Could You Survive Without a Credit Card?
•You’ll spend less. Kit Yarrow is a professor of psychology and marketing at Golden Gate University. She says using plastic makes you focus on what you’re getting – not what you’re spending. In fact, since you’re not handing over actual cash, it doesn’t feel like you’re spending money at all. That’s why people spend about 30% LESS when they pay with cash.
•You’ll probably also save more. Prices are more negotiable when you flash cash at a salesperson. That’s because merchants pay thousands of dollars in credit card transaction fees - and those fees are usually built-in to a product’s price. When you offer to pay cash, you’re basically offering the store a way to save money. So they’ll be more willing to cut a deal with you.
•Another good reason to give up plastic: You’ll be happier, because you won’t have the stress associated with credit card bills, late fees, or high interest rates. In fact, 21% of people say debt and finances are their #1 cause of stress.
So here’s the bad side of giving up your credit cards:
•Renting a car is more of a hassle. Most rental car companies do accept debit cards, but if you don’t use credit, a lot of them will place a hold on your available funds – up to thousands of dollars.
•It’s also harder to pay cash only for a house. That’s because people who don’t use credit cards tend to have lower credit scores. So you have to show proof of income and financial stability. You might need someone to co-sign your loan. One 40-year-old man we read about had worked for 20 years, and had zero debt – but couldn’t get a mortgage, and had to get his mom to co-sign the loan.
