Paying Cash-Only, Family Spends $1,800 Less

By switching to only paying for everything in cash, as we wrote about here, one family ended up spending 24% less in a month, $1800 less. To get there they cut up 8 of their 9 credit cards. The last one they froze in a glass of water in case of emergency, another technique we recommended before. “I don’t have enough money in my purse to go buy this new dress or this new shirt that I want, so you don’t even step foot in the store, because you don’t have the money…You don’t make all those extra purchases that you really don’t need.” Marissa Farhat told Good Morning America.

Paper or Plastic? Family Saves With Cash [ABC via Blogging Away Debt]


Edit Your Comment

  1. ironchef says:

    I never realized people have so little self control to the extent that you have to freeze a card in ice to stop spending.

  2. DashTheHand says:

    Another case of extremism because people can’t control their own habits and blame credit cards.

    Look, having credit cards on you doesn’t mean you have to buy everything in sight, and if you have a personality like that, even having cash on you isn’t a smart idea.

    On the other hand, if you are a responsible adult, you can understand that credit cards aren’t magic money and they can be used responsibly and in MANY CASES are MUCH BETTER TO CARRY THAN CASH.

    You lose cash, its gone forever. You lose your credit card, its covered. You don’t get money back on cash purchases. Etc, etc. Please consumerist, stop reporting these bogus stories of irresponsible people turning their lives around because they don’t understand what it is to manage their finances.

    • Good for them, I’m glad to see people can find interesting and inventive ways to help them keep their finances in mind.

      Way to think outside of the box with suggestions Consumerist.

      • side says:

        @valarmorghulis: Agree 100%. Way to save money! And boooo to those posters above who say things like “no self control blah blah blah”. I spend a minim of $1,000 a month on frivolous things, bar tabs, expensive dinners, new shirts, sports equipment. If I had to pay cash for those, probably wouldn’t be ordering table service at a club. Not because I cant afford it, but because I would never have that kind of cash on me. So by default, regardless of my “self control”, I’d save money by using this strategy. Kudos!

    • BrianDaBrain says:

      @DashTheHand and @ironchef: What’s up with the holier than thou posts here? You can’t really knock the these folks for learning their lesson. Impulse spending is a HUGE problem in the US, and it’s a problem that many, many people have. Why do you think credit exists in the first place?

      I say, kudos to these folks for actually admitting they have a problem and taking steps to resolve it.

      I used to have the same problem. Several years of spending nothing on extra things for myself so I could pay off debt taught me a hard lesson. I now carry one credit card that handles all my purchases that I pay off every month. Some people need to make the mistake and correct it before they learn that credit isn’t free, “magical” money. And I say bravo to the folks that actually learn from it and become responsible consumers.

      • ThickSkinned says:

        @BrianDaBrain: I didn’t get a holier than though vibe from the two posters you mention. They merely brought up the fact that if you are so irresponsible with your credit cards that freezing them in a block of ice is your last resort, maybe you shouldn’t have credit cards in the first place. And dare I say it, too irresponsible to breed. It is one thing to be a college freshman who gets into credit card trouble. It is quite another to behave like an 18 year old gorging on the credit card buffet when you are a grown adult with children.

      • DashTheHand says:

        @BrianDaBrain: The difference lies in your post. You claim to have learned your lesson about impulse buying and yet you still carry a credit card. Bravo! I have no issues bugeting my money and I too only carry two credit cards on me at a time (one AmEx which I prefer to use for cash back purposes, and one Visa for the times when AmEx is not accepted).

        As I have posted in previous “credit hater” threads, using credit allows you to gain interest on the cash that you leave untouched in your savings account as well as each bonuses on purchases with most cards available today, while cash has the problem of not earning you interest when its not in the bank, if its stolen its gone for good, and having cash in your wallet/purse is just as much of a temptation to use as a credit card.

        • dveight says:

          @DashTheHand: Totally agree with you, credit cards are not the problem. Its the misuse of credit cards that is the problem. Some people will unfortunately learn the hard way, but those should be the ones right out of high school or just in college; once you are past that point, its time to grow up and take responsibility and control yourself. If it means not using credit, then so be it, but DO NOT blame credit cards, blame yourself.

          @graffight: “i honestly can’t think of an instant where a credit card is better than an emergency fund and a debit card.”

          Well how about if you had just bought an iphone about a month ago, then had some guy with a 10 inch blade mug you? Cause that’s what happened to Anthony (aka 1oneWon, and the story was also posted here if you missed it []) and now he has to fork over $400 if he wants another iphone. Me, on the other hand, I just give American Express a call and get repaid for a new phone.

          Now this is not to say an emergency fund is not needed (I have one), but credit cards have their advantages, and people should use them as long as they can handle the responsibility.

