Reasons why to use cash instead of credit cards?

Because with cash, no one but you is keeping track of your wallet. When you have a card, whoever wants to know how much you've got, they can hack on the Internet and see. The Government can also track down all of your purchases with a card. Cash is private while credit cards are not.

Cash How It Works You pay the merchant (or other provider of goods or services) in U.S. bills or coins. The merchant can immediately use the money for new transactions or deposit the cash at the bank. Major Pluses Cash is familiar and easy to get and use. Automated teller machines (ATMs) now make cash available 24 hours a day, seven days a week. And the basic consumer payment in cash is simple, involving no fees, cards, machines, security numbers, ID checks, or other time-consuming steps. "Cash usually is the cheapest way to go—no fees, no service charges, no interest payments," says Kathleen Nagle of the FDIC’s Division of Compliance and Consumer Affairs in Washington. One possible exception: If you use ATMs a lot, you may find yourself running up significant fees, especially if you’re not using your own institution’s machines. What else makes cash so popular? It’s accepted by other consumers as well as by all merchants, including businesses that won’t always take your check, credit card or debit card. You can’t get in debt using cash because it’s money you already have. And, if privacy is a concern, cash allows you to pay for something anonymously. Potential Problems Cash doesn’t provide the solid consumer protections that exist for other forms of payment. (See next section.) If you don’t keep good records and receipts, you won’t have a paper trail to help resolve disputes or help you track your spending for money management purposes. Bills and coins also can easily be lost or stolen. Consumer Protections With cash, there are no specific state, federal or industry protections if you pay for a product or service that turns out to be a dud. However, you may be protected by general laws in your state governing business and trade, according to FDIC attorney Patrick. "The fact that you paid in cash wouldn’t negate the applicability of laws against unfair trade practices," he says. Example: If you paid cash for a bad product and you’ve got a receipt, you might have a case under state law that there was a breach of contract or a breach of warranty. But even so, Patrick adds, "if you can’t resolve this on your own you might have to go to court," which can be costly, time-consuming and frustrating. You can’t stop payment (as with a check) or dispute payment (as with a credit card) if you run into a problem with the person or company that sold you the goods. That’s especially a problem with big-ticket items. More Words of Wisdom Always get and keep receipts, written warranties and other documentation. Without them, it’s your word against the merchant’s in a dispute, and those battles can be hard to win. Don’t depend on the merchant to get you the right backup records if there’s a question about a payment. "Under state law, if there’s a dispute between a buyer and a seller over a payment, the burden of proof is on the buyer, and not the other way around," says FDIC attorney Patrick. Don’t carry too much cash or leave it in your home or office, even if you find a nice hiding place for it. If you need more cash, you should be able to get it from a nearby ATM. Credit Cards How They Work Using a credit card is much like taking out a loan when you buy goods and services. When you present your card to a merchant, the cashier will electronically contact your card issuer (generally a bank or other financial institution) through the card network (Visa or MasterCard, for example) to verify your account number, expiration date and credit availability. If everything checks out, the card network will authorize the transaction. The merchant will collect the money from the card network, which will collect the money from your card issuer, which will bill you for the money in your next statement. There also are charge cards offered by retailers, oil companies and other corporations, primarily limited to purchases you make from them. Depending on your personal situation or the repayment terms of the card you carry, you’ll either pay your credit card bill in full each month and (usually) be charged no interest, or you’ll carry a balance on the card from one month to the next and pay interest on that debt. Major Pluses With credit cards, you can buy goods and services now and pay for them later—much later than with a check or debit card. That’s a big plus if you want to buy a big-ticket item (such as furniture or a computer) and you want to pay for it over time, even if it means interest charges. Credit cards are easy to use and are widely accepted—when buying in other cities and countries, on the Internet, through the mail or over the telephone. (They’re not accepted by individuals and some small businesses, however.) Credit cards also can be especially helpful in an emergency, such as paying for unexpected medical care and expensive auto repairs. In addition, card issuers often throw in freebies for using their card, including cash rebates, bonus points good toward airplane tickets, and even automatic extensions of manufacturer warranties. Among the other big pluses of credit cards: They offer excellent consumer protections. (See the next column.) You can consolidate multiple purchases into one monthly bill that you can pay with just one check. They’re less bulky and safer to carry than a wad of cash. (If you want more of the green stuff, you can even use your credit card to get a cash advance from a financial institution or an ATM, but this is a loan that also comes with a fee.) Credit cards also are easy to replace if lost or stolen, even if you’re far from home. The same can’t be said for cash or checks. Potential Problems Interest charges, fees and penalties can add up, especially if you don’t understand how your card works. "Too many consumers think that every bank gives them 20 or 30 days before charging interest, but that’s not the case with many banks today," warns the FDIC’s Nagle. Professor Garman of Virginia Tech adds that consumers who pay interest on credit card purchases forget that they are paying more money than if they used cash or a check. "After adding in the finance charges, which are typically 18 percent, you have the opposite of buying things on sale," he says. "It’s like marking up your purchases an additional 18 percent, if not more." Consumers who make only the minimum payment on their credit card bill also can add significantly to their interest charges. Consumer Protections Credit cards may offer your best legal remedies against billing errors, damaged merchandise and other woes that buyers encounter. The federal Truth in Lending Act (TILA) limits your losses to a maximum of $50 if your credit card is lost or stolen. The Fair Credit Billing Act (FCBA), part of the TILA, protects you against billing mistakes and unauthorized charges. It also allows you to withhold payment on defective goods until the problem has been corrected, provided certain conditions are met. (More details about the TILA.) The FCBA is a big reason why most experts advise consumers to use credit cards—not cash, checks or debit cards—when paying for big ticket items or services that you want to know will work as promised. More Words of Wisdom The credit card is one of the best innovations of the 20th century, but you have to be smart in how you use it. If at all possible, pay off your credit card balances each month so you can avoid or minimize interest charges. If you expect to carry a balance most months, consider using a card with a low Annual Percentage Rate (APR) and a grace period for new purchases before finance charges are imposed. And do your best to be aware of fees and service charges so you don’t trigger them by accident. Many people wonder if they should use their credit card to pay for small, everyday living expenses, such as gas or groceries. Here’s one possible approach: If you’re going to pay off your credit card bill each month and you can do so without incurring an interest payment, using your card for small purchases may be a convenient way to consolidate your payments. But if you’re unlikely to pay off your card balance each month, many experts say you’d be better off using cash, checks or debit cards, because those small purchases will cost significantly more once you add in the interest charges. Remember that there’s always the potential to become "overextended" with debt, from credit cards or any other loans. If you think you’ve got a debt problem, think twice before using your credit card, and find ways to spend less and save more. For more suggestions, see our money management tips. Also, do your part to prevent credit card fraud. Some simple precautions: Keep your card safe, and be sure to sign the back of the card as soon as it arrives.

