Credit Card Questions

[Blue Collar Guy]

But more importantly, did you spend 20% less at the restaurant because you were paying with cash?

The restaurant does not accept credit cards. Peter Lugers.https://peterluger.com/. So the meek & elderly that dine there are loaded with cash to the eye teeth.

 

[RobbieB]

I like to pay cash because nobody knows what I bought. I always have 100 to 300 in the wallet.

 

[scrabbler1]

Similar to the OP, I was mainly a cash-only user except for large purchases (for me, large is anything over ~$50). But about 3 years ago, I switched to a cash-back CC offered by my own bank, one I use for my everyday activities and had recently obtained online banking access earlier in 2014. Makes it really easy to pay the bill.


I began using the CC for many of my previously cash-only purchases, mainly my trips to the supermarket. I still pay cash at the supermarket sometimes, when I buy less than $30. For over $40, I use the CC, and for $30-$40 I sometimes use the CC, sometimes use cash. The result of my increased CC use is that I make only 1 monthly trip to the ATM instead of 2.


But when I go to the supermarket, I no longer have to worry about not having enough cash with me in case something is on sale and I want to load up on it. In that sense, I do spend more when I use my CC. But it isn't like I am eating more food, just being more able to take advantage of something I always buy when it costs less. So, besides the small cash-back I get from using the CC, I save far more money from being able to buy more marked-down items.


For a time in 2014 and 2015, I was able to use my CC to pay my health insurance premium on line. That greatly ramped up my cash-back for a while. But when I changed insurance companies in 2016, my new company did not accept CC to pay monthly premiums.


I have been using my CC to make other payments on line such as my auto insurance (after a check got lost in the mail last year) and car registration renewal.


One place I don't use my CC is to buy gas for my car. Any cash-back would be more than offset by higher per-gallon gas prices for using a CC. I buy gas once very 3 weeks so it isn't a frequent purchase.


I use ACH or online bank check for my monthly bills, so I rarely use my CC even with the added use the last few years. For me, the CC is a tool to enhance my regular spending, not a way to spend more or spend recklessly.

 

[Fedup]

Its always pleasant to hear both sides of a situation. It is very possible the majority on this forum doesnt overspend when using plastic, I for one find it more painful to use cash , as for being skeptical,
Here is one study its shows 20%, Because of these two reasons, people overspend when using credit cards. In one study, the authors found that participants were willing to spend $175 to throw a Thanksgiving party when using a credit card to buy the food, but only $145 when using cash. These findings have been replicated by others.https://www.psychologytoday.com/blo...it-matter-whether-you-pay-cash-or-credit-card
Im just putting it out there, I for 1 believe you spend more using a credit card.

Not usually. Yesterday I was at a sushi place in Maui. Two prices, cash $70, credit card $85. Easy easy, I had cash with me. But on this vacation I had plan to spend my kid's inheritance so I did blow some dough. I'm not a large person with a gun let alone a large retired cop with a gun, so no way I would carry $600 to Mama's fish house. So credit card was it. It was frivolous spending, but we were there for the good time and excellent service. I could have eaten somewhere for 1/5 the cost but why bother. It's YOLO time.

 

[Fedup]

Similar to the OP, I was mainly a cash-only user except for large purchases (for me, large is anything over ~$50). But about 3 years ago, I switched to a cash-back CC offered by my own bank, one I use for my everyday activities and had recently obtained online banking access earlier in 2014. Makes it really easy to pay the bill.


I began using the CC for many of my previously cash-only purchases, mainly my trips to the supermarket. I still pay cash at the supermarket sometimes, when I buy less than $30. For over $40, I use the CC, and for $30-$40 I sometimes use the CC, sometimes use cash. The result of my increased CC use is that I make only 1 monthly trip to the ATM instead of 2.


But when I go to the supermarket, I no longer have to worry about not having enough cash with me in case something is on sale and I want to load up on it. In that sense, I do spend more when I use my CC. But it isn't like I am eating more food, just being more able to take advantage of something I always buy when it costs less. So, besides the small cash-back I get from using the CC, I save far more money from being able to buy more marked-down items.


For a time in 2014 and 2015, I was able to use my CC to pay my health insurance premium on line. That greatly ramped up my cash-back for a while. But when I changed insurance companies in 2016, my new company did not accept CC to pay monthly premiums.


I have been using my CC to make other payments on line such as my auto insurance (after a check got lost in the mail last year) and car registration renewal.


One place I don't use my CC is to buy gas for my car. Any cash-back would be more than offset by higher per-gallon gas prices for using a CC. I buy gas once very 3 weeks so it isn't a frequent purchase.


