I’ve decided to start a new campaign. I call it “Paper or Plastic”. Let me explain.
Plastic = credit. You know what this is. 18% interest (or worse).
Paper = cash. We all know what this is. Greenbacks.
I believe you should always use paper. ALWAYS. Sure, there are a few people out there that have the self discipline and knowledge to use credit to their advantage (Jonathon), but for everyone else, you should strive to use paper. Here’s a short list of things:
Eating out: paper
Everything else: paper
Okay. That pretty much covers it. In my humble opinion, the only thing you should EVER finance or carry debt on is your home. When I say home, I don’t mean, home equity lines of credit to buy consumer goods, I mean, just mortgage payments.
If you need further incentive to use paper instead of plastic, consider this. If you’ve been using plastic (and not paying it off at the end of the month), you are paying more for everything you buy. How much more? Depends on what interest rate you are paying on that debt and how long you carry the debt. But, if you have been on the roller coaster of credit card debt and then get off of it, you instantly give yourself a discount on everything you buy. If you were paying 18% interest on your credit card, it’s like you’ve suddenly been given an 18% off discount on EVERYTHING you buy. Now that’s a deal!
So, when you buy something, pay with paper, and take it away in plastic!