Cash

[clevermanka]

Has anyone operated on a cash-only basis for everything but online purchases (and surprise emergencies, like $165 surgery bills)?

This article (link thanks to bestill) made me want to ditch the regular use of my credit card, even though I pay off the balance every month. I don't want the bastards at Bank of America deciding how to rank my credit based on where I shop.

In a typical coincidence, yesterday I received a refund on a product I returned two weeks ago. The company said expect a 30-day refund delay, so I paid my credit card bill in full on Monday. Now I have nearly $100 in credit on my card--that's after the bill for the stitches, and a consolation pizza dinner Monday night.

Starting now, I'm going to use the credit card only when necessary. I'll run this experiment through the end of August. It will be an interesting exercise.

Comments

[renniemom.livejournal.com]

pastmagic and I try very hard to operate cash only now. Of course, we're trying like the very devil to pay off the credit card balances we've racked up, but we're pretty much on a charge purchase freeze.

That is an interesting--and scary--article. We're moving more toward Big Brother all the time.

Now we do use our debit cards on a regular basis and I don't see anywhere they are mentioned in the article so I wonder if they are also tracked?

[clevermanka.livejournal.com]

I'm sure the bank tracks such things, but I'm not sure what they can do with that information to influence one's credit score.

I'm just going to take out a certain amount of cash per week and when that's gone, well, I'm broke until the next week. I don't want to deal with forgetting to record a purchase and overdraw myself.

[triadruid.livejournal.com]

Depends on if you count debit transactions as 'cash-only'. If so, then yes, for years, and couldn't be happier. I only use the CC when my cashflow doesn't immediately match the expense need (car repairs, medical, plane tickets, etc) but I can clean it up in the next two or three paychecks.

[stuology.livejournal.com]

I use my credit card for everything I can, but I'm like you. I pay it off every month so I am not carrying any credit card debt in which I get charged interest.

I do it for one reason: cash back. I get nothing for using cash and my debit card, but I get 5% back on gas, groceries and medical and 1.5% on everything else. It is amazing how that adds up, especially when you have a $1300+ daycare bill every month. It is a quandary they didn't mention in their article.

Now, if they took that away from me, then yes, I would use my card rarely. I would probably use it only to keep the account active so I have the long-term, good credit account on my credit report.

[clevermanka.livejournal.com]

I canceled my cash-back card a few years ago and got one from Working Assets (http://www.workingassets.com/). For every purchase, they give ten cents to progressive causes. I think I'll just round up an extra dollar or two on my cell phone bill (also through Working Assets).

For someone who's getting much-needed money back from purchases on the credit card, it makes total sense to stick with that system. Five percent is a lot. Gas and groceries make up over half my purchases, and I don't imagine your budget is much different.

[stuology.livejournal.com]

Yes, plus the other un-mentioned quandary: If I'm carrying $400 cash for a trip to Costco, and someone steals it, it is just fucking gone. If someone steals my debit card, I'm in the same boat. The money is just gone. My bank doesn't offer a lot of protection against loss against my checking account.

If someone steals my credit card? I have protection against that loss. I also have the ability to make claims with my card for damaged goods if the seller doesn't make amends, and it has extended warranties for bigger purchases that will cover issues after the product warranty runs out.

I agree that the practice of raising rates or cutting credit limits based on where I shop is not a good thing. I think my point is this: No matter what you do, you'll get screwed over by someone.

[clevermanka.livejournal.com]

My bank doesn't offer a lot of protection against loss against my checking account.

Wow, that stinks. My bank does...or at least it used to. In fact, I disputed a purchase made on my account several years ago, and they were really cool about working with me to get the money back.

[the-themiscyran.livejournal.com]

We use bank cards for things like airline ticket purchases, where you basically can't buy anything without a card number, but other than that we stick to cash-only. I like it that way, even if we do it out of neccessity. As far as I'm concerned, credit purchases are for things like houses, cars and the unexpected - emergency medical and car repair bills, etc - anything else that I want can be saved for, or I don't really need it.

[clevermanka.livejournal.com]

Yep.

It's one thing for credit companies to judge your credit risk based on your balance vs. credit limit (even though they've skewed that to their advantage lately) and payment history. It's something else when they start canceling cards based on where you shop.

[the-themiscyran.livejournal.com]

I read the article. *shudder* That first bit about considering people un-credit-worthy because of buying used clothing or re-tread tires turned my stomach. Gods forbid that we actually want to buy re-cycled items instead of brand-new disposable ones. So not only do they want to punish people for saving money, they want bigger piles of trash!

