they're superhuman and not subject to basic human instinct and tendencies. For almost all people, having a credit/debit card means you will spend more money on average than people using cash. Card companies had a genius idea to send people a little money back at the end of the year to keep them engaged in the process. It's little different than the IRS sending you back a little of your own money at the end of the year. The scheme keeps the majority of people happy because they don't really understand what's going on.


I understand that I haven't paid a cent in interest on either of my cards in years.

 

[surfstar]

Twice I've used Citi's price rewind to get a post purchase price match.
Can't do that with cash.

Traveling to a foreign country? Where do your exchange your dollars at to not get ripped off in the process? Or simply use a 0% foreign transaction fee card.

It seems that there is a "preponderance of evidence" that points to a certain conclusion. But don't let that stop you from holding onto your belief that cash is king.

 

[Andrew1972]

credit cards offer so much protection with fraud and business I would never consider another way. I did get my account compromised using mall or public wifi and ordering something recently. Credit card company quickly closed account and over nighters a new card.

 

[99Saturn]

Originally Posted By: hatt
Originally Posted By: 99Saturn

(I had to separate the quotes because the quoting feature was messing up who said what.)
The nature of most of those articles/papers that I’ve seen seem to indicate that there is a statistical correlation between the paying with a credit card and increased spending – association not causation (see ice cream and drowning – you can check that one in “the googles” as you put it). In other words people’s make a (likely theorized subconscious) decision is to spend more since a plastic card is not a tangible dollar bill. That’s what I would call a “need to control one’s spending”.

You can say it’s how the mind operates, I would say it’s how some people’s mind operate and it’s a behavior that can be unconditioned if someone operates that way.
As an aside, gas stations in NJ are all full service and there is often a discount for cash versus credit, where the attendee will swipe a cash card and collect from you at your car window, no need to go inside - the consumer should do the math.
You can do your own experiment to see if you spend less with cash. I've done it. I spend less. And I don't buy much junk in the first place. Avg what you've spent in local stores for the last few months and get that much cash out and test it for a couple months.


No I'll pass. The variability in spending month over month is enough to throw off any analysis over a couple of months (ie car insurance payments made twice a year, auto parts purchase now that the weather is warm here, etc.). Plus exclusively only using cash would mean no AAP coupon codes when I buy those parts, or buying stuff on Amazon would be impossible and a few items would need to be purchased at local speciality stores for around twice the cost. No need to burn money (cash back and discounts) on an experiment.

 

[hatt]

Originally Posted By: 99Saturn
Originally Posted By: hatt
Originally Posted By: 99Saturn

(I had to separate the quotes because the quoting feature was messing up who said what.)
The nature of most of those articles/papers that I’ve seen seem to indicate that there is a statistical correlation between the paying with a credit card and increased spending – association not causation (see ice cream and drowning – you can check that one in “the googles” as you put it). In other words people’s make a (likely theorized subconscious) decision is to spend more since a plastic card is not a tangible dollar bill. That’s what I would call a “need to control one’s spending”.

You can say it’s how the mind operates, I would say it’s how some people’s mind operate and it’s a behavior that can be unconditioned if someone operates that way.
As an aside, gas stations in NJ are all full service and there is often a discount for cash versus credit, where the attendee will swipe a cash card and collect from you at your car window, no need to go inside - the consumer should do the math.
You can do your own experiment to see if you spend less with cash. I've done it. I spend less. And I don't buy much junk in the first place. Avg what you've spent in local stores for the last few months and get that much cash out and test it for a couple months.


No I'll pass. The variability in spending month over month is enough to throw off any analysis over a couple of months (ie car insurance payments made twice a year, auto parts purchase now that the weather is warm here, etc.). Plus exclusively only using cash would mean no AAP coupon codes when I buy those parts, or buying stuff on Amazon would be impossible and a few items would need to be purchased at local speciality stores for around twice the cost. No need to burn money (cash back and discounts) on an experiment.
I understand you wouldn't want to prove yourself wrong so excuses must be made. I thought I was pretty clear with "in local stores." That means trips to Lowes, Walmart, Best Buy etc. Of course you'd use AAP coupon codes for things you know you need at AAP. And you can shop on Amazon. The results are so apparent you don't need scientific experiments. You'll be dragging less stuff home.

 

[hatt]

Originally Posted By: Jarlaxle


I understand that I haven't paid a cent in interest on either of my cards in years.
You'd be onto something if we were talking about interest paid. We're talking about overall money spent.

 

[surfstar]

Hard to shop online with cash. Why would I pay more to have to go to the store to buy something and deal with cash, on top of that? Much easier to buy off amazon or ebay, etc.

So, factor in the time hassle of cash (going to ATM, going to physical stores, etc) when you want to talk about CC and spending more money.

Can you provide your analysis for us?

 

[javacontour]

Actually, you are pretty safe with a credit card. It's the card issuer's money, not yours at risk if the card is compromised.

I'd rather use a credit card than a debit card and have to fight to get my money back. Let the card issuer fight to get their money back if such a thing happens.

Originally Posted By: motor_oil_madman
Originally Posted By: JHZR2
I can, but why would I?

I use credit cards for convenience mainly. Less pocket change, easier tracking of expenses, etc.


Cause of situations like what I explained. You get stuck paying for someone else to go out and spend spend spend.

 

[hatt]

Originally Posted By: surfstar
Hard to shop online with cash. Why would I pay more to have to go to the store to buy something and deal with cash, on top of that? Much easier to buy off amazon or ebay, etc.

So, factor in the time hassle of cash (going to ATM, going to physical stores, etc) when you want to talk about CC and spending more money.

Can you provide your analysis for us?
You're making up stuff no one has said again. I never said don't shop online. I never said don't have credit cards. I never said don't get cash back. This shouldn't be so confusing for you. Maybe you're on too many forums and can't keep up with all your exchanges throughout the day.

Originally Posted By: hatt
Originally Posted By: surfstar
hatt and jhellwig - sorry, but I guess I'm superhuman. I've never paid a dime of CC interest, never paid a dime for fraud, and have collected thousands of dollars in cashback and miles/points bonuses. I am not your typical American consumer, though, and am disciplined enough to have savings and retirement funds. Your typical paycheck to paycheck American is likely to "fall victim" (ha) to CC use.
You've also ignored my entire argument and are posting about stuff I'm not arguing. The argument is about whether or not you're saving money overall by using credit cards with cash back. Most people are not. And we're discussing people who pay off balances at the end of the month. Clearly, people with balances are taking a beating. Do you care to address the subject matter?

 

[blupupher]

Originally Posted By: hatt
The cash back doesn't add up to much. It doesn't make up for the extra money you spend by using cards vs cash.

If I have cash in my pocket, I spend it on [censored] I don't need.
Credit card gets paid off each month, earn 2-5% on every transaction.

As other have said, if your smart, then it can add up to quite a bit.
If your stupid, it does not matter if you use cash or credit, you can just get into more trouble with credit.

 

[surfstar]

hatt, I can't compare using cash only, because I do a lot of online shopping. Can't use cash for that. Local shopping is gas and groceries for 90%+ of it. Paying in cash would have zero difference in the amount spent.

A rare thing, I currently have cash in my wallet and at home. What's my first thought? Deposit it into my checking account, so that I don't spend the cash and not earn CC rewards. Cash is super inconvenient for me, such that I won't ever do a cash only spending "experiment".


I can only reassure you, that I save much more using CCs than not. Y[rewards]MMV