Today, a friend and I discussed the difficulty of really watching credit card spending. Like my friend, I put 95%+ of all my non-rent expenses on my credit card. We are both responsible credit users – we pay off our charges in full every month, and we use the card to get rewards like cash-back and gift cards. But we both agree that somehow, credit card spending seems to be subject to the “creep”, and the direction is often upwards.
The conversation got me thinking: am I prone to spend more paying with a credit card than I would be using cash?
Research says yes, and as much as I love my CC, I tend to agree:
Even though I don’t carry a balance month-to-month, a CC is just SO convenient that it’s easy to rationalize that “oh, it’s just an extra $20” and “oh, I’ll get rewards on it.” A $20 bill seems to be like a quite a bit of money. But a $880 credit card bill doesn’t seem that different from a $860 bill.
I don’t think I spend MUCH more using a credit card than I would using cash, but I’d be giving myself too much credit (heehee. pun intended!) if I insist that I haven’t been lulled by the CC into spending just a little bit more at times.
Still, I have no plans to give up the plastic. My credit card allows me added protection that I would not get with a debit card (virtual account numbers, low liability in case of fraud, etc.) and is way more convenient than cash. Besides, when my cash is gone, it’s gone. I have no idea where it went. At least with a CC, I have a statement and can keep track of my purchases.
Despite some valiant attempts in the past, I don’t really keep track of every penny either. My fixed expenses are what they are, and I have an idea of how much my credit card bills should be every month (below $800-ish) for me to make my savings goals. I have dollar-amount saving goals – as long as I make those, the rest of the money is mine to do as I will.
Do you think you spend more using a credit card?