“I have never paid with a credit card in a store in my life.”

One of our readers here just commented that on an article of ours!! WOWWWWW… Can you imagine? NEVER using a credit card ever? It’s like spotting the elusive Unicorn or Big Foot! Or better yet, my favorite creature in the whole wide world – the Mermaid! Haha…

Here’s the full quote that was dropped:

“I live in Europe and paying in cash is much more common here. I have never paid with a credit card in a store in my life. If I want something or need something I pay in cash whenever possible. Otherwise I use my debit card.”

At first I was pretty impressed cuz I quickly thought “I bet that person saves a TON not using a credit card!” (after the shock wore off, of course), but as I got my wits about me I realized that’s not necessarily true. In fact, it BETTER NOT be true or else I’m wasting away money using credit every single day/week/month/year! Haha… But I DO like that she has to *budget* for stuff as the option of taking on debt to get something is out of the question. That’s the KEY takeaway point right there: You only spend what you have!

It did stop me in my tracks though, and got me to reevaluate my own payment strategies I’ve got going on. Particularly with my budgeting style of putting everything on credit cards to simplify and get those cash back rewards, etc – something that’s not necessarily offered when paying with a debit or cold hard cash.

Here were the pros and cons I went over again in my head just to make sure I’m still happy with things (which I am, btw, for what it’s worth):

Pros to credit cards vs. cash:

  • Easy peasy spending with a swipe of a card
  • Lots of cash back and/or other sexy rewards
  • Higher limits of spending vs what’s physically in your accounts
  • Easy to budget with if you put everything on ONE card (and simpler)
  • Lots of security in place in case it gets stolen, lost, hacked. Particularly charges wiped away from day #1 whereas with cash/debit it takes much much longer… depending on what type of card/company you use and when you report it, etc etc. (well, not with cash – that goes bye-bye the second it’s gone!)

Cons to credit cards vs. cash:

  • Higher chances of spending more (at least that’s what the “pros” say)
  • Higher chances of not paying stuff off in time – or ever.
  • Higher fees/penalties if you make a boo boo and/or carry balances over
  • Not every place/person accepts credit cards, so you ALWAYS need to carry cash anyways just in case… As debit cards won’t work either in those cases.

I think that’s about it? Overall I do tend to think those who use credit cards spend more in the long run for stuff, but how much we’re talking depends on the user and their own habits/personality. Some people can handle those cards like a champ (I’d like to put myself into that category, if I may ;)), while others would dig themselves into such big holes that they shouldn’t even apply for a card to begin with. Like those coming out of high school or college/etc when it all seems like “free money” to them (or was that just ME back then? Haha…)

Regardless, I find it all kinds of fascinating that there are still people out there who have never owned, nor used, a credit card before. Like our new friend who left that awesome comment up there above… It sure gets you to stop for a second and contemplate your own methods! And makes me wonder how people view this type of stuff in other countries vs. the U.S. too – where we’re known for overspending and gorging ourselves with lots of “stuff.”

Actually, that’s a great question for some of you all out there:What’s the word on credit card usage in YOUR country? And for those who ARE a fellow member of our United States, do you think you could ever stop using plastic if you tried? Or would the chance of saving more not outweigh your current credit card usage anyways? Like how it doesn’t for me?

I wanna see how different your views are on this today… I’d say I’d give the “all cash” test a try for a month or two and report back, but I’ve already said that 3 times in the course of my 5 years here and I wouldn’t want to lie to you again ;) So tell me about your experiences instead!!

[Brilliant photo by carlos.a.martinez]

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  1. julien January 22, 2013 at 6:09 AM

    In Germany cash is king, you can pay huge amounts in euros without anyone blinking…
    As for cards, people get debit card by default.
    In Belgium, shop prefer to get everything by debit card even for a couple of euros.
    The most unusual is France, by default most cards are credit cards, but the balance is paid automatically as long as you have enough cash on your account.

    I’m using my debit card 99% of the time and the credit card only for buying travel tickets (since it provide a travel insurance) or when I’m abroad (out of Europe SEPA zone)
    The reason being that I can import all my bank statements in one of my bank website and get most of the expenses automatically classified (with pre-defined & custom rules);
    That make my budgeting very very easy… And every few months I’m generating a report about all expenses split by budget line

    1. J. Money January 22, 2013 at 12:41 PM

      That works too :) Weird about France having cards paid off in full like that? I mean, it’s probably a GOOD thing in the end, but you def. loose the flexibility there if that’s what’s important to you… Thanks for the info!

  2. Leah January 22, 2013 at 6:25 AM

    I just talked a little about this on my blog yesterday! Between 0% interest debt and wanting to max out rewards points on my credit cards, I’ve killed my credit score by upping my credit utilization sky high. I’m trying a credit card diet for a bit to get my credit utilization down a bit.