I use ACH or online bank check for my monthly bills, so I rarely use my CC even with the added use the last few years. For me, the CC is a tool to enhance my regular spending, not a way to spend more or spend recklessly.

I did pay cash for 2 years before I retired just to get an idea of how much we actually spent. But now if I don't have time, I pay cash for anything less than $20.

 

[Blue Collar Guy]

Not usually. Yesterday I was at a sushi place in Maui. Two prices, cash $70, credit card $85. Easy easy, I had cash with me. But on this vacation I had plan to spend my kid's inheritance so I did blow some dough. I'm not a large person with a gun let alone a large retired cop with a gun, so no way I would carry $600 to Mama's fish house. So credit card was it. It was frivolous spending, but we were there for the good time and excellent service. I could have eaten somewhere for 1/5 the cost but why bother. It's YOLO time.

I love the "spending the kids inheritance part",

 

[Sue J]

This is the forum where people rationalize that a 2.5% WR is reasonable because the world might implode tomorrow. The last thing we need to encourage members on this forum to do is spend less. So I say if using credit cards encourages 20% more spending, fantastic!

I am curious though, for those of you who say they "pay cash", exactly what that means. Do you walk around with hundreds of dollars in your wallet? If you go to a store and want to buy something that you had not planned for, do you have to leave and find an ATM and then go back to the store?

Do you worry about losing the money, or having it stolen, or getting mugged? How frequently do you have to go to an ATM to replenish? Are you on of those annoying people who insist on writing a check in the grocery line to pay for four items? And if so, do you wait until the cashier has finished ringing everything up before you take the checkbook out of your pocketbook and look for a pen to begin filling out the check?

We pay cash for the normal "planned for" expenses like groceries, picking up a few things at Home Depot or Target or Costco, etc. DH gets his pension deposit once a month so we withdraw cash for a month. It covers groceries, our pocket cash, eating out and a chunk of cash for "other". I don't use the ATM, I go into the bank, usually the one in our grocery store or there is a full sized branch on the next block.

Usually we know what we're going shopping for and take more than enough for the errand. We both carry a cash back credit card just in case something comes up that we didn't bring enough cash for. I also keep extra cash in my car for when I stop at the store while I'm out and I didn't plan ahead. When we go for a major grocery run we take $200 but usually spend much less than that.

At first it felt very odd to be walking around with a couple hundred dollars in cash. To DH it feels very concrete. He felt like using credit cards for our normal spending was too detached, he'd rather just pay for things.

Here's a few times recently when we've used a charge card. We went shopping for a new bed and didn't know how much it would cost. We had enough extra cash at home but didn't want to deplete it so we bought the bed with a 1% cash back credit card. We also had some travel and car rental to reserve online and paid with the 1% credit card. Besides the 1% cash back the credit card (Chase Freedom) had some nice deals if you reserved through their site. There was also some cancellation protections through the credit card.

We have an Amazon credit card and use that often for Amazon purchases. We also use our debit card or PayPal for online things.

I don't worry about getting mugged or losing the cash. I am careful that when I go to the bank for a months worth of cash that I go right home.

We don't carry a months worth around in a store, just somewhat more than we need for that errand. We don't write checks for anything except property taxes twice a year so we aren't writing a check in a store. I don't think my checkbook has left the house in years. Monthly household bills are all on autopay/ACH/debit card.

I used to enjoy the credit card reward thing but DH has always been totally detached from any aspect of household finance for our entire marriage. When he retired I asked him to get involved (or at least pay attention) to our household finances and he said he would if we went to cash. It turns out that we both like this now.

 

[Scuba]

One of the reasons DH & I use our 2% cash back card for almost everything is tracking costs. I like to track what we are spending by category vs a pre-established budget. Paying with a card makes this MUCH easier. DH used to pay cash for gas, trips to the grocery store, etc. it drove me crazy because there were large ATM withdrawals that I couldn't really categorize. Now that we both use cards, if I see that we're spending more than we planned for in a particular area, we can either increase our budget or find a way to reduce what we're spending. Also, when one needs to return an item, it's much easier if purchased with a card. At most stores, you don't need a receipt to return if you used a card for the original purchase.

 

[athena53]

Not usually. Yesterday I was at a sushi place in Maui. Two prices, cash $70, credit card $85.

This differential tells me that they're not just giving you a discount because they don't have to pay 2 to 5% to the credit card company- likely they're evading taxes on the cash sales.

 

[pb4uski]

Agree that the ~18% discount is much more than one would expect for cash vs a credit card so it is suspicious... I wonder if they are running cash sales through the register or not.

