We all know the damage that having credit cards can cause if they’re not used responsibly. You could potentially damage your credit and in the long run have trouble getting loans, renting an apartment and a list of other things that are determined based on your credit score. To be on the safe side, there is a segment of the population that choose to go cash only. Opting to not use credit cards and avoid temptation of impulse buying. All while only being able to spend what they can actually afford at that moment. If they don’t got it, then they don’t got it.

I will admit that I’m not totally on board with the cash-only way of thinking for a few reasons. Depending on your lifestyle this may or may not work well for you. If you do a lot of traveling it will be extremely difficult for you to do this. If you’ve ever rented a car or stayed at a hotel then you know they usually require a credit card to place a temporary deposit on your card in case of any damages. Say for instance you’re staying at a hotel for 4 nights and their policy is a deposit of $100/night in case you damage the room, order room service, etc, then that is $400 ($100 x 4 nights) that you will also have to have ready. That $400 is on top of what you have to pay for the room itself. There are some hotels that don’t take cash and you’ll need some sort of card. If you put a hold on your debit card, that’s a lot of money to not have access to for your trip. Even if you do not use any of the $400, it can take several days or even weeks for that money to show up in your account again.

It can also be bad if an emergency pops up but your emergency savings isn’t enough to cover the costs. Then what are you going to do?

On the flip side, if you’re good with your money and keep a pretty steady routine each month, then you might be able to make it work. You’ll have the comfort in knowing you’re free of credit card debt and you should have a better handle on your money. You just have to make sure you’re very disciplined. Buying something that’s not in the budget can have you coming up short at the end of the month, and that’s what you don’t want.

No matter what it will take a lot of planning to go all cash or credit. Cash you’ll have to plan even more, especially with the emergence of digital payment methods like ApplePay. So do you think you can go the cash-only route?

Leave a comment and let us know.