DELICIOUS
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REDDITThe mentalities of spending have been changing over the past year based off the recession and lack of job security. People are budgeting more and studies show that more attention is being put on savings now. One of the areas that has seen less usage is in credit cards. With high interest rates and credit card debt piling up among many Americans, the “I’ll pay later and charge it” mentality is switching.
It’s switching to the “I’ll pay now because it helps me manage my money better” debit mentality. Debit transactions allow a person to track their money better. It’s like paying with cash except actually having to have the cash in hand, something a lot of people feel is unsafe and they are uncomfortable with.
Paying with a credit card forces you to pay more attention to your finances because it is directly being taken out of your account right away. This is a great approach to more routine purchases like gas, groceries that you need without worrying about always having cash on hand. I use this approach all the time then when I get home, take the receipt and add the transaction into my account in my personal budgeting software. I also go onto my bank’s site to make sure the transaction went through properly. When I use a credit card, I always forget about the purchase and the expenses add up too easily. With larger purchases I use credit but for the most part I try to always pay with debit.
What do you prefer to pay with?
In the third paragraph, is the first reference to credit card actually a reference to using a debit card? Thanks so much for this good article.
I use both debit and credit cards and carefully track them with both computer software (BudgetPulse) and a hand-written record. I never use a debit card at a fuel station because some stations will run a test charge through that can be equal to the amount I purchased. Since that test charge won’t “drop off” for a few days, it can adversely affect the amount of money available in one’s checking account. I pay my credit cards off in full each month. Usually I will transfer the amount due from my checking account to the credit card every week or so. Often there is a zero balance on my credit card statement when it posts. Since I have a cash back credit card, I “earn” a nice amount every year.
@Mary I apologize you are correct the third paragraph is in reference of debit cards. I agree, I actually use debit cards at gas stations but have had the test charge a few times and the charge took a few days to go into affect, making keeping track more difficult. Also with credit, a lot of cards give 2-3% back on gas charges.
Craig: Did you have to change your vacation plans? I certainly hope not. After all the work you do on BudgetPulse, you deserve some time off.
Hey! Great blog, I found it from a Twitter post in my network. I agree, debit cards all the way. You are on point when you say it helps you manage your money better and develops discipline, which is necessary for financial freedom!
-Dorethia
@Marj I did not, I just got back from my trip to the jungle and the adventure was amazing. Thank you for all the kind words.
@Dorethia Thanks for the kind words about the blog. Using debit cards really does force you to become more discipline with spending. I look forward to seeing you around more.