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teachingmom
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CrunchyMom wrote:
QUOTE]
There are studies that have shown that statistically people spend a lot more (I want to say 10-20%, can't remember) using a credit card than they do using cash.
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Now that is interesting. You mean it somehow hurts more to hand over the hard green cash than to hand over that little piece of plastic?  I could see that being somewhat true, even for those of us who are very frugal.
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Molly Smith
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teachingmom wrote:
| Why in the world would credit cards be bad if you pay them off in full every month as we have always done? They are a huge convenience, have no fees attached, and ours give fairly generous rewards. |
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I will say that we pay off our credit cards every month, and my dh uses one for business that he pays off every month, and we have something like $500 coming to us in Target gift cards that we bought using rewards.
That said, I hate the credit cards and am trying to go strictly to debit. It's too easy to forget about things you bought, even if they were necessities, and my record-keeping is such that I'm often surprised by the bill. When I use the debit, I just come home and input the receipt into Quicken and can see how it fits in the budget. Of course, I have the credit cards set up in Quicken and could also input those receipts, it's just one more thing to do and I end up not doing it, hence the surprise on the bills. Also, with my budget, I do better if I pay for the item in the same month that it is purchased. For example, if I buy clothes in December, I want the money to be reflected in my December budget numbers, not in January when the credit card bill comes. Just a personal hangup...
I recently read America's Cheapest Family and set up my budget for 2009. I want to keep the purchase and payment in the same month for ease of record-keeping. I love math, but I'm not an accountant and I must keep it simple. I also want my dh to be able to quickly see what is left in a particular budget category. Sorry, way going off topic...
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ctrivette
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Just a note about having a card that you keep for emergencies but don't use...we just yesterday got a letter about a card that we haven't used in a year? maybe more? telling me the card has been canceled since we don't use it. I don't need (or really want) that card so it is fine, but if you are trying to have one available for potential emergencies, you may want to use it once in a while. Now that the credit crunch has trickled down to even small limit credit cards, I think there is going to be even more of this happening.
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cvbmom
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I'm not against cash only, though I think one should keep a credit card handy for emergency use. We have a credit card that pays 1-4% back on purchases, so we use it for certain things, such as gas (so I don't have to go in and leave the kids in the car) or online purchases. We always pay off the credit card bill at the end of the month, never leaving a balance. We just use credit for the convenience.
As for debit cards, I have heard Clark Howard (www.clarkhoward.com) speak against debit cards, though. He makes a lot of sense. Just go to the site and search on "debit cards."
God bless,
Christine
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SusanJ
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We have always had a credit card. We pay for absolutely everything with it because we get rewards with it. I pay the bill weekly online and we've never carried a balance for even one month. I have family who really abuse their cards and are in big financial trouble. It's so sad.
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Bookswithtea
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SusanJ wrote:
| We have always had a credit card. We pay for absolutely everything with it because we get rewards with it. I pay the bill weekly online and we've never carried a balance for even one month. I have family who really abuse their cards and are in big financial trouble. It's so sad. |
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Hmmmmmmmmm...we just this year discovered that the rewards can be quite substantial. We have talked about using our cards (emergency normally) for everything and then paying it off each month. You have found that this works well for you? I do worry about that 10-20% more aspect. For instance, because we pay cash for gas, we put in just what we can afford. I am afraid it would be too easy to fill the tank every time if we used credit! 
On another note, Rewards are also available on debit cards, but you have to run them as a credit transaction (sign for your purchase instead of inputing a pin #). Check with your bank to see if they offer it. The money still comes out of the same place but apparently it makes a difference to the bank how its processed. Weird.
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Bookswithtea
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Molly Smith wrote:
I recently read America's Cheapest Family and set up my budget for 2009... |
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I just recently heard about this book. How did you like it?
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mothering ds'93 dd'97 dd'99 dd'02 ds'05 ds'07 and due 9/10
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CrunchyMom
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Dave Ramsey cites 12-18%--just want to verify my guess.
When I searched this I found this NPR story where the interviewer cites the fact that the average amount spent at McDonalds jumped from 4.50 to 7.00 when they installed credit/debit machines! That's huge!
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Bookswithtea
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CrunchyMom wrote:
Dave Ramsey cites 12-18%--just want to verify my guess.
