Are You Pay with Cash or Credit Cards?

Some people hate credit card, and I understand and sympathize!  When your credit debt is too high, it’s like walking around with some type of huge invisible 50 pound parasite attached to your neck.  So for this group credit cards should not be used!

To help identify which to use (credit or cash), I’m am going to write two “at a glance” decision lists:

When to use Cash only list:

• You are carrying a credit card balance that you don’t pay off every month, and that balance is greater that $500.
• You are shopaholic (not sure if you are?  Click here to take the test)
• You are saving for a house down payment.  (You don’t want the loan officer to see you are deep in debt)
• You are an impulsive buyer.
• You are in deep debt (non-mortgage debt…).

When to take advantage of use Credit cards:

• You always pay off your balance(s) every month
• You are debt-free (excluding your mortgage)
• You have great financial willpower and judgement.
• You are automatically contributing savings to a retirement account of some sort.
• You have reward credit cards, with no annual fee.
• You like getting a discount of a few percentage point on every purchase by using the reward credit card mentioned above.

So, whether to pay for things using cash or credit card depends on two primary facts:

1. You are not in credit card debt already.
2. You have a high degree of financial savvy.  Meaning that you have great money management skills.  If you don’t have excellent money management skills, consider reading my news feed:  MoneyReasons RSS.

Readers, are you a cash or credit cards guy or gal?

One of my goals at this site is to demonstrate some of the frugal and wise money management techniques that I use in my daily life, so other may see that it’s possible to get ahead on an average salary.

Regards,

- MR