    1. Leah January 22, 2013 at 7:14 AM

      I guess I failed to mention here that I carry balances on my 0% interest debt to improve monthly cash flow, and I tend to use credit cards exclusively (i.e. no cash) to get rewards points. In my new debt diet, I’ll use cash exclusively (and let you know if anything AMAZING happens ;)

      HOWEVER, I still believe in using credit cards. After I pay down the majority of my interest free debt, I’ll go back to purchasing stuff on my card and paying it off every month. A long, smart, paid-off credit history can open a lot of doors!

      1. J. Money January 22, 2013 at 12:43 PM

        Haha… I actually have all my cards with crazy HIGH credit limits too! Although since I never have any balances carry over, the utilization % is stupidly low. Like, I went from cards w/ $5k limits up to $30k just to *help* w/ my credit score ;) So your idea can def. work just so long as there’s not much of a balance carrying over each month.

  3. Jennifer January 22, 2013 at 6:26 AM

    My husband and I got married 11/5/11 and decided to start working together to kick our student loans and car loan to the curb. We were both working and used credit cards frequently but paid them off each month putting all of my salary into debt payoff and using his for living expenses. I quit my job April 2012 but we didn’t want to lose our momentum on Operation Debt Freedom. I had mentioned my interest in trying cash budgeting to see if we spent less when we gave up using cards so much. By summer 2012 he was ready to try it! We went one month and were hooked. I think credit cards have only been used maybe four times at all since we started cash budgeting. We’ve even been able to pay off more debt consistently each month than we were as a two income family using cards all the time! We use cash for groceries, eating out, personal funds, gas, home improvement, and miscellaneous. All the rest is by check or automatic withdrawal. We even have a newborn baby and still are going strong with the cash budget. At the rate we’re going, our last $38,000 in grad school loans and car loan remainder should be gone by September 2013, two months before our second anniversary!

    1. J. Money January 22, 2013 at 12:45 PM

      NICE!!! I’m so glad it worked for you guys! And you can still be ok with all the hassle cash brings, haha… I want a report come September, okay? We’ll throw an online party for you ;)

  4. Lance @ Money Life and More January 22, 2013 at 7:16 AM

    J, you definitely know my view on all this credit card stuff! Cash and credit are the same to me and I don’t spent more with credit than I would with cash. In fact, I’d be willing to say I’d spend more with cash than credit! I’ve never paid a fee or carried a balance and I make some decent money off rewards and sign up bonuses. In fact, I made almost $1,000 in sign up bonuses and rewards in 2012 off of credit cards.

    Could I switch to cash if I had to? You bet, it’d suck though!

  5. Holly@ClubThrifty January 22, 2013 at 7:20 AM

    I hate cash. I rarely have a dollar in my wallet. I use various rewards cards for every single purchase, even if I just buy a pack of gum!

    1. J. Money January 22, 2013 at 12:46 PM

      Aren’t you afraid of getting stuck somewhere where cards don’t do squat?? I’d be scared if my wife never carried around money… Even when she has used up all her cash I always feel better knowing there’s a hidden $20 on her at all times just in case.

      1. Holly@ClubThrifty January 28, 2013 at 1:09 PM

        No, I never have cash. I have never had any problems. I could always go to an ATM if I needed to.

  6. Stephanie January 22, 2013 at 7:26 AM

    Yeah, I don’t think I could do it. I’d actually spend more if I used cash only, but I have a pretty strict rule of not putting more on a credit card than I can pay off at the end of the month. Once in a great while I will strategically carry a balance from one month to another, or take advantage of a 0% financing offer (hey, anything that keeps that money earning interest in the bank for longer, however little it may be!), but the rewards I’ve earned are much more than what little interest I’ve ever paid.

    But I’m one of those weirdos who probably spends less using a credit or debit card since I feel the need to account for every penny spent, so in addition to “Can I afford it?” I ask “Do I *really* want to save this receipt and record it in my checkbook and/or spreadsheet?” I’m pretty sure this puts me in the minority, and MOST people in the US would do better to cut up their cards and use cash only, but I’ll stick to my strategy of putting any online and/or large (planned!) purchases that I can pay off on my main credit card, and take full advantage of discounts offered by stores where I shop frequently.

    1. J. Money January 22, 2013 at 12:47 PM

      Haha…. I like your “receipt” rule there – the hassle of keeping it all & tracking can DEF change your mind on certain purchases!

  7. Mrs. Pop @ Planting Our Pennies January 22, 2013 at 7:35 AM

    In our house, cash evaporates and we have to guess where it went – and that’s not how we like to roll.

  8. Cora January 22, 2013 at 7:39 AM

    I live in Europe too, and in some stores you can’t even pay with credit card. I pay cash, or use my debit card. I do have a credit card for online shopping and for when I’m travelling, but I pay my card off every month. No interest, but also no extra’s, like you seem to get in the US.

    1. J. Money January 22, 2013 at 12:48 PM

      Man, a store w/out an option to pay w/ credit would be unheard of over here in the U.S… So interesting how different our countries can be at times :)

  9. Mike @ Personal Finance Beat January 22, 2013 at 8:02 AM

    You’re throwing money away (cash back) if you DON’T use a credit card. Bedsides the rewards, it also helps me keep my spending categorized & organized, as every transaction is uploaded to Mint. Another reason I use a credit card is that it’s safer — and offers more protection — than debit cards.