 

[SumDay]

I'll just say that paying via credit card has saved our bacon more than once, like paying the deductible when I wrecked a rental car in Vegas (end of details on that one), needed to dispute charges for services rendered, threatened to dispute charges when there was a issue, etc. And we've taken many a nice trip with points & cash we've redeemed. I use it for everything.

 

[kcowan]

You obviously don't have a good grasp of just how financially responsible members of this forum are.

i have used credit cards since the days of Mastercharge, Chargex, Diners Club and probably some I have forgotten. Once in a while I have paid off less than the total balance, probably less than my fingers can count.

I am a big believer in convenience credit (and reluctantly rewards which result in higher prices), but I also agree that LBYM is inconsistent with paying interest except on mortgages.

 

[kcowan]

Yes I walk around with 100's of dollars. I went to dinner last Friday for Fathers day at a fine steak house, I had $2200 dollars in my pocket, I spent $560 including tips for valet and waiters. I haven't written a check at the grocery store since i started having money, probably around 1989. I find the person buying 1 thing and putting in a chip credit card and wait 2 minutes annoying. Mugging? Im blessed, Im a large man, Im a retired cop too. Im packing "heat" all the time, I dont worry about getting attacked by people. The muggers are weak scared social predictors that attack who they perceive are weak. Lose money you bet, i now have a wallet with a chain on it, or i might lose the entire thing. I dont go to the ATM, I have about 10k in my house, I have an alarm, cameras, locks . When the 10k goes to 5k i go to the bank. I get a free cup of coffee from the counter, and take out another 5 large. I walked around with 2 bucks in my pocket every day from 1983-1989 and i brown bagged my lunch. Starting in 1989 i graduated to never leaving the house without 5 bucks, i still brown bagged it. At the end of my career i walked around with probably 30 bucks and the brown bag lunch. I waited to live like this,now I am living my dream.

It is neat to get a glimpse into your lifestyle, BCG. i have developed habits as well. When I encounter people with cash, I assume that they are in a cash business or are in an overspending rehab program. So I offer to put the whole restaurant bill on my card and collect their cash and my rewards. Other cash shortages are covered by cashback at retailers when the amount spent is small. Late in the day, most retailers welcome cashback to reduce their float (cash cost 3% to handle at end of shift).

Use of cards is faster at checkout if the amount is under the limit to use an RFID, passing the card over the device without signature or PIN. No waiting to make change. Plus the card provider will send an email reminder a few days before payment is due.

 

[audreyh1]

It's never taken a machine 2 mins to read my chip card. Maybe 10 secs at the slow registers. Usually much less.

I do a lot of self checkout - whenever I can. Cash at self check out is far more cumbersome than plastic.

 

[Fedup]

This differential tells me that they're not just giving you a discount because they don't have to pay 2 to 5% to the credit card company- likely they're evading taxes on the cash sales.

I have no idea. The owner is a white male American sushi chef. I was surprised they already have 2 bills ready for me. It looks like a legit place near the Ritz Carlton. How do the IRS catch these things?

 

[Fedup]

Agree that the ~18% discount is much more than one would expect for cash vs a credit card so it is suspicious... I wonder if they are running cash sales through the register or not.

We left the cash and went. I didn't stay around to see if it was running up. But I did see a register.

 

[Koolau]

Yes I walk around with 100's of dollars. I went to dinner last Friday for Fathers day at a fine steak house, I had $2200 dollars in my pocket, I spent $560 including tips for valet and waiters. I haven't written a check at the grocery store since i started having money, probably around 1989. I find the person buying 1 thing and putting in a chip credit card and wait 2 minutes annoying. Mugging? Im blessed, Im a large man, Im a retired cop too. Im packing "heat" all the time, I dont worry about getting attacked by people. The muggers are weak scared social predictors that attack who they perceive are weak. Lose money you bet, i now have a wallet with a chain on it, or i might lose the entire thing. I dont go to the ATM, I have about 10k in my house, I have an alarm, cameras, locks . When the 10k goes to 5k i go to the bank. I get a free cup of coffee from the counter, and take out another 5 large. I walked around with 2 bucks in my pocket every day from 1983-1989 and i brown bagged my lunch. Starting in 1989 i graduated to never leaving the house without 5 bucks, i still brown bagged it. At the end of my career i walked around with probably 30 bucks and the brown bag lunch. I waited to live like this,now I am living my dream.

