Credit Cards: Swipe Your Life Away – Convenience over Cash

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Do you remember when cashiers would ask “cash or credit?”  Those days are long gone.   Consumers have traded cash for convenience.  Unfortunately, convenience comes at a price.  It is consumer debt.  It is very difficult to control our spending when we merely swipe our credit card for any and every purchase without ever stopping to realize the impact that each charge has on our overall personal finances.

The convenience of a credit card does not illustrate the actual exchange of our money for our purchases.   Think about this the next time you receive your credit card statement.   Take a look through your credit card statement and review each charge on your statement.  Ask yourself, if you would have made the same decision if you had to pay cash for every transaction on your statement?

If the answer is no, then think about why did you make the decision to purchase something when you did not have the cash to pay for the transaction?  Convenience?   As I stated above, it is the convenience of a credit card that encourages excessive spending.

Over time this excessive spending creates outstanding balances on our credit cards that cannot be paid in full every month.  As a result, we end up paying thousands of dollars in interest charges that dramatically inflate the cost of our original purchases.    In addition, the money that is consumed by our debt keeps us from funding our savings and investments goals.

The good news is we can work on improving our spending habits by simply reverting to paying cash for all of our purchases.  If we have to use our hard earned cash to pay for our purchases, it provides us with a very real illustration of how much money we are actually spending on a monthly basis.   I am confident all of us will make different decisions if we limit our spending to cash only purchases.    There is an awareness that occurs when we have to make a conscious choice to take cash from our wallets, count it and pay for our purchases.  Cash is a limited resource that must be managed to ensure we have enough money to last until our next paycheck.  As a result, this awareness surrounding each purchasing decision will start to improve our financial habits.  It also provides us a new perspective on how we spend our hard earned money if we have to pay cash.  I hope this article inspires you to start living with the time-tested motto “Cash is King.”

If you have enjoyed this article please take the time to read some of other articles on a variety of personal finance topics.

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