    So long as you can control your spending and pay off the balance in full every month, there’s really no reason not to use one.

  10. Pauline January 22, 2013 at 8:04 AM

    I grew up in France and like Julien said what we call credit cards are debit cards with an overdraft authorization on a current account, and we are rarely overdrawn. I think I got my first credit card at 28 when I moved to the UK.
    Now I live in Guatemala and outside of the capital city you can only pay cash except a few businesses, and I quite enjoy it, it is better for money management.

    1. J. Money January 22, 2013 at 12:49 PM

      You’re reading my blog from Guatemala?? COOL!!! They don’t like credit cards but they sure do the internet! haha…

  11. Chinabecky January 22, 2013 at 8:16 AM

    I’m an American who has been living and working in china for almost 4 years. Here in china cash is king too. In fact, it is EXTREMLY difficult for anyone to get a credit card (you have to pay a lot of $ and it takes a lot of time and hassle.) I’ve had some chinese people ask to use my American credit card when they needed to pay a deposit on an overseas school or something because cc are just so uncommon here.

    The coolest thing is seeing the huge blocks of cash people bring/get at the bank. In china the 100rmb note us the biggest (about $18) so if they are doing something, like paying 6-months rent, they get these huge bricks of cash and wrap it up in newspaper! I’ve seen stacks worth 10’s of thousands (checks are also very rare here), and I can’t even imagine how nervous I’d be carrying that around.

    I’ve also gotten big chunks of cash, like my airfare reimbursement which, while in US dollars might be 10 hundred-dollar bills, in Chinese currency it’s about 65 hundred-rmb bills. It makes u feel like a total baller getting a huge stack of cash!

    1. J. Money January 23, 2013 at 9:59 AM

      HAH! Very cool indeed!!! People walking around with bricks of cash – that’s REALLY different :) I mean, people do here too in suitcases, but those are a *different* breed if you know what I’m saying, haha… Thanks for sharing! And give my love to China!

  12. Jen@WanderOneDay January 22, 2013 at 8:30 AM

    I live in the US, and I use my credit cards for just about everything that doesn’t require direct debit from a bank account (like student loans or rent). There are a few key reasons for this:

    1. If I have cash, I spend it. Maybe not right away if I have a 50 because I don’t want to break it, but once it’s in 20s or less, it’s as good as gone. No self control.

    2. Rewards are **awesome** on credit cards. I’m in the process of booking a multi-country 2 week mother/daughter trip to Europe, and so far I’ve saved over $1700 on flights and $400 on hotels using credit card sign up bonuses (British Airways and Priority Club visas).

    So in my case, I would say I save MORE money by using credit cards than I would by using exclusively cash, and it opens up opportunities that would not have otherwise existed (if I had to pay cash/full price for the flights and hotels in Europe, I could not afford to go and I wouldn’t get to take that mother/daughter trip).

  13. Michelle January 22, 2013 at 8:32 AM

    I like using my credit card and use it almost every time. The points are nice and so are the rewards!

  14. alana January 22, 2013 at 8:35 AM

    I live on the beautiful west indian isle of St,Vincent http://discoversvg.com. Like most of the other Caribbean islands, cash is still very much king here but credit card usage is increasing, More and more merchants are starting to accept card payments but we’re nowhere like Europe where I would have regularly use my atm card for payments as low as 50 pence. You definitely could almost live without cash in the UK.

    I previously thought having a credit card meant having to pay interest and since I’m not in the business of paying interest, I never thought of getting one. It wasn’t until a friend with a card explained how it really worked, that I went to the bank and got me my reward card. Three years and thousands of airline miles later, I’ve never paid interest and really the whole thing helped to pique my interest in other things financial previously unknown to me.

    We in the Caribbean traditionally use cash so when it’s done,it’s done, but now a lot of people are using credit cards to finance lifestyles beyond their means. The banks do a piss poor job of explaining how things really work and people often times aren’t perceptive enough to ask the telling questions. as a result, they go around carrying huge monthly balances just the way the banks hope they would. I do my best however to help educate people, particularly young people like myself. I just hate the thought of paying interest.

    1. J. Money January 23, 2013 at 10:01 AM

      That does suck when things aren’t explained all the way – ESP when they can result in such financial ruin for people!! I mean imagine the US without credit cards too? Many more people would be financially better than the opposite, especially as it changes your entire mindset with money & debt too. Not saying I want them to go away cuz I personally love them, but for the good of mankind it would probably be best ;)

  15. Gabriel January 22, 2013 at 8:37 AM

    After we have paid off our credit card debts, that was the last time we used credit card. It’s either we purchase in cash or use debit cards. It’s a lot easier to keep track of our expenses and we won’t need to worry about paying interest rates and penalties due to late payments.

