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Tackling Debt: Use Cash, Not Plastic

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NY Money Minute

NY Money Minute


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What's in your wallet? Make it cash, not plastic.

To be fair, plastic is much sexier than a piece of colored paper with a president staring vaguely into the distance. 
And yet, from a personal finance view, cash is almost always the better choice for making a purchase. Here's why:

1. Overpaying  One of the drawbacks of credit and debit cards is that they encourage you to spend more than you intend to by giving you easy access to more capital. 

2. Over-Shopping   According to Soundmoneytips.com, people will spend more with a credit card compared to cash. In fact, a study found that people spend 12-18% more when using credit cards than when using cash.  And McDonald's found that the average transaction rose from $4.50 to $7 when customers used plastic instead of cash.
For most people it becomes a matter of $2 here, $6 there, another $4 over here and so on until they give up keeping track of how much has been spent in a day - let alone a month. Then it's a shock when the monthly statement comes in. 

Get your guide to financial health: How Money Works. This essential guide will explain the life insurance traps, the debt traps, the mortgage traps, the tax traps so that you can build a secure financial house. And sleep better. 

Go to bitly.com/yourmoneyny and sign up for your copy of How Money Works, that's bitly.com/yourmoneyny  Also, This Thursday, August 7 is our next Money Workshop Securing Your Financial House, at the Point Cafe in Schenectady. 964 Heldeberg Ave. RSVP to dbalog99@gmail.com