These days a lot of people don’t even carry cash on them anymore thanks to the nifty invention of the credit card and debit card. As convenient as it is to just a small piece of plastic instead of a wallet/purse full of cash, it is actually costing you money in more ways than one. Sure there is the obvious cost of interest that’s killing you when it comes to using your credit card, not to mention recent debit card fees that are charging you up to $5 monthly to use it.
What is the other way these convenient little plastic cards are costing you? Recent studies show that people may spend up to 50% more on fast food and other purchases when paying with debit or credit cards. Why is this? It’s simple really, and we can all relate, parting with cash hurts us more. So when it comes to paying for something and all you have is cash, you are more likely to go the cheap route. Mainly because handing over a piece of plastic is a lot easier than handing over cold hard cash.
This leads to another way to save, don’t use a credit card. I’m sure you’ve heard this from every angle, but credit cards are truly evil. Stick to cash, and if you must, a debit card, because at least with a debit card it is cash that you have right now. Using a credit card is risky, especially during these hard times when job security is basically non existent. You can’t get it in your head that “This item is $500 that I don’t have now, but I will have the money to pay for it next month”, because there is no 100% guarantee that you will have it. Sure you can make minimum payments, but then you’re screwing yourself with interest fees.
The Breakdown: Avoid making purchases with debit cards, and at all costs, credit cards. Paying with cash is proven to help you save, and as studies show, save you up to 50%. So if you make, lets say, $50 (which, lets face it, it’s probably more) in purchases per week with your credit/debit card. You could possibly cut that down to $25 a week if you were paying with cash. So you go from spending $2600 a year on random purchases, to $1300. That’s a savings of $1300 a year, $108 a month, or about $25 a week.