  16. Paul January 22, 2013 at 8:38 AM

    Having lived in Europe I would have to agree that cash (and debit cards) is king there. In the past six months I have only used a credit card for business travel. I follow Dave Ramsey’s philosophy when it comes to credit cards. Although some folks claim to spend less with credit cards than while using cash, I’m not sure I believe them. My wife used to say that until she started doing our grocery budget strictly on a cash basis. We no longer go over budget every other month on groceries. We got into some debt with credit cards in the past, and we are currently working Dave’s Baby Step 2 (pay off all debt besides mortgage). Our hope is to put all that debt behind us by the end of this year. We have $23,271.12 left as of today. Wish us luck!

    1. J. Money January 23, 2013 at 10:02 AM

      Congrats!! And good luck! :)

  17. IDN January 22, 2013 at 8:54 AM

    I’m also from Europe, not western Europe, but the other side, eastern Europe, Romania. Here things are a bit different. Cash purchases are still king, people are starting to use debit cards. This is especially true in cities, almost 50% of the population is rural, so lots of people don’t have a need for plastic anyway. This is the most basic form of plastic you can own. You can also get Debit card with overdraft, which goes back 1 or 2 months, depending on the bank. This works in a way that you can take money on credit, as long as the debit card is where they wire your salary money, and as long as the balance on salary day is greater than zero. In the good old days (pre 2008 crisis) you could also very easily get a credit card, which some people get, personaly I found it not so interesting.
    For once I never went into debt (i’m in my 30’s there is time), and I always was taught to not spend money I don’t have.
    Also credit cards in Romania, maybe the rest of Europe aswell, are different. We don’t have the reward points system here. Typically you can get 0.5% to 1.5% cashback on select merchant stores, or even buy stuff in a few installments with no interest, if the amount due is paid regularly. Also credit cards have annual maintenance fees that I find are high (20-25USD /y vs 1USD/y for debit cards). This high maintenance cost actually means the actual “cashback” is a lot lower. Personally I don’t see the benefits of the credit cards, except for 2 scenarios:
    1. Buying long term use / household items (when renovating a house) in installments.
    2. Beating inflation/exchange rate fluctuations by buying items when they appear to be cheaper, with credit, then repaying credit, when the prices have raised. This tactic i think works for big items, and is guesswork most of the time (works for imported goods i presume). Inflation is like 5% in this part of the world, so it matters more I’d say.

    1. J. Money January 23, 2013 at 10:03 AM

      Sweet! Are you reading this blog in Romania too? That would be awesome :) But either way I really enjoyed this insight here – our world is so different in places!

  18. Samantha January 22, 2013 at 9:28 AM

    My husband and I stopped using any credit cards a few years ago and never looked back. Of course we have debit cards tied to our checking accounts so we don’t actually use cash, but in my mind it is cash. I keep track of our spending with this account using a spreadsheet so we never go over budget. Plus its super easy in that I do not have to worry about when the credit card bill is due.

    As for your list of pros, three of them also apply to a debit card. (Ease of swiping, same security protection, and easy to budget.) And a fourth pro you list (being able to spend more than is actually in your account) in my mind is a HUGE con. And for the fifth one, although most debit cards do not have rewards…have you not heard of Perkstreet?

    1. J. Money January 23, 2013 at 10:04 AM

      haha true true, but for the most part people don’t take advantage of debit cards or even KNOW there are places w/ perks/etc ;) Perkstreet is a great exception for sure.

    2. Andrea January 23, 2013 at 11:58 PM

      I was going to say almost the exact same thing in my comment, Samantha! My husband and I haven’t used a credit card in five years, and we keep careful track of the money we spend. We’ve been reaching our financial goals much more quickly this way.

  19. Brian January 22, 2013 at 9:32 AM

    No point in not using my credit card. I am able to get extra fee money (or rewards) for just doing what I normally do. I also get extended warranty protection (Amex is GREAT for that), trip interruption coverage (Chase Sapphire Preffered for the win!) and I get rental car coverage on top of my normal insurance and in some cases it acts are primary. Couple that will the fact I can dispute a charges (which you can’t do with cash) if the company I am dealing with does not deliver a product/service as promised.

    I know credit cards can be dangerous for some, but for me there are just too good to not use.

    1. J. Money January 23, 2013 at 10:06 AM

      I forgot about the disputing part!! I had Amex do that for me too when I was battling United Airlines and it was great… Their calls to them did MUCH more than mine – funny how that works ;)

  20. AverageJoe January 22, 2013 at 9:39 AM

    I never carry cash….it’s credit card/pay it off in full every month. I then use Mint reminders to make sure I don’t go crazy and blow the budget.

  21. Mike Collins January 22, 2013 at 9:40 AM

    I think it all comes down to how disciplined you are and if you can stick with you’re a budget and live within your means. The convenience of credit cards is great, as are the rewards you can earn using them. But if you fall behind and start carrying a balance all those rewards are quickly canceled out by interest charges, which is why the credit card companies offer you the rewards in the first place.