I do charge most things, but like having enough cash to more than cover anything I'm likely to buy (or need) when I'm out and especially when I'm traveling. Too often, I've been someplace and my card is declined for no apparent reason. I have more than one card, so that's usually not a problem. Still, almost no one declines cash. Our first year in the Islands, we had an 18 hour power outage, Island wide. Those with cash were able to purchase dwindling supplies at stores that stayed open.

I always thought that when traveling, I should have enough cash to buy a full set of tires or maybe talk a mechanic into starting a transmission job if need be. I know there are risks, but it's a bit like insurance. I'd rather have it and not need it than need it and not have it.

Regarding being a victim of a mugging or other street crime, unless you are a "flasher" (of cash) you're no more likely to be a victim just because you carry a lot of cash. You might lose more if you are robbed but no one knows what you're carrying unless you somehow tip your hand, so to speak. Dress like a local person and don't flash (anything) and know your surroundings.

I love to use credit (when there's cash-back) BUT Cash is still king - and may always be. YMMV

YMMV

 

[Blue Collar Guy]

It is neat to get a glimpse into your lifestyle, BCG. i have developed habits as well. When I encounter people with cash, I assume that they are in a cash business or are in an overspending rehab program. So I offer to put the whole restaurant bill on my card and collect their cash and my rewards. Other cash shortages are covered by cashback at retailers when the amount spent is small. Late in the day, most retailers welcome cashback to reduce their float (cash cost 3% to handle at end of shift).

Use of cards is faster at checkout if the amount is under the limit to use an RFID, passing the card over the device without signature or PIN. No waiting to make change. Plus the card provider will send an email reminder a few days before payment is due.

We have friends that we go to the diner with. They use their credit card and we give them the cash for our half. The first time it happened they asked would ypou mind if we used our card? We said of course not, I believe its so they earn points/cashback. This arrangement makes me happy as i would have paid in cash anyway. I am equally happy for them as they get a benefit from using their card.

 

[athena53]

It is neat to get a glimpse into your lifestyle, BCG. i have developed habits as well. When I encounter people with cash, I assume that they are in a cash business or are in an overspending rehab program. So I offer to put the whole restaurant bill on my card and collect their cash and my rewards.

Years ago DH and I met with a large group of travel-aficionado friends in London for dinner at Simpsons-in-Strand, which we knew would run about $100 pp. A local who lived there, a barrister, invited us to his flat first- it had floor-to-ceiling view of the Tower Bridge and he provided champagne and hors d'oeuvres. After a wonderful dinner, we all put cash on the table and our local friend put it all on his British Airways credit card and took the cash. We were happy to see him get the miles!

 

[sengsational]

...But on this vacation ...

We all know that vacation money is not the same as "real" money.

Late in the day, most retailers welcome cashback to reduce their float (cash cost 3% to handle at end of shift).

I didn't know that. I kind of wondered why they kind of "push" the cash back at the grocery stores when you use a debit card to pay.

 

[Blue Collar Guy]

It's never taken a machine 2 mins to read my chip card. Maybe 10 secs at the slow registers. Usually much less.

I do a lot of self checkout - whenever I can. Cash at self check out is far more cumbersome than plastic.

Come with me to my grocery store. I witnessed this scene this very afternoon. Tropicana orange juice on sale 3 dollars. The nice young lady in front of me, maybe 25 years old. It was rung up, she then opened a handbag It was big enough to hold a beach towel. I saw sunglasses being shoved around , a pack of cigarettes being tossed to the side, she then picked up a zippered clutch bag opened it up, flipped through some paper money. She then zippered the bag, fished around some more and came up with another wallet. This one had a snap clasp, It was one of those designer ones IDK if it was a knock off or not. She opened it, and thumbed thru a few sections and retrieved her desired card. She then swiped the card. The cashier asked debit or credit, she said credit, cashier then said ok swipe again. She swipes again, nothing happens. Cashier asks does it have a chip? Yes it does, ok put it in the slot. Customer examines the machine and asks where is the slot. Cashier turns the card reader asks the customer for the card and pushes it in. The customer who is a bit indignant almost immediately removes the card. Guess what it wasnt in the card reader long enough. The cashier twists the card reader back toward the customer side and says you need to reenter the card. This nice young lady is no longer meeting my criterion for nice. begins to question if she will be charged twice now for this 3 dollar on sale orange juice. At this point im on page 5 or 6 of the star magazine that i had pulled from the rack to kill time while as you say the 2 second transaction should take. After a little back and forth , the customer reenters her chip credit card into the machine. She takes the plastic stylus and signs her name. She needed help to hit the green ok button.
Good thing I wasnt buying ice cream, I would have needed a fresh one. Oh, by the way, this was the express 10 item or less line. Now my turn , 3 bottles of Snapple iced tea, 5 bucks. Hand her what was at one time a crisp 5 dollar bill. By this time its a bit soft as my hand was getting clammy from holding onto it for so long during this non 2 second transaction.