        • BrianDaBrain says:

          @DashTheHand: I completely agree with you that credit cards aren’t the problem, the misuse of credit cards is. However, we seem to disagree in that I support people who take steps to correct the misuse of credit cards. It doesn’t matter to me whether they freeze the card so they can’t use it, cut them all up, throw them in the blender, or what have you. The end result is the same: they are being more financially responsible.

          Also, I did learn my lesson. I carry a credit card because, like you, I get cash back. :) I never max it out and I never spend more that what I know I can afford to.

          @ThickSkinned: In a perfect world, people would realize long before they actually got their first credit card that they’d be irresponsible with them and never, ever apply for one. But, we don’t live in a perfect world. People say to themselves “I will use it responsibly” or “It will only be for emergencies”. Then they end up spending a lot, maxing it out, and then they’re left to clean up the mess. I used the phrase “holier than thou” because the two posts I was referring to came very close to belittling the OP for getting into trouble in the first place. The article is about the fact that they are finding a way to solve their problem, and they don’t deserve criticism for that.

      • BoomerFive says:

        @BrianDaBrain: Great post, I agree completely. Gotta love those “they have more than me so they suck” whiners that comment.

    • Xerloq says:

      @DashTheHand: @Fujikopez: @thefastest:

      Extremism – sure, but what do you recommend the family does when their spending is out of control? I think it’s highly commendable that people want to get their spending under control, regardless of income level.

      The family used the cash method as a way to modify their behavior which is positive in my mind.

      One thing I do is shop only one day a week. Coupled with the Seinfeldian method of DBTC it’s been a powerful way for my family to gain control and keep our credit cards.

      @valarmorghulis: Amen.

      • thefastest says:

        @Xerloq: i do not have any advice. my finances are out of control. i carry balances on my credit cards. i have not paid off my student loans and i’ve been out of school for two years, and i smoke cigarettes (in MA packs are over $7.00, but i sneak to NH for 3.50 packs).

        I’m just jealous that someone is talking about saving 1/2 of my take home income (electrical engineer) by just “using cash.”

    • Adam2010 says:

      @DashTheHand: One of the best things that one of my engineering professors preached in a cost estimation class was, “cash for consumables and credit for investments”. Thank you, Dr. Drake!

  3. Fujikopez says:

    This family didn’t really “save” $1800. They just didn’t spend money they didn’t have, which they should have been doing all along.

  4. thefastest says:

    Saving 1800 per month means you have to have 1800 per month. They said they saved 24%, which was 1800. That means they were spending 7500 per month before, which is 90k per year. I wish i was so fortunate to have 90k to blow on whatever and then be psyched when i can somehow cut that down to only 68400. commendable.

    • sjaguar says:

      I do not know if freezing my credit cards in ice would help me. I know a few of my credit card numbers by heart (too many online purchases obviously).

      Now, I keep most of my credit cards (that are still open) in a drawer. I have all of my expenses planned out for the next few months. If the expense is not listed and it is not absolutely necessary, I don’t buy it. That has definitely limited my spending sprees. I do keep one card with me for emergency purposes. If I’m stranded somewhere, a credit card frozen in the freezer does me no good.

      @thefastest: The video shows that did a lot of ATM withdrawals. I wonder how much gas & ATM fees cost them. But I agree; I wish I had that much money to burn.

    • Sarcastikate says:

      As with most things in life, moderation in all should be practiced. Cash when it makes sense, credit cards when it makes sense. Being this family is like being on a diet – yeah, it’s fun when you lose a few pounds right away, but you always go back to your lousy habits when the rush wears off.

  5. MyPetFly says:

    Frozen in a glass of water… did the glass break? : )

    And what thefastest said… and DashTheHand.

    • jamesdenver says:


      I always keep a few glasses in my freezer 1/3 with frozen water. or ice i guess that would be.

      Nice for making an easy cold drink and don’t have to pry apart ice cubes. (I have a simple fridge)

  6. Ecks says:

    I can understand many people are not responsible with credit cards. Having multiple credit cards should be a warning sign. It seems the people in the article had no idea of a budget, or even making sure they spent less than they bring in per month. Even without having a clear budget, the easiest way to “not spend money” is spend less than you bring in! For the most part, large “luxury” purchases should wait until you have the money, not put on a credit card where you pay 10% to 25% more than the purchase price just to have it right away.

  7. balthisar says:

    Wait a minute… they have $1800 to blow on crap every month? And that’s $1800 reflects only a 24% savings? Are they counting their mortgage and other fixed expenses? If I saved $1800 per month, it’d mean that I didn’t spend any money, ever.

