THE MONEY CULTURE

Daniel Gross

Get Ready for the ‘Pain Of Paying’

With credit, a Saturday-night date means dinner and a movie. When you have to pay cash, it's dinner or a movie.

 
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  • Posted By: letsfixthismess @ 09/07/2008 8:50:34 PM

    Comment: Mr Gross has clearly defined the issue that we are in a serious economic decline, the end now where is site. Glen Beck said it best this past week in a live forum in Phoenix, that some one should run for the Presidency as as ONE TERM candidate and make the tough choices, cut pork, balance the budget. and get the U.S. back on track. Pay Cash!! Save Trillions as a Governement.

  • Posted By: bbkktp @ 09/07/2008 12:42:21 PM

    Comment: I am a credit card user who pays it off monthly. Paying by check is an effective option for current purchases, provides a real time perception of spending money, but is slow. My objection is to the use of debit cards with no real time bookkeeping on the debit from your account.
    Using a a debit card without maintaining a running account balance has more danger than a credit card. It is like blood loss from a million cuts, no single one is fatal but the cumulative effect can be as bad as a knife to the heart. You never see what is happening. With a credit card, at least on a monthly basis you see the cumulative impact on your budget. When do you actually see this impact with a debit card?

  • Posted By: MisterMR @ 09/04/2008 11:17:32 AM

    Comment: Not exactly.

    If you pay something with cash, you have to save before the purchase, whereas if you buy something with debt (eg- credit card) you have to save after the purchase. Since, during the period that passes between "before" and "after", you gain some money, you can actually afford more with credit card than with cash.
    The problem is that, sooner or later, you're supposed to pay back your debts. At that point, you have to pay with cash, so that you lose the time advantage, and you have to pay back previous debt, so that you have less cash available for consumption.

    It seems to me that american economy has been payng back debt through other debts for some time, so that, when time comes that you can have no more credit, the shock of having to pay cash and having to divert cash from consumption to debt-paying is going to be huge, both on a personal and sistemic level.

    Marco

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