Day 27: To Swipe or Not to Swipe
Last night I went home to find one of my favourite mails on the table; the credit card bill. I’m serious. Like a love letter, I opened it carefully and inhaled the smell of fresh paper/ink/financial management triumph combination. I scanned every charge from the top to bottom while tallying up the amount I used for myself, household and work expenses. It’s a self-indulgent exercise really, nothing less.
You see, the bank has a love-hate relationship with me. They love me because I have been an exemplary customer. So much that they waived the last two credit card charges (close to $70)30 seconds after I asked them to. They don’t want to lose me and know that such fiscally responsible customer can’t (always) be exploited. They hate me because I’m fiscally responsible.
For a while, I’ve been in a credit card comfort zone without critical review on how credit card has slackened my spending habit. I must admit that there are quite a few items in my credit card statement that would never have crept into my budget, had I used cash-only method. A few examples from last month’s statement include a dress, a blueberry farm (I’m a sucker for organic jam in pretty jars) and a couple of dining out trips.
If I go back as far as 12 months and I’m sure similar pattern will emerge. Realising how my lax credit card habit could amount to more than $5000/year, I plan to alter my credit card dependency, at least temporarily.
In April, I will withdraw a set amount of cash at the beginning each week for my non-essential purchases. If I run out of money before the end of week, bad luck. All of our bills are paid with credit card, so I don’t see the need to change that.
Money Reasons wrote an interesting article on things you should consider before using credit card. By his standards, I should have a green light. The theory is, if you can control your spending and have your consumer debts paid, the payment method doesn’t matter much.
Still, restricting the convenience of credit card could make a difference in your budgeting system. If you block all access to money sources, you have no opportunity to spend it. I don’t know how or by how much yet but I will write down my chronicles in the land of paper notes and coins.
How much influence do you think payment method has in your purchase decision?
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Good point! Sounds like a wise practice!
There should be a term called "Credit Convenience Creep", which should represent the extra you pay for things because credit cards make it so easy to spend vs paying with cash.
I remember reading studies that basically state that you will spend more because of a credit card vs using cash…
Sounds like a great experiment, can't wait to read about how you do!
This is another layer of credit card cycle, isn't it. After paying it off, there'll be another potential disaster unless it's out of your life. I will see how beneficial it is to put my credit card on the back seat for a while.
I start the week with $70 cash, then usually it goes pretty quickly. It's a good way to limit expenses, but there are times when you just have to say "so what?" and use the credit card for a purchase. It's about enjoying life too, so there's a balance between being sensible and having fun.
You're right. I bet your partner is so lucky to have you
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Good point in this article, something a lot of PF bloggers like to talk about.
I believe it would curch our spending habits a lot if we were denied access to our credit cards. I recently paid off my only card and cancelled it, and needless to say, I have spent less! It has been a great expereience, though I do need another card I feel, just for emergencies.
Congrats on the credit card payoff! Be careful with those "emergencies"
They creep up fast and nasty.
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Cash, check or charge each method has the same result, pain and agony!
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