  8. Cattivella says:

    Wow – way to blame the OP. These people had issues with spending on credit cards – an issue MANY people have (oh my gosh, people are human and have weaknesses!) and they figured out a way to help restrain and retrain themselves and ended up saving a LOT of money from what they were previously spending. I say applaud them for getting themselves on the right track and figuring out a method that works for them and might work for others too.

    They are no longer putting themselves into more debt and are keeping their spending within what they have. Good for them. If they inspire just one other couple to relook at their spending habits, their story will have been worth being told.

  9. cristiana says:

    I am not sure if the savings was their total expenditures, i.e. including mortgage, car payments etc, or is it just their daily spending. But, regardless of that, they normally spent $7500 a month, and that month they spent $5700. Most people do not make that much money in a month, yet alone have enough of that left over to spend that much. So, even if everyone could save 24%, that 24% could be significantly less than the $1800 touted in the article.

  10. akacrash says:

    More accurately: “Family learns to control impulse spending by switching to cash.”

    If you already have self control, cutting up all your cards and switching to cash just ends up being annoying.

    As for freezing it in a glass of water, i have my cc # memorized. That won’t stop my online purchases. :p

  11. Legal_Eagle_In_Training says:

    I don’t see the need for everyone to attack this family. Yes, cutting up your cards and freezing the remaining one in ice is extreme, but it takes guts to acknowledge the fact that desperate times call for desperate measures. It’s obviously not a long-term fix, but it has helped them start down the road to fiscal responsibility.

  12. TPS Reporter says:

    Man, the OP blaming is heavy here. Irregardless of how much money they make, saving this amount is to be commended. You can overspend if you make 20k a year or 200k a year.

  13. Adisharr says:

    Hey is it works for them. Freezing your CC is a little extreme but everyone’s got their thing. I freeze all my paychecks.

  14. I wonder if a couple of the blamers are unfamiliar with the Sockpuppet portion of Consumerist Comments Code.

    • JustThatGuy3 says:


      And somebody else might not have read this part of the code:

      “Posting only to point out someone is breaking the rules is distracting and unnecessary.”

      • @JustThatGuy3: DAMN, guilty as charged. Thanks for pointing it out (seriously).

        @DashTheHand: There is a famous phrase, “out of sight, out of mind.” Many people have a psychological barrier to shelling out cash that is not present in swiping a card and signing your name. Is that right? Sure, people are different and work in different ways. It’s awesome that others are able to keep your credit balance in the mental realm of “these are actual dollars” rather than “just a number.”

        It reminds me of the famouse Stalin quote “A single death is a tragedy, but a million deaths is just a statistic.” Not to say that finances and genocide are at all similar…

  15. DashTheHand says:

    If theres blaming going on anywhere, its from the people claiming to have “saved” this money because of credit cards not being available. They went to the extreme of cutting them all up and only having one frozen in a block of ice to rely on in an emergency and then applauding themselves that they saved money because they didn’t have the temptation to use credit as opposed to the willpower and knowledge not to use credit when its overreaching their budget.

  16. ncboxer says:

    I think the family did a good job in getting a handle of their expenses. But this piece does seem to blame credit cards for their troubles. I on the other hand, use credit cards to control my spending. If I have cash in my pocket, I tend to spend it here and there. There is little record on what I spent on cash. If I spend on a credit card, I have a monthly report that tells me exactly what I wasted my money on that month.

    This is one of the reasons I spend almost everything with a credit card. It also has a grace period until it has to be repaid (free interest in the bank), offers additional warranties for items purchased, gives me cash back (though minuscule), is easily replaceable unlike cash, and easier to carry around (weighs less in my wallet). I pay my bill off every month so it is just like virtual cash to me.

    I think the whole spend more than you make thing is in your mind. The OP has their way to control it, I have mine.

    • camille_javal says:

      @ncboxer: I’m the same way – since I pay off my credit cards every month, I record every transaction in my own ledger, so it’s constantly coming off of my total balance. I have to see everything I spend repeatedly. It’s so much easier to piddle away cash here and there (especially in New York, with cabs). So, I try to keep my cash purchases to smaller things, and take out cash rarely enough and in small enough amounts that, if I’m piddling some of it away, it’s not that big a deal.

  17. Consumerist-Moderator-Roz says:

    Okay, folks. Time out.

    Yes, we have a don’t blame the victim rule. I don’t think anyone’s necessarily been an egregious offender so far, but please remember, posts attacking the victim are not kosher. Calling victims names, for example, does not help and is rude to do. However, that doesn’t mean that nobody can ever post anything even moderately skeptical. Saying that spending wildly on credit in general is a bad idea does not equal breaking the Comment Code.

