Friday, February 6, 2009

Free stuff!

I have been a Dave Ramsey demi-fan for years (big on the finance stuff, less so on the overt religion) and as such I try to use cash for almost all purchases that can be made in cash.

However.

Yesterday I got an email from my bank--apparently, I have a rewards checking account, and they had some promotion where if I cashed in some of my rewards, I would get 1,000 extra rewards. I took a look, and ordered a $10 CVS gift card to get me started on this whole ECB thing. Ok, that was nice.

Then I remembered that my credit card is also a rewards card, and I have been sitting on $40 in cash back rewards. I wondered if I could trade it in for a gift card instead, so that Peanut and I can go out to eat without really spending money. Sure enough, I got a $45 gift card for Outback Steakhouse.

So. Now my dilemma--studies show that you pay more when you pay with plastic than when you pay with cash. But I'm not about to run to the mall and go clothes shopping. When Peanut and I go grocery shopping, we shop exclusively from a list and pick cheaper/on sale items almost every time, and we're about to start using manufacturer's coupons as well. So it's not really all that likely that we'll spend a lot more using plastic at the grocery store--but if I use my debit or credit card for all these purchases (and pay the credit card off in full each month) we could conceivably be getting gift cards for restaurants every other month or so. I

t's scary to stop using cash--ten years with Dave is a long time. But it seems kind of silly to ignore rewards that are available for the taking if I just shift one small thing in my mind. (Also, having a credit/debit card stolen is infinitely better than having cash stolen, and there have been a lot of muggings in my neighborhood lately.)

Do you use cash or cards more frequently, and for what reasons? Do you think you spend more with a card than with cash, or is that just a general statistic and an individual with greater self-control could just benefit from the rewards?

5 comments:

  1. Cash vs. credit is a dilemma I often have in my head. I normally use credit cards for everything for the rewards points....I pay off my balances every week (this may be excessive, but I like the way it works out), so I don't pay interest ever. It works out quite well.

    I always hear people talking about using cash for everything....and I've tried, but since I think in $20's I find that my money leaves me a lot faster. Sure, I may force myself to spend less at a grocery store if I only take $20 with me, but since I know I have a poor concept of numbers I consciously decide to take an extra $20 with me just in case. That obviously negates any benefit you'd get from using cash, lol.

    Anyway, that's just my take. I trust myself to pay my balances each week and so a credit card with rewards makes a lot of sense for me.

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  2. To rephrase a bit: I know I have a poor concept of PRICES, not numbers.

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  3. I use credit nearly exclusively, and have for some time, such that a number seems more "real" as an electronic transaction on my banking/yodlee/mint than it does as a $20 bill in my hand.

    To that 12-18% more statistic, I like to say, I am not a statistic.

    X% of the population has $Y in consumer credit card debt. What does that mean to me? Not much.

    (not much of a ramsey fan)

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  4. It depends. Ramsey is right for most of the noobs who listen to him, but not for me. I posted my thoughts before I went to see him, which is a whole different discussion.

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  5. I use cash for any offline transactions, primarily because I'm in a cash business and it's easier. I like paying in the moment, much as I earn in the moment...easy to keep track of.

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Thanks for commenting!