There may be something of use here.

some places you can get discount, if you pay with cash. But you have to ask them. ------------------------------------- http://www.bestcreditrates.net

To begin with, people don't EVER get rich spending money, they build wealth by saving and investing money. When you begin to accumulate credit card debt (which is typically pretty expensive debt), you leave yourself open to the risk of default if anything happens, like a loss of job or an extended illness. As soon as you begin to pay late, the banks tack on late fees (typically around $30 a month), and they will raise your interest rates, sometimes with the first late payment. As your payment record starts to falter, your interest rates can skyrocket into the high 20's, and then your balance will grow each month instead of shrinking. Before you know it you're over your limit too, and that costs you another $30 a month. It is very, very easy to end up in over your head. All the while, the payments you are making on past purchases, means money not available to invest or save, or to even meet current needs. Unless you have a fair amount of extra cash each month to pay off your debt AND meet all your current needs and wants, you'll be tempted to keep acruing more debt. Now, here's the math problem you should go do, so you can see how powerful this can be: If you buy something for $2000 on credit, at 15%, compounded on an average daily balance (I'm not going to do your homework, so you'll need to look up how this is computed), and pay the required 4% of that balance per month as your "minimum" payment, how long does it take you to pay off that purchase, AND how much does it cost you in total (by the time you pay it off)? Now, if you put that 4%($80) of $2000 away each month to save for that purchase and put it in your paypal account which is currently paying 5% interest, how many months before you have that $2000? Now the third equation, if you invested that $2000 in a mutual fund that earns aproximately 11% per year (aprox the historical average rate of return for the S&P500), how much would your money be worth over the same time period? Everything in life involves a choice, but accumulating debt, save for a mortgage (which is leveraged debt) limits your choices in many ways. Very little of what we buy on credit needs to be bought TODAY. In most cases, a little planning will get you everything you want and need, plus a cushion for safety. And what is often missed, even by your parents, is that most of us aren't saving remotely enough to afford to ever retire. We will soon have a generation of baby boomers retiring in poverty.

My husband and I have both savings and checking & I feel dealing with cash on hand is a smarter way to go. My husband is Active Duty in the Military and gets 2 Dirrect Deposits mothly toour Checking account. When his paycheck comes in, I fist buy food for the house. Then I sort and pay our bills and with the amount lest over, we figure theamount we want to save on that payday and deposite it to the Savings account. Whatever amount is left, we prefure keeping that on hand to akes sure we think correctly...Meaning if you see your money in your hand it makes you actually think before any purchase..You look at the funds and see what that is going to leave you if you purchase that item (???) And think about is that what you really need? Or Really Want? Cause if you buy it, you are only gonna have left what is in your had. I think us (mainly women) shop with the "Plastic" and find at times we go over and then we have a Det of usually $30 per mess up, which does add up quickly, along with the amount of you purchase. I myself like knowing what exactly is going on with my money? And if what i am wanting to purchase is actually needed? Best of luck to you!

1. Credit cards carry high interest rates, especially if you don't plan on paying off the whole ENTIRE bill at the end of the month 2. If you were to ever get robbed, you'll have cash on hand, so it's safer. A robber wants cash, not a credit card. By the time they use it, you might have already cancelled it or reported it stolen, so they can get caught. 3. If you don't have the money to pay for something, it shouldn't be yours. Paying for things on credit cards is dangerous because it's like free money. People tend to overspend and when they see their bill later, they're like, "What the heck did I buy?" 4. Cash is best to use especially if you pay for small items everyday, like coffee, breakfast, lunch money. It annoys people in line if you swipe a card for a measley few dollars. 5. Identity theft. Everytime you use a credit card, you're at higher risk of having your card number get into the wrong hands. You can't record cash. Once you've paid in cash, you're done. 6. Receipts show part of your credit card number which thieves can easily find in the garbage. They'll put the numbers together or call the credit card company and try to pretend they're you. They already have your name and transaction history listed in detail on the receipt. 7. Many places offer discounts if you use cash. For instance, if you were to spend a few hundred dollars at a hardware store, you can ask for a discount if you pay now. They might take 10% off your total bill just for paying cash right away. This works for cars, home purchases, almost anything. 8. People that work at restaurants and nails salons, for instance, HATE getting tipped using a credit card. Their boss has to deduct a percentage off their tip to claim it. Cash can stay right in their pocket and the IRS will never find out. Hope this helps =) Good luck. Here's hoping for an A paper =)

When you carry a balance and pay interest it's the equivalent of paying more for the items.

You can't end up in debt from spending cash you have instead of money you don't.