Creditcards.com notes that according to a TransUnion analysis of May 2013 credit files, the, “Average credit card debt per U.S. adult, excluding zero-balance cards and store cards (is) $4,878.”
While many people have multiple credit cards, I don’t even have one; and there are several reasons why. Though it might seem like it would be problematic not to have an available credit card in my name; personally, I prefer it. My wife has one, but I chose not too.
Harder to spend
For many people, the draw of credit cards is their convenience. And again, for many, that’s also the problem as it leads to overspending, overindulging or at least not considering purchases as thoroughly before buying.
Don’t get me wrong, I’m not saying that credit cards can’t be useful. I still like them for travel purposes or bigger-ticket purchases. They can also be handy for things like hotel and flight reservations, and used in the right way, they can have certain associated perks or reward benefits that can be worthwhile. But they can also be dangerous.
Like chips in a casino — and those associated casino comp benefits for play — credit cards can make it easier to spend. Just swiping a credit card — like throwing a few chips down onto a gambling table — can be easier than extracting dollar bills from a wallet and seeing that hard-earned money turned over to someone else. And those reward benefit for use — like comps at the casino — can lead to that “Well…it’s not so bad to buy this since at least I’m getting reward benefits” type of rationalized spending.
Therefore, when I’m out and about on the town and not looking to travel or spend a lot, I tend to stick to cash since I’m not as tempted to spend, and once it’s gone it’s gone.
I have to look before I leap
When I have cash in my pocket rather than a credit card, I often find myself doing more calculations in my head and “looking before I leap” so to speak before I spend. Knowing that I have a credit card in my wallet with an associated credit limit of say, $1,000 provides peace of mind, but also makes it easier to spend. If I go out to dinner with only $50 in my wallet, I am more likely to consider how I’m spending and on what. And again, it forces me to actually see that money leave my wallet — money that I worked hard to obtain — rather than just swipe a card and sign my name electronically or on a slip of paper.
I like my privacy
Maybe I’m just old fashioned, but I still like my privacy to some extent. When I buy in cash, I pay my bills and that is typically that. I get a receipt and my product or service and I walk out of the store. With a credit card, all sorts of informational tidbits regarding not only me but my spending habits are recorded. My credit card number is captured, the store knows who I am, the credit card company knows where I shop and when and in what amounts, and there is a variety of personal information that can be — and often is — divulged to any number of people or businesses who may or may not even be related to the direct transaction.
And while I’m not doing or buying anything shady or anything like that, I still believe that in many cases some level of privacy should be respected in our personal spending.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.