Everything Finance

For years there have been many consumers who have charged through life (pun intended) putting any and all expenses on their trusty credit card. Roughly half of those consumers managed their accounts responsibly and benefited from the many perks associated with using their credit card and paying the balance in full each month. The other half....well many of those people are dealing with the fall out from the economy and struggling with high levels of debt. Not surprisingly more and more people are choosing to pay with cash, debit cards or any other means besides their credit card. This is likely due to the extreme changes going on within the industry as well as an awakening that many of us have been living beyond our means for far too long. The good news is you can reduce debt and also save money by keeping your plastic in your wallet. In fact, while merchants should not charge more for the convenience of using a credit card, there is no rule preventing them from offering incentives to encourage consumers to use cash. Here are a few examples of when it pays to use cash for purchases.



* As many of you may have already noticed, the price for gasoline is slowly creeping upwards again. We are not seeing the numbers that were posted last year (at least not yet) however many merchants still remember the sting of paying hefty credit card fees for purchases made with credit cards last year. As a result many gas stations continue to offer a discounted price per gallon if you pay with cash.
* One area many people do not think about in terms of cash payments is health care. More people are forced to deal with the high cost of routine or emergency health care visits due to job loss (insurance loss). Patients who have no insurance or have high out-of-pocket costs can actually save up to 50% on medical procedures by paying cash. Granted 50% is not the norm, but the point is, you should ask before you pay for services if there is a discount for paying cash.
* While not as common as gas or a trip to the doctor, paying cash for big purchases can also save you money in the long term. If you save money in advance to pay for your next car or even home in cash. Even if you cannot pay off the entire balance upfront, making a large down payment will significantly impact the amount of money you have to finance, in turn reducing the interest fees you would otherwise incur.

When it comes right down to it, with the recent changes in the credit card industry and other areas of the economy, paying cash is one of the easiest ways to save money. Not only will it help you avoid racking up high amounts of debt that may become more than you can reasonably handle when you pay cash you avoid interest charges that drastically increase the original purchase price. While there may be situations when paying cash is difficult or seemingly impossible, consumers who make the effort in this economy will most likely benefit for their efforts.

Trisha Wagner is a freelance writer for DepositAccounts.com, where you can compare rates of checking accounts from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.