    We do, however, have a ‘don’t junior moderate’ rule – if you see a problem post, the proper way is to email or IM me. Don’t hit other people over the noggin with the rules. It’s just as irritating and only tends to increase the drama of the thread.

    Dashthehand, please lessen the histrionics. The caps aren’t necessary, and, neither is the dismissiveness.

    ironchef, please don’t post just to poo-poo. Post something substantive – something constructive.

  18. xphilter says:

    so I don’t even think the article mentioned that they actually saved $1800…just they spent $1800 less. I guess you could say they saved $1800 of less debt then…weird. Personally, I can’t use cash, I spend it way too fast and I never know where my money goes.

    • mitten says:

      @xphilter: I totally agree with you. These folks figured out a way to spend less than they had been spending, because gee golly, they were human and sometimes spent on things they didn’t need. But what they did is ‘spending less,’ it’s not ‘saving.’ Imprecise language leads to imprecise thinking and that can lead to all kinds of wrong conclusions. So kudos to Consumerist for saying it precisely, and shame on ABC for using misleading language.

    • SpdRacer says:

      @xphilter:I have to agree with you, I get cash and it is gone! When you break that larger bill, it amazes me how fast the rest(the change from the larger bill) of it goes. Other people I know only use cash cause they can “see” what they have to spend.

  19. RandomHookup says:

    I don’t know how many people I talk to that tell me they need to make at least $300k to prevent cash flow issues.

  20. tex1ntux says:

    Terrible headline.

    I’m in my second week of Technical Writing, and we already learned to proofread titles to make sure their meaning was clear. Try changing it to Cash-Only.

  21. temporaryerror says:

    The way the headline reads, it sounds like consumerist is downplaying the sig. of the family’s savings, as in ONLY $1800. not, as if it were worded this way: “only paying cash saves family $1800/mth”. Not usually the grammar police but it took me a moment to read that correctly, so I thought that I may as well mention it.

  22. SOhp101 says:

    funny headline… and what do you know, it was changed right when I was about to comment.

    I say congrats to the family. Some people have less self control than others so you gotta do what you gotta do to save money. Not everyone’s the same.

  23. BoomerFive says:

    I would also say that changing the headline to “paying only cash” would be a god idea and make things a bit clearer.

  24. graffight says:

    I’m gonna have to ditto a lot of you guys posts…don’t be so hard on the story there are a lot of different methods to handling personal finance. i personally am a proponent the don’t borrow money method of personal finance…i honestly can’t think of an instant where a credit card is better than an emergency fund and a debit card. As far as using cash is concerned, some people do better when their money is tangible…it hurts more to spend it. I agree…have a budget, tell your money what to do, but on top of that ditch the credit cards and get an emergency fund…and only the headline said they “saved” $1800…really they just didn’t spend it which is totally different, quit being such nerds :-)

    • camille_javal says:

      @graffight: i honestly can’t think of an instant where a credit card is better than an emergency fund and a debit card

      then you should read many of the consumerist posts that cite the extra protections offered by many credit cards for large purchases, not to mention chargebacks, and the recent posts on hotels blocking out portions of your bank account.

    • JustThatGuy3 says:


      “i honestly can’t think of an instant where a credit card is better than an emergency fund and a debit card”

      I can think of two off the top of my head:

      1. If there’s a fraudulent charge – with a credit card, you still have your money while you fight it. With a debit card, the bank/vendor has your money.

      2. When I get my $500-600 annual cash back check from my credit card.

  25. stanner says:

    Did anyone else besides me miss-read the headline? – Paying cash ONLY SAVED $1800!

    They had a problem and they fixed it. I’m not sure where all the griping about not having will power comes in. Complaining that they had to cut up their cards is like complaining that someone in AA had to get rid of the booze in the house as part of their recovery – sure they should be able to refrain from temptation, but why not make it easier to resist?

  26. morganlh85 says:

    Ww, thy’r lk gnss r smthng. Wht nvl d.


  27. Consumerist-Moderator-Roz says:

    Folks, the title was changed, but please comment about the meat of the article. Spelling/grammar type stuff should be emailed to the editor – it’s not interesting for people to read in threads and doesn’t facilitate discussion.

  28. harlock_JDS says:

    psychologically i find actually laying out cash for something different than using a debit card (i almost never use a CC and usually leave it at home). In most cases it doesn’t make a difference but if i’m doing something where my judgment may not be as good as normal (like say drinking, going to a casino etc) i do it strictly cash only and leave the debit cards at home.

  29. nicemarmot617 says:

    This is just a problem with our whole culture. Spend spend spend buy buy buy, never mind if you have the money or not. Never mind if you don’t need any of these items. And if you have a problem, well you’re an impulse spender. It’s a disease!

