These days, it seems like everyone uses credit cards; who needs cash when you can pay with plastic and get points that earn you airline tickets and other goodies? Credit cards are also a more attractive alternative since they are more secure than regular cash; if someone does succeed in stealing your credit card and using it, your bank will cover your loss, but once your cash is stolen, it’s gone. Almost everybody accepts credit cards, so why not use them?

From a personal finance viewpoint, there are several reasons as to why you shouldn’t use credit cards. One major drawback of using a credit card is that it encourages impulse shopping by providing you with easy access to additional cash. When you use cash, if you want to buy an item that costs more than the cash you have at hand, you have to go to the bank and withdraw more money. Hopefully, the additional time it has taken you to get the cash will allow you to reconsider your purchase and figure out if you truly can afford it or not. With a credit card, though, you don’t have that built in period of time that allows you to think – you just whip out your card and you’re ready to go.

Credit cards encourage overspending. You may go to the store intending to only spend $20, but with a credit card you can easily go over your budget. If you only bring the exact amount of cash you intend to spend, then you have to stay within your budget because you don’t have the cash at hand to spend more.

Cash will also make sure you don’t buy more items than you need. For example, you go the store to buy just one pair of pants; however, that store is running a sale that gives you a free pair of pants – once you’ve bought the first two, that is – and it’s such a bargain that you simply can’t pass it up. A credit card would allow you to make that additional purchase and ruin your budget, but paying in cash would reign in the impulse to buy additional items.

When you don’t pay in cash, it’s easy to forget how much money you’re spending. Spending seems more real when you’re actually counting each and every dollar going out – swiping a card doesn’t have the same psychological effect. If you switch from credit cards to cash, you may be surprised to find out how much money you end up saving not because you’ve changed your buying habits, but merely because you have a better idea of how much you’re spending.

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