When I searched this I found this NPR story where the interviewer cites the fact that the average amount spent at McDonalds jumped from 4.50 to 7.00 when they installed credit/debit machines! That's huge! |
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yeah, i have no problems believing that. 99C menu on cash, but combos with debit! 
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mothering ds'93 dd'97 dd'99 dd'02 ds'05 ds'07 and due 9/10
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PDyer
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CrunchyMom wrote:
Dave Ramsey cites 12-18%--just want to verify my guess.
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I've heard this, but since we pay the balance every month without fail we can't be overspending significantly, so the idea of changing to all cash seems very overwhelming for little payback. And I like my Amazon.com certificates. 
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Patty
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stefoodie
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PDyer wrote:
| And I like my Amazon.com certificates. |
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Another HOORAY for those. The "paying it off every month" works well for us too.
What I haven't worked out yet (after ~19 years of marriage) are the sudden things that happen -- somehow the expenses are almost always MORE than what you budgeted for: the dental bill that you save for months ahead but then turns out to be $200 more, the car repair that you were saving $50 a month for if and when it's necessary, and then it's twice what you were expecting, just things that crop up in the regular maintenance of materials and of people  ...
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PDyer
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stefoodie wrote:
| What I haven't worked out yet (after ~19 years of marriage) are the sudden things that happen -- somehow the expenses are almost always MORE than what you budgeted for: the dental bill that you save for months ahead but then turns out to be $200 more, the car repair that you were saving $50 a month for if and when it's necessary, and then it's twice what you were expecting, just things that crop up in the regular maintenance of materials and of people ... |
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These are part of the reason we don't have a formal budget. I wonder sometimes if we are really blowing it because we don't analyze our spending that deeply anymore. When we did, we always had a reason why one category was over budget and another under, but it all worked out in the end. And this from a couple of accountants. I go around and around about stewardship in my head...
Eidting to add now I'm completely embarrassed...
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SusanJ
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You know, we don't have a formal budget, either. This was a huge struggle in our marriage for years and I finally gave in. Dh is completely opposed to budgeting. I'm sure that sounds completely insane to a lot of you. We do track expenses meticulously and review them together each month. We have a brief conversation like, "Wow, groceries were high. Is there a good reason for that?" Usually the answer is something like, "Yeah, we bought a side of beef that month to last us a whole year."
I call our system the "virtue-based" approach to spending. Not to suggest that having a budget is less virtuous or anything but we just consider each purchase and whether or not it is really necessary. Somehow we don't run out of money. I think we live pretty frugally and our income has been below the poverty line for our entire marriage (dh was a student until last May). I don't know how it all works but it does. I chalk it up to faithfully tithing each month.
So, we never blow our budget with credit card purchases because we don't have a budget and we put the same consideration into cc purchases as we would into cash or check purchases. We do so much online shopping and those rewards really add up. We're going to be able to do all our Christmas shopping with some left over just from Amazon rewards this fall. It is interesting to consider whether we still would spend 15% less if we only used cash but it seems like the savings from online deals and rewards would negate the cash savings--if indeed we even would save by using cash. I wonder if paying our card weekly helps? I see a record of each week's expenditures every Monday morning and can keep an eye on things.
Susan
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CrunchyMom
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Susan, I would think that meticulously tracking purchases as you do makes your situation quite different from the average person who "doesn't have a budget." Most of the time, the problem with not budgeting is not knowing where the money went or having no clue that all those coffees add up to a pretty hefty amount and then fretting about how to pay the mortgage or put gas in your car (which just goes on the card for many).
It sounds like you have things categorized as well (since you do know how much you spent on groceries even though you didn't have a set amount prior to spending it).
Plus, you say you tithe faithfully. Well, whatever percentage you always take out, that's essentially "budgeted." There are bills you always pay, right? Rent, insurance, etc... Those things are essentially budgeted, too.
Anyway, I think you are the exception rather than the rule.
Like any statistic, if the average is "12-18%" I'm sure some people are considerable below that and others above.
We stopped doing cash only out of laziness. It is a hassle to get to the bank, keep all the envelopes straight, and I am such a flake, it made me nervous carrying all that cash around for fear of losing my wallet. However, I was a lot more aware of where money had gone and how much I'd spent.
Plus, I'll admit to loving those Amazon points I got to spend last month
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teachingmom
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CrunchyMom wrote:
| Plus, I'll admit to loving those Amazon points I got to spend last month |
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I am another one who runs almost everything through a credit card to get rebates. I usually use my Costco American Express to get cash back, but we also have a Visa that accrues points that can be redeemed for gift certificates to stores like Amazon. I was disappointed the other day to realize that I think they raised the number of points needed in order to get a $50 Amazon gift certificate. 
