With every story we write about increased credit card fees, slashed rewards programs or hacked bank databases, a growing number of readers have expressed a growing interest in ditching their plastic and going cash-only.
Over at SmartMoney.com, columnist Brett Arends gives a pretty in-depth explanation of the 10 reasons he’s opted to live a life without credit cards.
Here are some of the highlights:
The card bonuses aren’t worth it.
“A lot of people use their credit cards for the frequent flyer miles or other bonuses. But… deals are getting less valuable, and are increasingly focused on cards with annual fees. Most of us are doing very well if we manage to get back 2% on our cards. Compared to the extra amount you spend, that’s chicken feed.”
Cash makes budgeting easy.
“I have a confession: I’m just not that organized. Nor, I suspect, are lots of people. But if I go to the bank once a week and draw out a certain amount of cash, it makes the budgeting automatic. Easy.”
Less worry about identity theft.
“Do you worry about handing out your card or details every time you make a purchase? I do. The banks and online merchants work hard to maintain security, but the crooks are just as inventive. And there are plenty of them.”
Fewer impulse purchases.
“[Credit cards] make it easier to buy things that we don’t need, and may not even want, on the spur of the moment… If you don’t have the money on you, you can’t splurge.”
I can still shop online.
“Yes, I’ll have to bend a principle, but I won’t have to break it: I can buy a prepaid card in a store and charge it up with cash. Okay, so it’s plastic, but I have to pay for it in advance, with cash, and it will have a limit.”
Cash rebuilds the link between what I earn and what I spend.
“I remember back when I got my first job: I started calculating how much everything I spent cost in terms of hours worked. That new CD cost two hours of my time, and so on. It was a good discipline. Credit cards weaken the link. It’s no wonder that the rise in plastic has resulted in an explosion in the numbers living beyond their means.”
We’d love to hear from those of you who have been able to maintain a cash-only existence. What are the biggest hurdles and are you sacrificing anything (other than fees and revolving debt) by giving up your credit cards?
10 Reasons I’m Cancelling My Credit Cards [SmartMoney]