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.

By Daniel Gross | NEWSWEEK
Published Aug 30, 2008
From the magazine issue dated Sep 8, 2008

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

    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

    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: R3ACT0R @ 09/03/2008 6:36:35 AM

    "With credit, Saturday night means dinner and a movie. When you pay cash and have a fixed budget, it's dinner or a movie."
    Herein lies the fundamental flaw that snares so many. If you couldn't afford to pay cash on your budget for both dinner and a movie, then you can't afford to pay with credit either.

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

      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

  • Posted By: Tea6 @ 09/03/2008 11:26:21 AM

    Many companies expect employees to put business expenses on their personal credit card and they take their time reimbursing, often beyond the grace period. Employees end up subsidizing business cash flow, even more so if you use a debit card..

  • Posted By: ladomi @ 09/03/2008 11:19:57 AM

    It's surely convenient when I'm temporarily tight of cash currency,but definitely a disaster while shopping.So I canceled the credit cards occasionally using, only with one for business trip and another for daily life.

  • Posted By: ladomi @ 09/03/2008 11:19:35 AM

    It's surely convenient when I'm temporarily tight of cash currency,but definitely a disaster while shopping.So I canceled the credit cards occasionally using, only with one for business trip and another for daily life.

  • Posted By: jonnyooh @ 09/03/2008 2:44:41 AM

    I pay my CC bill off every month. That works for me, but I don't know if it would work for someone who couldn't pay cash for each purchace. For me, a CC is just a convenience. I haven't used cash in years. About every four months, I get some ones for tips or for the Salvation Army pots. I know a lot of people, mostly women, who use checks. That holds up the line. I don't get it, and I don't get why writing checks is a woman thing. If anyone knows, I would sure like to hear it. I'm afraid I will die of old age before I find out.

  • Posted By: neesy08 @ 09/03/2008 1:56:09 AM

    I gave up my CC's about 10 years ago. I love paying cash for purchases. It means no monthy bill payments, and I appreciate what I have more as i have to actually SAVE my money to purcase what I want

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