  22. Stacey January 22, 2013 at 9:44 AM

    I have managed to run a successful small business for 7 years (created it from the ground up) and have never used a credit card to buy a single thing: supplies, products, everything has been cash (debit card) only with the exception of a business loan for the building. People think I’m nuts that I do not have a credit card for my business… but I tell them that after 7 years of a successful operation, I think I have proved that they are NOT necessary!

    1. J. Money January 23, 2013 at 10:08 AM

      That is rare! But good for you!!! And at least you know that credit cards are an *option* for you later if there’s any point you think they’d be advantageous too :) Keep rocking with your bad self over there.

  23. Anne @ Unique Gifter January 22, 2013 at 9:50 AM

    I live in Canada and my Grandma (and past-tense my Grandpa) didn’t have a CC for awhile. It’s a pain…. there are certain things, like booking flights, renting cars, hotel room deposits and whatnot that are so much easier if you have a CC. Plus, you have to go get cash or use your debit card. Sometimes things like car repairs are more than you can charge on your debit card in one go, so then you have to spend the time going to the bank to make a withdrawal and whatnot. Sometimes you have to go more than once because your cash withdrawal limit isn’t high enough.

  24. Grayson @ Debt Roundup January 22, 2013 at 10:15 AM

    I don’t know if I could do an all cash “diet”. I have found that it is much easier for me to just put everything on my cash back credit card and then pay it off it each month. I like the simplicity, the security, and I don’t have to carry around a coin purse after my transactions. I don’t even think a coin purse would go with my usual attire, so that is just not happening. I think each country is different and the US has a love for plastic, probably a burning passion, but it is bad either way. Cash is king, but plastic is recyclable!

    1. J. Money January 23, 2013 at 10:10 AM

      Oooooh look at you bringing the environment up like that! Haven’t even THOUGHT about going that route yet, haha… but you are correct :) Cards do offer hands-off all that paper money! Though debit cards too, in that case.

  25. rhiannon January 22, 2013 at 10:22 AM

    I live in the US and since I was 19 (so the past 9 years) have always stuck with one rewards card for my spending and historically paid it off as i spent each month. However, after I got married it took me a few months to realize we had an issue in tracking to our monthly “budget”. My husband came in with some debt that we worked to pay off but after we had a few months of irregular spending (honeymoon, Europe, house improvements) I realized we were right back to where we started! I stepped back and did a deep dive into our spending I realized that even without those excuses we were spending over!

    My goal now is to get back to a strict budget where we pay with “cash” using our credits cards. i.e. never spend more than what’s in the bank account (even if we are anticipating a deposit) and pay off the credit card as we go. I recently got $250 back for credit card purchases but paid ~$200 in interest fees over the past two months. No good.

    We are lucky enough that the balance we do carry on our credit card can be paid off in the next two months. However, I don’t want to be playing catch up every few months to feel like we “live the life we want”. I’d rather make the smart trade-offs decisions on stuff we don’t really need now so we can buy the stuff we really want later! I definitely agree that our culture is to gorge on “things” and it’s something I’m actively trying to be conscious of… Any tips you may have on shifting your mentality (and more importantly the mentality of a husband who hates budgets) would be much appreciated!

    1. Anne @ Unique Gifter January 23, 2013 at 9:57 AM

      Hi – I would stop using the credit card and switch to cash or debit. The reason is that on 99% of credit cards, if they have not been paid off in full, ALL purchases start accumulating interest the day they are charged. So you are costing yourself ~20% on everything that you buy by using the card. Switch to debit or credit, save yourself some interest and then revisit once it is paid off completely.

    2. J. Money January 23, 2013 at 10:14 AM

      I’d think about giving him some sort of “spend however you wish” type of allowance! That worked for us for many years :) We’d each get, say, $200 a month to do however we please – no questions asked – but once that was gone that was that. So you could spend it all and get another $200 the next month, or you could save some and use it to buy something better as it carries over too.

      Usually it’s not so much a problem of spending too much money for guys (at least, with myself), but more about having freedom and not having anyone looking over our shoulders are asking us questions on it all. So the “allowance” helps get rid of all that AND you can easily track progress too.

      If that doesn’t work, try talking about money naked :)

  26. SavvyFinancialLatina January 22, 2013 at 10:50 AM

    We recently started using credit cards in July. We are building our credit to buy a house this year.
    I do think that initially switching from debit to credit made us spend more money. Since we don’t see money going out from our checking, it’s hard to equate how much we are really spending. With debit, money transactions were real time. With credit, payments are a month from when you purchased it, thus not real time.
    We pay off our credit cards every month, and we are trying to spend less overall.

    1. J. Money January 23, 2013 at 10:15 AM

      Credit cards do help with increasing your credit score too – you’re right. Forgot about that one in the Pros :) Especially if you have high limits and only tiny balances, or no balances at all even – shows you can be responsible! And, just like everything else already mentioned, only for those who CAN control themselves.