    All these things just sound like irresponsibility to me. People need to grow the hell up and start acting like functional adults. It is very sad that this family had to go to such extremes to pull off normal adult behavior. I mean, kudos to them for managing it – but who knows if they’ll keep it up. Not to mention, they just gave their children a terrible lesson about credit cards and cash. Hasn’t it been shown people are actually more likely to spend cash if they have it on them? Just picture their kids in school “My daddy had to freeze his credit card in a glass of water because he and mommy had no self-control and kept spending more money than they made”

  30. LoriLynn says:

    Credit is such a slippery slope and we haven’t been educating our children properly. Credit companies go after college kids with no experience/education on how the system works and what the potential consequences of irresponsible credit are (possibly aside from a credit score).

    Good for these people for figuring out what they personally needed to do for their family as an immediate solution. But financial/credit education in schools (along with parental commitment)would be a much more positive long-term solution.

  31. graffight says:

    I just don’t understand why everyone is so connected to their credit cards…just think, if EVERYBODY used their credit cards responsibly and paid it off every month the credit card company wouldn’t make any money, and honestly if everyone could do that why would we “need” credit cards? credit cards do prey on people and families like these…what’s wrong with having the money in the bank and only spending what you already have. if everyone was as responsible and adult as they say this family is not…good ol visa and Discover would outa business

    • bonzombiekitty says:

      @graffight: I don’t “need” my credit card. But it’s damn useful. It acts as a buffer between my actual money and the world (steal my credit card and I can cancel it without you having raided my bank account), various consumer protections (i.e. charge backs and extended warranties in some cases), and rewards (I’ve gotten back about $150 this year so far).

    • FLConsumer says:

      @graffight: The CC cos wouldn’t go out of business at all if everyone paid their bills — that’s what the transaction fees are for. They make more than enough off these alone to keep themselves afloat. The interest rates for balances carried over is how the credit card co’s stay ahead when people default on their obligations through bankruptcy and other means of evasion.

      Glad to see this family cut their spending by $1800…now the real question becomes “what did they do with that $1800?” Hopefully it went to pay down debt or (better) actually put money away for the future. Anyone ever notice that small mammals seem to understand the concept of storing up for the winter/hard times whereas humans don’t?

      A few years back I switched from about 20% credit cards/80% cash to 95% credit cards/5% cash and love it. With cash I only had an idea of how much money was disappearing, not where it went.
      Now I know exactly how much I’m spending in every category (food/dining/household/car/entertainment/etc) in real-time. I use Quicken and my bank’s branded version of to keep track of everything. It’s quite simple: assets in bank – credit cards = amount available. Once it’s on the card, it’s as good as gone from my bank account in my mind. Not sure why people find this concept difficult to comprehend/see.

      Also, I think putting things on a credit card that you currently don’t have the liquid assets for is unwise. It seems to be a slippery slope that many well-intentioned people find themselves slipping into.

      It goes back to my mantra of “don’t buy sh*t you can’t afford.” If you don’t have the money for it right now, you can’t afford it.

      One of my investment banker friends takes the definition of “afford” even further, saying you know you can “afford” something when you confidently have the assets to buy something but still choose not to. (Living well under one’s means)

      • floraposte says:

        @FLConsumer: The problem is that most people don’t have “right now” money for higher education, houses, or cars. We’ve redefined “afford” to include the concept of acceptable or even good debt. It’s not hugely surprising, then, that people’s debt resistance is less than it used to be.

        • FLConsumer says:

          @floraposte: I absolutely agree.

          I worked and saved for college + grad school and had absolutely no problem with it. BUT, I could clearly see the disconnect between me and the kiddies who were riding on the coattails of mommy & daddy. Huge difference in mindset and maturity. I also noticed that all of the kiddies had all of the latest toys including ipods, all new laptops, etc.

          Getting out of grad school debt-free (and making money on the student loans?): priceless.

  32. Anything they can do to get the money saved is a good step. If the credit card being frozen works for them then fine. For me I just pull out my weeks spending money on Sunday and when I run out then I am out.

    There is a strong need to High School students to learn personal finance, then maybe we would not be poo pooing these people for learning it late in life. I know it took me some mega failures to fix it and its still a struggle.

  33. stanner says:

    I think some on here maybe didn’t read the actual story. The family never said they were in financial trouble – only that they wanted more control over their spending. Which they got.

    No irresponsibility, no extremes, just basic financial scrutiny through the use of a cash only budget.

    • eelmonger says:

      @stanner: So, in other words, they already had a significant amount of money and were able to cut $1,800 worth of luxuries. Lots of people don’t make that in a month, let alone are able to spend that much, or even 24% of whatever their income is, on things that are immediately cuttable. I applaud them for what they did, but this solution won’t work as well for all people. The key is self control and moderation, not flat out denial.

