Paper or Plastic? 3 Reasons to Use Cash and Cut Credit Cards

Have you checked your bank statement lately? 

credit cards vs cashIf you followed the news over the 2013 holiday season you have probably heard that millions of customers who used credit and/or debit cards may have had their personal information stolen because of a massive security breach at Target. When the news first broke, Target announced about 40 million accounts were potentially affected. Two weeks later, that number was up to 70 million customers, with the announcement that Neiman Marcus and three other stores might have been affected, as well.

I happened to be one of the shoppers affected by this scare because I used my debit card (for a $6 purchase! I just want to kick myself!). Fortunately, there’s been no shady activity – yet. From the reports I heard, underground companies have the numbers and are selling them around the world as hot commodities. I count my blessings and I pray for those who are about to go through the nightmare of putting their financial lives back in order. I also know more than ever that I will be wise to use cash a lot more often.

I don’t really use credit cards anymore, but even using a debit card has me edgy now. The Target breach got me thinking about other reasons why we might want to find more opportunities to put away the plastic in favor of the paper. Here are my top 3:

1. Cash Hinders the Hackers

Americans are using credit cards for everything from eating out, to a new pair of shoes and even something as small as a pack of gum. People just love their plastic! It’s convenient, I’ll admit that, but while most stores and businesses are using secure servers, and they assure us our account numbers and other personal information is in good hands, there are always “other hands” out there that are trying to get one step ahead of the security wall. The Target incident isn’t the first and it won’t be the last. Using cash can definitely avoid the potential of having your identity stolen by credit card thieves. If you have the opportunity, stop at the ATM and take out cash before you go to that restaurant, store, or the neighborhood hair salon. I know I will.

2. Cash Helps Dump the Debt

It was not too long ago that I was over my head in a financial mess. I am ashamed to say I once carried so many cards in my wallet that there weren’t enough slots to hold them all. A few were maxed out, some I held onto for those “just-in-case” moments, and I was the queen of the “0% for 6 months” offer. I was totally stressed out having to keeping track of the different offer expiration dates to make sure I didn’t go deeper into debt because of the finance charges. I was basically living off of “fake” money, in denial of the consequences. God humbled me quick, and showed me many signs. Signs I just ignored them for the most part, until I got invited to a class at my friend’s church. It was called Financial Peace University.

During that class this crazy dude named Dave Ramsey taught us that “cash is king”. I believed him because I was living a life on a financial tight rope, trying not to fall off the cliff. I knew I had to do something, so I rolled up my sleeves and started getting intense about my new vision for my money and my family’s security. It took me just under 2 years to finally pay down everything – nearly $33,000 worth – and boy was it hard! When I finally saw the light and began living on cash, things started to turn around. I remembered how awesome it felt just to breathe again and FINALLY learn how what it felt like not to owe anyone anything! It’s not rocket science – if you spend only what you have, you’ll stay out of debt in the first place. Cash helps us do that.

3. Cash Helps Balance the Budget

Once upon a time, I wrote down my spending, and called that my budget. I thought I was so organized! I tracked what came in and what went out, but it was all out of control. I was writing everything down AFTER I spent it and more often than not, I spent more than I brought in. I hated the end of the month when it came time to balancing everything out. Honestly, I really meant to write every credit card charge down as it happened, but after a few weeks, I would lose track or get lazy and just start estimating. Granted, I was a suddenly a single mom now with two family incomes suddenly dropped down to one, but I couldn’t hold on to that excuse forever. After all, lots of families out there lived on one income and I was determined to do it, too!

I had to take an honest look at how I was doing things. If you are struggling with balancing your budget, take a look at your practices. Do you tell your dollars where to go at the BEGINNING of the month? Or do you call it a “budget” when in actuality, it’s really an end-of-the-month tracker? Do you use credit cards and swear you’ll write it down when you get home, but somehow never get around to it? Do you spend more than you make because it’s just too easy to swipe a card at the checkout?  Managing your money instead of it managing you is much easier to do when you are counting “real” money (i.e. CASH), not I.O.U. money (i.e. my “fake” credit card money). I used everything from envelopes to jars to separate bank accounts, until I found a system that worked for me. The key to my success has been cash all the way. Heck, maybe congress should try it!

A Final Note on Marketing

An interesting, but not surprising study in 2012 revealed that shoppers who used a credit card focused on the benefits of the purchase and those who paid cash focused on the cost. They concluded that there is more emotion attached to the purchase when we have to part with our cold hard cash, as opposed to a quick swipe in a machine. Do you think it was coincidence that the average sale at the McDonald’s counter jumped from $4.70 to $7 when they gave customers the ability to pay with plastic? Be careful, people! Most of us are a marketer’s dream. We like the fastest, easiest way possible to get what we want, whether that means compromising our values, our privacy, and sometimes even our identity. There are even apps that we can use now that bypass the card altogether, just taking the money directly from our accounts! For me, I work too hard to give any unintended dollars away, unless it is on MY terms. My family depends on that. My kids’ future depends on that.

Proverbs 22:7 says the borrower is a slave to the lender. Living in debt, even so-called “managed” debt where you pay down everything each month, is still living a life where you owe people money. I know, living on cash is just not considered “normal” these days, but why be normal when you could live on less than you make and have the financial freedom that comes with ditching the credit cards? Try it. I promise you’ll have fewer sleepless nights worrying about potential Target hackers or anyone else stealing your identity, your privacy, or your legacy to your children.

Do you have a debt-free story or a struggle you’ve been going through?
Leave a comment and share!


In this thing with you, to your success and beyond,


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