  27. Kimberly K. January 22, 2013 at 11:12 AM

    I’ve never owned a credit card either, and I don’t plan to ever own one. I’m only 23, but I don’t really want one because paying back my college loans is more than enough to build my credit (I pay $760 a month, at the moment with 2 part time jobs). I really don’t want to pay interest on anything else. For me, it’s easier just using my debit card and paying for things with money that I already have (which isn’t much).

    1. J. Money January 23, 2013 at 10:16 AM

      Nice! 23 with no cards is super rare! You’re the only person I know in that age range w/out a card :) Well, I don’t know how old that commenter was who inspired this post today, but you get the point.

  28. KM January 22, 2013 at 11:23 AM

    I seem to have some bad luck with getting my cc# stolen, but I still prefer to use my cards over cash. I wish the US would implement the credit card paying system that Europe and Canada uses (or at least I know France and Ottawa has it). For instance, if you’re at a restaurant and pay with a card, the server brings the small, portable payment “thingamabob” over to you and swipes your card in front of you. No need to worry about anyone swiping your card and stealing your number. Europe seems to have more security measures in place with credit/debit card usage compared to the US.

    1. J. Money January 23, 2013 at 10:17 AM

      Yeah, that would be better indeed :( And also probably more expensive on their part, but I’m sure technology is getting more efficient over time so it would be worth it at some point?

    2. JMK January 26, 2013 at 9:15 AM

      My teenaged son has had a pizza delivery job for the past 18mths. When someone orders and want to pay by CC he takes the pizza and that handheld device with him to their house so they can swipe and pay while he stands at their door. They are a small family owned store, not a big chain. I have no idea what it costs to use that system but I suspect the ability to let people have a pizza delivered even if they didn’t stop at the ATM on the way home means more orders.

      Last summer we spent a week in New Orleans and the taxi drivers had handheld devices for credit card payments, so it’s availble in the US, not just here in Canada.

      1. J. Money January 27, 2013 at 9:53 AM

        Nice! I know what’s his name from Twitter created that “Square” thing too which attaches to iPhones where you can swipe credit cards on now. The future is bright! :)

  29. bethh January 22, 2013 at 11:53 AM

    I noticed that cash is king when I was in Europe this spring (Germany, Belgium, Amsterdam). I was staying in little hotels/guest houses and traveling on a Eurail pass, and it was very clear that all my hosts preferred to be paid in cash. It was a little odd at first, but I loved it because I came home to absolutely no credit card bills from my trip!

    1. JMK January 26, 2013 at 9:17 AM

      I suspect that with small businesses and private B&Bs it’s a combination of avoiding the expense of getting set up to accept credit card payments, and also cash means they have the option of whether or not to report the income….

  30. Chris January 22, 2013 at 1:16 PM

    I don’t use credit cards. I did once to buy something big so I could pay on it and build credit but since then I don’t. Cash money all the way! I’m in the US and errrbody uses credit cards. It’s totally ridiculous to me.

  31. Kristen January 22, 2013 at 1:26 PM

    Japan is also a cash-based society. One important difference, though: it is EXTREMELY safe, with practically no theft. I’ve had friends leave their wallets in public restrooms and in subway cars, and they were always either turned in to the police or still there when they went back for it an hour later. That certainly makes a difference when you’re carrying so much money on you at all times!

    Since I’ve moved back recently, I continue to use primarily cash, although I do use debit as well. I use my credit card only for a few large purchases, to keep it active. I believe that different strategies work for different people, but I think a large number of Americans would benefit from reducing their credit card use. If you’re responsible about it, credit cards can be great. If you’re not, though, the consequences can be disastrous.

    1. J. Money January 23, 2013 at 10:19 AM

      Yeah! Love that culture in Japan :) Was that way too when I lived in Korea – everyone looking out for each other and not that much crime… Of course areas in the US are certainly like that too, just not in the big cities which sucks.

  32. The Debt Side January 22, 2013 at 4:10 PM

    I pondered this question myself. We here at The Debt Side say “hats off” / ‘Congratulations” to the reader who said she did not use a credit card ever in her life. We agree with your assumption that she and others like her, have a propensity to spend less over the long term by not having the “security blanket” of the credit card.

    Perhaps we should all try it for a time and see how much money we can save?

  33. Financial Black Sheep January 22, 2013 at 4:49 PM

    I would never stop using plastic completely. I am currently not using any credit cards, because I want to make sure I completely pay off all of my debt asap. I am using cash on a re-loadable shopping card ($0.10 discount per gallon of gas with already crazy cheap gas), and will use cash for anything else that can’t be put on my debit card (seriously not going to pay my car insurance with cash). I guess it is just easier to use some sort of plastic, whether it is a debit card, re-loadable shopping card or credit card. I like it more than cash because I am less likely to lose money and have ways of recouping loses if something gets stolen. Contrarily, cash is easily lost, or stolen and I like every last cent to be accounted for.

  34. K.K. @ Living Debt Free Rocks! January 22, 2013 at 6:32 PM

    Right now I’m in Trinidad (my birthplace) and here the majority of citizen do not have or use credit cards. People are still fearful of getting into debt and many live by the concept of cash is king. If you don’t have it, you don’t buy it. Debit is accepted in major business establishments (Linx). Mortgages are still something that is accessible only for those who can meet the stringent criteria so many people will rent for the most part of their lives here. Others have been fortunate to have their home or land to build upon passed down from previous generations.

