Tuesday, July 7, 2009

Switching to a Cash System

1) Spend existing dollars
2) Save more because you see the dollars leaving your hands
3) Do not need to worry about interest rates and finance charges increasing
4) Some stores offer discounts for paying with cash

Downsides for a cash system
1) Harder to track because a person needs to make an effort to track cash
2) Don't have the credit card warranties
3) Can't use cash for internet transactions
4) Need to visit the bank to obtain the cash

Compromise -Debit card for your bank
1) Most establishments accept debit cards
2) Should be easy to track the transactions
3) Same benefits as the cash system # 1 and 3

Downsides for using a debit card
1) Not recommended for internet transactions
2) Hotels put a hold on a significant amount of funds if you use at registration
3) Some point of purchase sales do not have the ability to put in a pin number
4) Using at a restaurant looks questionable because your pin # might need to be disclosed

Any tips on using debit cards?


Lucy T said...

Nowadays, most banks issue Visa Debit cards. Visa offers the same service and guarantees on its Visa Debit cards as it does on its regular Visa charge cards as long as you use it as a charge card and not a debit. Using it as a charge card instead of as a debit card also eliminates the need to enter a PIN. Either way, as a debit card or credit card, the money is deducted from your account. You can also use the card as a debit card in an ATM machine.

Lucy T said...

Dave Ramsey says that a study showed that in the same way people spend more when using a credit card, they also spend more when using a debit card (over spending with cash)but not quite as much as they would with a credit card.