  34. Marshfield says:

    One key to living on a cash-basis is to stop thinking of the Credit Card “available balance” as actual money, which I know I have fallen into. And to replace that buffer, you need to …. SAVE ! (shock)

    And saving money in our economy can be very very hard to do, much harder than simply getting a higher limit on your card.

  35. Rectilinear Propagation says:

    “I’m not sure where all the griping about not having will power comes in.”
    @stanner: You just can’t win with some people.

    If you have a problem with X it’s, “OMG, I can’t believe you have a problem with X! You’re a terrible human being!”
    If you fix the problem with X it’s, “OMG, I can’t believe you did that to fix the problem! You’re a terrible human being!”
    If you avoid X entirely it’s, “OMG, I can’t believe you can’t handle X! You’re a terrible human being!”

    They weren’t even having serious money problems. They didn’t say they were in a lot of debt, just that they were spending too much. You’d think they’d be commended for at least recognizing the problem before it caused any real damage.

  36. sponica says:

    Some people can’t help but fall into debt, things happen, people lose jobs, student loans don’t go through. My loan was not processed correctly, and while I had enough cash safely stowed away to make 3 rent payments (May, June, July) this summer and my portion of ConEd, I had nothing to cover my other living expenses (food, subway card, etc). What was I supposed to do, not eat for 2 months and walk the 8 miles to my job in the upper west side from Brooklyn and the lord knows how many miles to my externship in Kew Gardens Queens? I do plan on paying down the debt, when I get the chance, but I need to make sure I can pay my rent before I do anything else.

  37. nataku8_e30 says:

    While I do understand that there are people out there who get into tough situations and need help getting out of debt and back on their feet, I do wish consumerist would spend a little more time on those situations where people were completely responsible and yet were still screwed over by incompetent, uncompromising, irresponsible companies. It seems like lately the stories that have been posted focus on simple matters with sensationalist headlines. While those may be the easiest stories to read, write and understand, they’re not necessarily the most interesting.

  38. AgentTuttle says:

    I think the point here is that paying cash breaks the shackles of debt slavery. Oh, and is more private too.

  39. UnStatusTheQuo says:

    I’d say I make about $500 a year from Chase Freedom by using it for everything. I use ONLY that card, and for everything. Rewards add up, and since you can redeem $200 in rewards for a $250 check, I do that twice a year, at least.

    There are 3 kinds of people as I see it as related to CCs:

    1). Those who see it as an “I want” fulfillment mechanism. These types almost always have rolling balances.

    2). Those who use it for convenience and pay it off each month, but don’t get much out of it.

    3). Those who exploit them by using them as a tool for financial gain, and pay them off once a month or more. If they could charge their mortgage and car, they would, because they would get even more points to redeem.

    I’m a 3. My favorite is using the card online in accordance with a % back program like or MS Live Cashback. With that, I have sometimes realized a savings of 20% on products, figuring in 5% from Chase Rewards, 15% from cashback…

    In the end, it’s all about self control. If you are dead honest with yourself and find that you have none, stick with cash. If you do, then mercilessly exploit them.

    Such as this: need a $5,500 personal loan? HA! Banks will charge a massive %. If it can be put on a card, and your credit rocks, then open a 0% card for 12 months. Pay as much as you can, or as little, then transfer it when it’s about to charge interest. If you’re smart about it and don’t have too many accounts open, you can get away with this numerous times. Just an idea…

  40. howie_in_az says:

    So what did they do with that $1,800? Pay off the debt they’ve accrued by buying all those dresses that the mother now avoids? Put it in a low-yield savings account and get a whopping 0.5% return on it? Invest it wisely? Sock it away in a high-yield savings account? Buy CDs (not the musical kind)?

    Did anyone else quietly snicker when the article mentioned the numerous trips it took to fill up their SUV?

  41. Fly Girl says:

    There are lots of people saying “Wow, these people have such a lack of discipline that they had to cut up all but one card and freeze the other!!!” I, on the other hand, think that their actions show quite a bit of discipline.

    I mean, it is kinda crazy to think that they had NINE credit cards (daaaaaaaaamn, that’s a lot of credit!) but even cutting them up/freezing them wouldn’t stop me from using them. I have such non-existent discipline that I just can’t have credit cards PERIOD.

    Freezing my credit cards wouldn’t stop me from using them… Google toolbar knows my cc info, it’s too easy to look up the card number online… Nope, I just can’t have credit cards PERIOD… My debit card is bad enough!