Can you all tell me what kind of card you use to get your Amazon points and how the dollars-charged versus points-earned work for your card?
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teachingmom
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Bookswithtea wrote:
CrunchyMom wrote:
Dave Ramsey cites 12-18%--just want to verify my guess.
When I searched this I found this NPR story where the interviewer cites the fact that the average amount spent at McDonalds jumped from 4.50 to 7.00 when they installed credit/debit machines! That's huge! |
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yeah, i have no problems believing that. 99C menu on cash, but combos with debit! |
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Well, I have to be honest and say that our use of McDonald's meals for convenience went up when they started accepting credit cards.
A funny aside about McDonalds . . . Joe works with someone who has a roommate who volunteered on the Obama campaign. His coworker was given some McDonalds gift cards leftover from feeding the volunteers during the campaign and passed a few on to us. We received two cards with over $80 on each!
We are not Obama fans, but we get a kick out periodically saying, "Dinner is on Obama, kids!"
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stefoodie
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I can't sleep so I thought I might as well peek in here.
Quote:
| Can you all tell me what kind of card you use to get your Amazon points and how the dollars-charged versus points-earned work for your card? |
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Actually I don't get much, it's 1 amazon $ for every $100 I spend with the card -- so I only get a $25 certificate everytime I spend $2500. But since we put everything on it that will be paid off anyway -- doctors' bills, groceries, gas, homeschooling materials, it's always nice to get a little something back even if other stores give you more (TJ Maxx for example gives you $10 -- on a TJMaxx gift card -- for every $200 you spend using their card) -- but since I don't really use the Amazon card just to get cash back, then it's like a little surprise that just comes when it comes.
I'm sure I could do better but haven't really had much time to research lately on cashbacks/rewards, etc.
We used to put everything on a World Perks card and got to go on a couple of trips (hotel and airline tickets included) on the mileage we earned over the years -- those were nice bonuses... but that was when we had 2 kids -- it would take us more than a lifetime now to earn that much mileage (for 7 people to travel all-expenses paid), plus they've changed the rules  a few times.
An acquaintance (who can afford it, obviously) once paid for his car ENTIRELY with his American Express card just to get airline mileage -- he had saved up for the car and had the cash to pay the bill off right away, but he wanted to get the free miles. I thought that was pretty smart of him. Don't know if that's still allowed, this was >10 years ago.
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stef
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stefoodie
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teachingmom wrote:
| "Dinner is on Obama, kids!" |
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stef
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Molly Smith
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Bookswithtea wrote:
Molly Smith wrote:
I recently read America's Cheapest Family and set up my budget for 2009... |
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I just recently heard about this book. How did you like it? |
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I thought it was great and I'm very happy to have a budget set up for '09 according to their model. I found it at our library. Everything they said was simple, easy to implement and just made sense. For me, a budget is very freeing. I don't work well with just trying not to spend more than we make, and hoping that too much doesn't come up in a single month. I long ago budgeted our fixed expenses, set up a separate bank account to pay them from and transfer that amount to the second account after our mid-month paycheck. What's left is "discretionary", but really, it's not at all: donations, groceries, clothing, gas, etc. It's more that those areas have wiggle room where the fixed expenses do not. Maybe we should start a budgeting thread...
Yesterday, I received $390 in rewards gift cards from Target and $50 from Amazon  . BUT, to be honest, I know that I do spend more when I use my credit cards so I have no idea if it was really a deal or not. I'm disciplined with paying bills on time, just possibly not as disciplined with purchases. And we did start going to McD's more when they started taking credit. Those little things can add up.
I am going to keep my credit cards. I have two and will possibly designate each to a particular budget category. That way they get used, paid on time and help my credit rating.
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PDyer
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teachingmom wrote:
| Can you all tell me what kind of card you use to get your Amazon points and how the dollars-charged versus points-earned work for your card? |
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We have a VISA issued by the same bank where we have our checking account. The reward program is VISA Extras. The reward program was offered to us when we moved and opened our new accounts, and I'm embarrassed to say that's all the investigating we've done on the issue.
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Patty
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4Real Forums : Tea and Conversation
Topic: Does anyone live without a credit card?
