Pay with Cash or Credit Card
With the surge in home foreclosures, homeowners have unfortunately had to resort to utilizing their credit cards to pay their monthly mortgage. Credit cards, although great to have in an emergency, are the bane of society. In our parents’ day, the rule of thumb was to pay with cash. If you couldn’t afford it, you couldn’t but it.
The credit crunch today has forced many well known banks to borrow money from the Federal Government. Here are some startling statistics: According to the Federal Reserve, for the year 2006-2007 the total US consumer debt was $2.46 trillion dollars. This is mainly credit card debt. Another source indicates that 8.3 percent of households owe $9,000 or more in credit card debt.
The problem with credit card debt is that is it so easy to obtain. Every day millions of applications are sent to households throughout the nation. We have become a nation in debt. The only way to alleviate this problem is to pay with cash. If you do have multiple credit cards, it may be a good time to start paying them off. If you add up the interest rate you are currently paying, you may be shocked.
While most people think having a credit card is convenient, it is a burden that has become too heavy to bear. While it is advised to have one credit card in case of an extreme emergency and because it helps when applying for a loan or buying a car, one card is sufficient.
What are the advantages in paying with cash? For one thing, you will be able to buy only what you can afford. There will be no debt accrued and, generally speaking, you can live a life free of the stress and not lose sleep over how you are going to afford those monthly bills.
There is a method of paying credit card debt that has become popular lately. It’s called Debt Snowball. Basically how this works is that you make a list of the credit cards you currently have and list them according to the highest interest rate first. Instead of just making a minimum payment on the first high interest card, add any additional money you can afford to it. After you’ve paid off this card, proceed to the next card on the list and use the same method.
You know, our parents didn’t believe it debt, which is why most of them do not own credit cards. One can debate the merits of this decision, but if you think about it – they are right. They save for those items they truly need and then pay in cash, never overextending themselves with debt.
Debt, in any form, does nothing to improve life but only adds to the emotional angst one feels. Today, with food and gas prices at their highest, one may rationalize that using a credit card may enable one to keep some cash on hand. But, eventually that debt has to be paid. Wouldn’t it be better to find alternative ways to pay with cash, by clipping coupons or printing out online coupons for the supermarket and checking for sales in the newspapers?
Paying with cash has become an exception, rather than a rule and, unfortunately, we are all paying a high price in the name of expediency.
Tags: cash, coupons, credit card, payments