    Maybe the reason this trick worked for the couple is because they don’t do a lot of shopping online. If I used only cash and didn’t carry my credit/debit cards with me and ONLY shopped in real-life, brick-and-mortar stores, I think I’d spend less, too. Regardless, they quit charging as much and spent less. However they did it, that’s a good thing.

    (Okay, full-disclosure: I have three credits cards– one that was just mine, one that was just the other-half’s, and one that is a joint card we got after a few years together… But I don’t have access to any of those cards– Fly Boy has sole control over them ’cause I’m a little spend-happy.)

    • Rectilinear Propagation says:

      “I mean, it is kinda crazy to think that they had NINE credit cards (daaaaaaaaamn, that’s a lot of credit!)”

      @Fly Girl: Several were probably retail credit cards.

      I know freezing a credit card wouldn’t stop me from using it either. I don’t have a credit card but I have my debit card number memorized (including the security number on the back). I have a low threshold for buyer’s remorse though. Sometimes I get buyer’s remorse before I’ve actually bought something.

  42. themrdee says:

    I think if one goes back and rereads all the comments they will find that LoriLynn made the smartest one.

  43. blockbustarhymes says:

    If they really wanted to make it a good story…they could donate that saved money to charity.

    Lord knows they didn’t need that money before. Maybe someone who could actually use it wisely would be better off with it

  44. SBR249 says:

    While I do commend this couple for their courage and discipline in tackling a problem, I tend to disagree with their idea to make it a more permanent solution.

    This type of thing should be a last resort and temporary solution for those whose finances are out of control and need to dig their way out of debt as quickly as possible. Once the immediate problems have been taken care of, it is critical, as LoriLynn mentioned, to educate oneself on how to take care of one’s own finances and use all available financial tools responsibly.

    Simply avoiding the issue isn’t going to help them. In fact, it may do more harm than good in the long term. What will happen when their kids grow up? Having dodged the problem all their lives, these parents won’t be equipped to properly educate their kids on how to manage their own finances especially with regards to CCs. This will only perpetuate the cycle when their kids are exposed to CCs and use them irresponsibly.

    Times are changing, while cash will always have a place in the world, its role is diminishing and not knowing how to properly use other tools will only be detrimental to one’s future.

    • floraposte says:

      @SBR249: I don’t see why they need to find a different solution if this one works. There’s no reason why they can’t keep this up or the kids can’t learn to use exactly the same restriction. It’s not like it can’t be called self-control if props are involved. It’s just a different form of self-control, no worse and no morally weaker than any other kind.

      @Sarcastikate: I think the only “should” is that people should find the way to handle money that works for them. Your proposed method sounds like a fine way, but it’s not the only fine way. There are plenty of people who work off of cash and use a credit card only for emergencies or occasional preplanned purchases without sliding into agonies of craving; it’s really not like sentencing yourself to eating only grapefruit the rest of your life.

  45. kaptainkk says:

    I knew there would be a lot of bashing of the general public stating that they can’t control their spending habits. I am certain you would spend less if all you used was cash. I’m sick of these people that say they use their card for points, rewards, etc. and pay it off every month. You my friend would be spending less if all you had was cash. It’s the perception that using plastic you don’t see your money actually “leaving” you and thats what CC companies bank on. The illusion that you can control your spending just because you pay off the balance each month is exactly that, a self-induced illusion.

    • unpolloloco says:

      @kaptainkk: That assumes no self-control over impulse buys. That also assumes that you live in an area that does not have a high crime rate. Personally, I would much rather carry a credit card and $20 in cash rather than $200 in cash.

    • bonzombiekitty says:

      @kaptainkk: I don’t think I would spend less if I just had cash. The big bulk of my monthly expenses is rent, student loan, car loan, gas, groceries, and utilities (in that order). Over that, I spend at most $200 for personal luxuries (mostly going out for dinner) which I’d do with cash or without it. I rarely buy anything unless I’m replacing something that is lost/broken/no longer usable. In fact, I’d bet I’d spend more when I have cash on hand because I’m more likely to buy myself lunch rather than bring it from home.

  46. synergy says:

    Sheesh. Surely they could save more. They saved what I used to make before I went back to school.

  47. pat_trick says:

    Imagine that–you can save money by not spending it! What’ll they think of next…

  48. Rhyss says:

    I grew up with a family who had a very tight budget and I got my first credit card at 19 in college. It was great fun. . .However, I paid the price over the years in debt. Now, I pay for eveything with CASH. I have a savings account that takes money out every month from my paycheck automatically. I totally understand the posts that folks make regarding the protection that credit card purchasing provides, however, one should be able to pay with cash and get the same benefits. I learned the hard way about my personal issues and spending. I don’t think it’s fair to put folks down because they don’t want to or can’t use credit. I think it’s a good thing.