    1. J. Money January 23, 2013 at 10:20 AM

      Oh wow…. I guess if you can’t take out much credit then yeah, you can’t buy a house/land unless you save up a ton! very interesting indeed… And I love it that you’re blogging from there too :) Whenever I get a chance to visit I’m totally hitting you up!

  35. debtgirl January 22, 2013 at 7:10 PM

    This person should continue to NOT pay with a credit card for the rest of their life!!!!! That would be a hoot! Then they could write a book and make bagazillions!

    1. J. Money January 23, 2013 at 10:21 AM

      Haha for sure!

  36. Christine January 22, 2013 at 9:27 PM

    When I went to college I thought I would be “smart” and avoid going into debt by NOT signing up for the super easy credit cards they were throwing at college students in the early 2000s (2004 to be exact). But then a few years later I realized that having a credit history is pretty important. When I was in grad school my utilities had to be put in my parents’ name because I had no credit history. And a bank I had been with for YEARS wouldn’t even give me a low limit student card to get me started. And now I’m 26 and still have no credit history. And I’ve learned the hard way that apparently NO credit history is even better than bad credit history. :/ I do use my debit card for pretty much everything though…does that count since it’s still plastic? ;)

    1. J. Money January 23, 2013 at 10:22 AM

      That sucks, right? That you were being responsible and not getting into any trouble, but then it screws you during times of needing credit? Ugh…. have you ever tried opening up store cards before? That’s typically easier at least from what I hear. And will help get your history going as well – you just buy one thing, pay it off and then repeat every few months. At least you’re good with money though throughout all this! :)

  37. KK @ Student Debt Survivor January 22, 2013 at 9:30 PM

    I literally have change in my wallet right now. I hardly ever carry cash and almost never have to go to an ATM. When I’m in rural areas I carry cash, but in NYC almost everywhere takes credit card (even for small purchases). I probably could switch to cash, but honestly I feel safer not carrying cash.

    Interestingly I saw a couple of French tourists (well they were speaking French) at a restaurant the other day. When the bill came they paid in cash, but what was crazy to me is the woman pulled out a bank envelope with a thick stack of cash and counted them on the table. All I could think was, man somebody else just watched you do that and when you leave you’re gonna get robbed.

  38. Aloysa @ My Broken Coin January 22, 2013 at 9:37 PM

    I grew up in the Soviet Union where we did no have credit system. So we did not have debit cards, credit cards, loans and so on. We had to pay cash for everything, and I mean, absolutely everything. I have to admit that this system forced people to save money for big purchases. But there were also families like ours, who lived from paycheck to paycheck, and never dreamed about buying a car or a house.

    1. J. Money January 23, 2013 at 10:23 AM

      That’s so wild…. even to never dream about owning a car or house! Can you think of anyone here in the States that is like that? Not me! So so interesting…

  39. Ylang January 23, 2013 at 1:43 AM

    Mabuhay! From the Philippines here.Long time reader, first time commenter :) All the comments are so interesting. I grew up without any concept of what a credit card is. Both my parents, up to this day, haven’t owned, much more used a credit card. Everything was paid for in cash or if you are a loyal customer to a specific store,usually owned by people whom you consider friends, you can go pick up items and have it listed on a little “credit notebook”. My dad usually pays all of it at the end of the month. The time that they owned a debit/ATM card was when they retired, forced by the government who routed their pensions thru that. They don’t still swipe it though. So imagine my finger-trigger-happy self when i came here in the good old US of A and discovered credit cards! :))

    1. J. Money January 23, 2013 at 10:25 AM

      Hah! Interesting!! I LOVE love love the friendly store credit idea too, jeez… that’s the best when everyone knows your name and trusts you like that :) I know some bars allow you to keep open tabs and what not (at least in the movies! haha…), but yeah – for the most part we’re all about our cards here :) Thanks so much for leaving a comment today and saying hi! I love hearing from my readers.

  40. Diane January 23, 2013 at 9:47 AM

    Once upon a time we were following the cash envelope system. And then somebody (i.e. not me) decided to clean out the car and the gas envelope got tossed into the trash can. And this happened not once, but twice! So while he carries the debit card, I carry the cash and one plastic as a back-up for emergencies. But we communicate daily on what we spent.

    The first time we tried to use a credit card at the McD in Jamaica, we got a look. I have only been to a few other countries but I have noticed that where there is few plastic and mostly-cash system, you are also expected to barter on everything (except McD). And bartering is not the norm here so it was a bit hard to get used to at first.