 

[Dave J]

It is a game for us to maximize our rewards on cards. We put the money we get into what we call our slush fund(a checking account at Fidelity) and spend on things we normally would not. Last year we went to see Paul McCartney in concert (little over $500 for a pair of 16th row seats, worth every penney to see my wife smile all 2 1/2 hrs). Also got an Good digital camera, a S7 phone for me and a S6 for wife. And we still had money left over from the $3000 we got for free(just a little work). That was our highest year to date, and we normally "only" get $1000 to $1500 per year.

 

[athena53]

That was our highest year to date, and we normally "only" get $1000 to $1500 per year.

Sometimes I feel a little guilty- I average about $100/month cash back and in one memorable year I got a total of 150,000 AA miles for opening an AA Visa and an AA Mastercard- more than enough for a nice Business-Class jaunt for DH and me to Europe. I read about the people paying 24% interest on their balances and know part of that pays for my perks- but I don't feel guilty enough to start paying cash.

 

[Koolau]

It is a game for us to maximize our rewards on cards. We put the money we get into what we call our slush fund(a checking account at Fidelity) and spend on things we normally would not. Last year we went to see Paul McCartney in concert (little over $500 for a pair of 16th row seats, worth every penney to see my wife smile all 2 1/2 hrs). Also got an Good digital camera, a S7 phone for me and a S6 for wife. And we still had money left over from the $3000 we got for free(just a little work). That was our highest year to date, and we normally "only" get $1000 to $1500 per year.

Speaking of games with cards, I saw a movie UP IN THE AIR starring George Clooney. He has this "thing" about finally reaching 10,000,000 miles on his credit card. So he charges everything during his j*b - meals, flights, hotels, etc. To him, it's not what he could spend the miles on, it's about being that exclusive (He states that "Fewer have reached 10 million miles than have walked on the moon." Naturally, complications arise and make him wonder if he has spent his life's quest on the right things. YMMV

 

[Sunset]

Come with me to my grocery store. I witnessed this scene this very afternoon. Tropicana orange juice on sale 3 dollars. The nice young lady in front of me, maybe 25 years old. It was rung up, she then opened a handbag It was big enough to hold a beach towel. I saw sunglasses being shoved around , a pack of cigarettes being tossed to the side, she then picked up a zippered clutch bag opened it up, flipped through some paper money. She then zippered the bag, fished around some more and came up with another wallet. This one had a snap clasp, It was one of those designer ones IDK if it was a knock off or not. She opened it, and thumbed thru a few sections and retrieved her desired card. She then swiped the card. The cashier asked debit or credit, she said credit, cashier then said ok swipe again. She swipes again, nothing happens. Cashier asks does it have a chip? Yes it does, ok put it in the slot. Customer examines the machine and asks where is the slot. Cashier turns the card reader asks the customer for the card and pushes it in. The customer who is a bit indignant almost immediately removes the card. Guess what it wasnt in the card reader long enough. The cashier twists the card reader back toward the customer side and says you need to reenter the card. This nice young lady is no longer meeting my criterion for nice. begins to question if she will be charged twice now for this 3 dollar on sale orange juice. At this point im on page 5 or 6 of the star magazine that i had pulled from the rack to kill time while as you say the 2 second transaction should take. After a little back and forth , the customer reenters her chip credit card into the machine. She takes the plastic stylus and signs her name. She needed help to hit the green ok button.
Good thing I wasnt buying ice cream, I would have needed a fresh one. Oh, by the way, this was the express 10 item or less line. Now my turn , 3 bottles of Snapple iced tea, 5 bucks. Hand her what was at one time a crisp 5 dollar bill. By this time its a bit soft as my hand was getting clammy from holding onto it for so long during this non 2 second transaction.

Everyone can find an example of a bad shopper.
I have certainly seen where the purchaser paying in cash, hands over some bills, oops not enough, so then fishes for the change, counting out the coins to the penny. Then hands them over.
The clerk then has to count out the coins as well, and uh oh, too many coins, so the clerk hands back a coin or two, (or says they need 4 more cents), both of which take another passing interaction.

And I didn't even mention the cases where, they don't have enough cash, so have to pick something to NOT buy, the clerk has to fish it out, and subtract it, then see if the total is low enough, and if not repeat, or add that back in and take out something else.

Me, I always have my card ready, stick it in and 2 seconds later it beeps to take out and I'm done, no worries about the total.