YUCK.

[clevermanka.livejournal.com]

Buying used stuff has never been a good idea for people who are solidly invested in corporate commercial consumerism.

It's not surprising. Just nauseating.

[rowangolightly.livejournal.com]

Bruce and I have lived totally without credit cards (debit card only) for the whole time we've lived together and intend to continue being cash-only for the rest of our lives...seriously.

We haven't found any transaction, from airline tickets to rental cars, for which we cannot use debit cards.

If we haven't got the cash for it, we don't need it.

[clevermanka.livejournal.com]

I didn't have the cash for my stitches, but I most definitely needed them.

There's no way I'm ever going to go 100% credit card free. I think it's awesome for people who can do that, but--I'm being honest with myself here--there's no way I will go totally without a credit card. I'm not willing to give up that safety cushion.

[rowangolightly.livejournal.com]

Understood. Everyone has their own way of doing things but with just having come out of bankruptcy and with Bruce having a great job, and with both of us sucking at financial discipline, this works for us.

[9thmoon.livejournal.com]

Wow, I'm so upset now that I could chew nails.

[clevermanka.livejournal.com]

Seriously. Our entire system, systems--all of it, from education to banking to health care--it's all just so fucked up.

[pamelonian.livejournal.com]

I go to a financial planner and they advise using cash to keep you more "in touch" with your money. When you use cash, it makes the purchase more "real." Not that I do that, mind you, because it is SO easy to swipe a debit card.

To think that someone is tracking all my bar tabs.... **shudder**

[clevermanka.livejournal.com]

LOL! The bar is the one place I always use cash, anyway!

[redheadfae.livejournal.com]

But then there's the Likker Store!

[http://users.livejournal.com/_mac_/]

My understanding is that having no credit cards can reflect negatively on your credit score, I'm wondering if having a credit card but not using it would also reflect negatively.

I think credit ratings and credit reporting agencies are the biggest racket ever, it seems to be a game that we are required to play though.

[rougewench.livejournal.com]

There are credit card companies canceling cards for non-use, if the non-use is over say, 3 years. The trick then is to use the cards one a year or so.


D.

[clevermanka.livejournal.com]

My understanding is that having no credit cards can reflect negatively on your credit score, I'm wondering if having a credit card but not using it would also reflect negatively.

It does lower your credit rating if you don't have a card at all. I'm not sure what having one and using it rarely will do. I guess I'll find out when I get my credit report next year.

And yeah, it's a total racket. Ugh.

[rougewench.livejournal.com]

They had a thing on this on NPR this morning (http://marketplace.publicradio.org/display/web/2009/07/01/am_redlining/).


D.

[redheadfae.livejournal.com]

I don't know how our usage counts. We do have the "do you want that run credit or debit?" cards, and I get cashback when I run my USAA debit "as credit." I also like that the merchants pay less of a % for me using it that way.

AFAIK, They can't cancel a debit card, so I'm not concerned all that much. I won't use credit cards, even if it does adversely affect my credit score on the whole principle of the damned things. That, and our impulsive/compulsive natures make operating on Only What Is In The Bank work best for us.

I haven't run anything on credit save for a car payment in over 10 years, although I've had to do payment plans on some medical bills. Trust me, they'll do it if you can't pay the full amount.

[clevermanka.livejournal.com]

I've had to do payment plans on some medical bills. Trust me, they'll do it if you can't pay the full amount.

I hadn't thought about that. A good thing to remember. Thanks!

[redheadfae.livejournal.com]

It's really pretty interesting how many businesses still will consider payment plans, if you ask.
Especially small, local ones :)

But yah.. too late now. You've already been tracked for years.. it's the reform of that tracking that's in the works. I can't see it happening any time soon, really.
Not as long as there are still those crappy "members" or "payback" shoppers cards.
I don't use shoppers cards that have my true information either. I always give a phony address and phone to the Dillons/etc monster cards.

[redheadfae.livejournal.com]

OH and this...
Credit card issuers have said people living in states hard hit by foreclosures, such as Florida, Nevada and California (referred to as the "sand states") may be considered increased risks by virtue of the fact that they live there.

A real pisser. It's flippin' well just like the fact that insurance rates are higher in states with no helmet laws, or a city with a higher population of college students.
We pay more for the people who live (shop) around us and not for our own habits. Grrr.

[kcalohagirl.livejournal.com]

I've been cash only for the past 7 years now.

I got myself in credit card trouble and never wanted it to happen again.

It works well for me.

[clevermanka.livejournal.com]

It's interesting to see how many people I know already operate this way!