  41. J. Money January 23, 2013 at 10:28 AM

    OH jeez, haha… yes – throwing away envelopes of cash is bad! :) I did it once too by accident in college when we all got per diems on food and what not on a school trip, and I just have left mine on the table after paying a bill cuz after lunch it was long gone :( And of course when I went back to ask if anyone had left a large pile of cash the answer was no ;) Those jerks… But my faith in humanity was quickly restored when all of my friends gave me their cab money from their piles which luckily filled mine back up to the top and didn’t force me to fork over $400 of what I lost :) One of the nicest things anyone has ever done for me!

  42. JuhaK January 23, 2013 at 12:05 PM

    I’m from Finland, and I nowadays have a credit card (that I actually use), but I pay it off in full every month. We don’t have any “cash back” or “bonus point” system here, so I’m actually only using it for budgetary reasons.

    Couple of years ago our credit cards were actually called “time of payment -cards”, that is they weren’t real credit cards. I guess really rich people actually had real credit cards but they weren’t for us “ordinary people”.

    And yes, I read your blog regularly from Finland :)

    1. J. Money January 24, 2013 at 2:11 PM

      Hooray!!! Hello my dear Finnish (?) friend! :)

  43. Econowiser January 23, 2013 at 2:47 PM

    Here in Holland we don’t use credit cards that much either. For online purchases or putting in a deposit or something. I hardly ever pay cash, I always use my debit card and so do a lot of other Dutch people. It’s very efficient and clear. The second I paid for something I can go online and have a look at my bank statements and see that same purchase. So you can’t spend money that you don’t have.

  44. The Happy Homeowner January 23, 2013 at 4:02 PM

    Wow…this comment thread has blown up! :)

    I love using my credit card because I get cash-back rewards, the added protection helps me sleep a bit better knowing they’ll help me if I get into a fraud-ridden bind and my particular card has no foreign transaction fees. I couldn’t imagine being cash-only!

  45. Cat January 23, 2013 at 9:01 PM

    I find it interesting that the pros said that you spend more with a credit card, because I find it opposite. I tend not to go out for lunch or buy silly things at the store with my card because I don’t want to charge really small amounts a million times, but if I have cash they HEY! I can get that pack of gum… and that coffee… and that $7 lunch sandwhich at the corner deli that only takes cash…

    1. J. Money January 24, 2013 at 2:13 PM

      That’s true for me too actually – I hate putting tiny amounts on my card so I’d usually go without as well. Good point :)

  46. Charlie Hendricks January 23, 2013 at 9:28 PM

    I had a friend in college who racked up over $20k in gambling debts on his credit card. I learned very quickly that credit cards were a means to an end. Now – I use a credit card but on the back we don’t sign our name but sign “ask for id”. Just to be more secure.

  47. J. Money January 24, 2013 at 2:15 PM

    YES! SMART!! I do the same, even though only like 1/10th of the people ever *ask*, ugh… But it does make me feel better for sure.

    And crazy about your friend’s gambling debts!! Isn’t online poker and what not now banned from the US cuz of that stuff? That was hot w/ my friends back in the day.

  48. Suzanne January 24, 2013 at 6:15 PM

    Plastic is so convenient that I don’t think I can stop using it! I am however absolutely certain that I DO spend more using plastic because of the convenience. In fact, I am just about to go out grocery shopping where I will probably pay with my Amex. I accrue points with that card and use them for nice meals and other bonuses. When I travel to Mexico and South America though, cash is king. When you visit another country it’s interesting to see how their cultural habits are different from the U.S.

  49. Roman February 1, 2013 at 4:31 AM

    I feel like I should add my record to this Global Census :) Cash is not king here in Russia, it’s the emperor of all kings. And yes, I never paid with a credit card, and used my debit maybe ten times over the years. Even condos are often bought here with big, nice bricks of cash.

    1. J. Money June 21, 2013 at 10:43 AM


  50. John June 16, 2013 at 4:00 AM

    Well….I must say that I never and hope will never use a credit card in my life and that for the reason….I hate someone out there would know what I do, on what I spend, I prefer to by anonymous. I must say that we’ll all be slaves someday if we’ll stop using cash. Cash is king no matter what. With cash you can do anything you want without anyone know how you live your life, you can Launder money easily. Imagine a cashless society and … you and your friends ( let’s say 10 friends) are in a club having fun…how in the world you would pay for that….for each other??? I really cannot imagine that. So…I suggest get rid of the CC’s and start using cash. Probably you fear of theft but….what do you prefer??? to lose money once or….be slave for a lifetime????

    I live in Eastern Europe where ….cash is king but most of americans…with chicken brain…would think I’m an old fashioned guy but…you will end up slaves and the big brother will watch your ass every where you go and what you do….this is modern slavery. Just imagine you do a bad thing and someone out there just erase your credit score on your credit card…. and from a millionaire….you end up being a begger but if you have cash….hidden somewhere…they cannot take…what they don’t know you have so…. wake up guys…. PAY CASH!!!

    Do you imagine Lil Wayne or 50 Cent throwing plastics in the air…like they don’t care :))) ???

  51. J. Money June 21, 2013 at 10:44 AM

    Ahahha…. You lost me in those first two paragraphs but your PS reigned me in again ;) Best comment all day.