  49. ShariC says:

    This is a good way to force behavior modification on yourself and I applaud the family for their success. To those who are criticizing, everyone has issues with impulse control. Yours may not be with spending, but I’m sure there are some things everyone could do better with.

    One word of caution though. The first month when you dramatically alter your spending habits is the most dramatic (and fulfilling). Your ability to do without starts to erode after awhile and the “buffer” of items which you have at hand gets depleted. For instance, you may have food in the pantry and use it up to avoid buying something, but eventually you’ll need to replenish your food supply.

    I think it’d be very interesting to track their spending over a year.

  50. RedSonSuperDave says:

    Since my bank screwed me over by charging me twice for the same book of checks on my first-ever checking account, for the past thirteen years, I have never used checks for anything except cashing my paycheck.

    I was fortunate enough to learn this lesson at a relatively young age. I never spend money I don’t have, I physically CAN’T do it.

  51. TMurphy says:

    While I agree being responsible with a credit card is better than cash, this family is now on their way to learning that responsibility, so this is definitely a good story and one I hope people will follow. Hooray for people converting towards the Consumerist Way.

  52. Fist-o™ says:

    I’ve commented on this subject quite a bit in the past. I’d like to share my opinion here.

    1. I cut up my last credit card a few months ago. I did this for several reasons. First, I think they are lousy organizations. Sure, you can get “Rewards”, but the minute a mistake occurs, they will force you to the binding arbitration clause. Just try to go to court over a discrepancy: You will lose, 90% of the time.

    2. Those of you who think you are smart & clever for using a credit card for “Reward points” or cash back, well, I hope you never have any fraudulent charges or ever end up on the wrong end of their legal department. We’re all dodging lightning bolts here, or don’t you read the articles here about how for instance, BOA re-opened a guys’ card after 10 years?

    3. These companies market debt, and I oppose them on a moral level. You think you’re outsmarting a multi-billion dollar industry who probably have teams of individuals, figuring out ways to make more money? Right.

    4. I don’t like the idea of putting a credit card in the freezer. If you have to acknowledge that have that much of a lack of self control, then you should cancel the card.

    5. Some people keep credit cards for emergencies. It gives them a sense of security. This was my case, and I actually experienced a pang of anxiety as I sat on the verge of closing my last credit card account. At that precise moment, I knew that this thing held an emotional hold on me, and it made me angry that such a thing could have such power over me. I destroyed it.

    I dare you to try it. See if you elicit an emotional response within yourself; a pang of second-guessing, a feeling of reluctance based on emotion, as you sit on the phone with the rep on the verge of canceling the account. I am really curious to know if anybody else experiences this.

    I have lived through all stages of a credit-card-owner, and I am very happy to have finally graduated to the level where I am completely non-dependent on them.

  53. EightIsEnough says:

    Gee, I’ve only had one credit card for the last 20 years….and survived!

    Cash is best when totally undocumented.

  54. jj_alfonso says:


    1. What kind of mistake forces you directly to binding arbitration? I’ve mistakenly paid credit card bills late, but I can count with one hand the number of times this has happened in the last several years. Each time it took one phone call to customer service to have the late fee waived, as well as any other finance charges that accrued.

    2. I’ve had one fraudulent charge on my card: a $5 charge for a Starbucks in Los Angeles while I was in San Francisco on business. One call to customer service had the charge waived, no questions asked. And I had a new card with a new account number in about a week.

    3. Credit card companies know there are people who they lose money on — i.e., those who pay their balances off in full. The card companies call them “deadbeats.” But deadbeats are far outnumbered by those with rolling balances. Card companies are fine with being outsmarted by the few because they are able to outsmart the many.

    5. My liquid cash in accounts at more than one financial institution, all under FDIC limits, give me security. The last emotional response I had with credit cards occurred when Citi Dividends dropped their cash back on gas and groceries from 5% to 2%. Thank goodness my HSBC rewards card still gives 5% on those categories. The day Arco sells gas at more than a 5% discount to gas stations that accept credit cards is the day I start paying cash for gas.

  55. Anonymous says:

    Whether I was totally broke or, like last year, had a pretty good job, I always made sure I paid my credit card in FULL at the end of the month, no matter how painful. I went through the bill of the one credit card I use, and highlighted unnecessary items (like I found out I wasted $50-$100 a month on junk at Walmart), then I stopped buying those unnecessary things.

    My husband prefers paying with debit, I prefer credit. Neither one of us carry much cash because it disappears too quickly.

    Also, my credit card gives me 5% back on gas and groceries, which is money that comes in handy during the holidays.

    I think the problem comes in when people spend hundreds on several different credit cards, don’t pay the full balance, then lose track of how much they owe where.