One thing I’ve found is that bringing my own lunch has really helped my food budget. It costs me an average of $5 to buy lunch at work. Bringing my own sandwich costs in the neighborhood of $1. That ends up saving me about $80 per month. It’s not a massive amount of money, but on a tight budget, it can certainly help.

When in the office I always use cash for lunch every day and the when at the bar with Andrew and company. I use the debit card for the grocery store, wal-mart, and any other store purchases, so I can see the expense immediately in my bank account. It does help me budget better in that regard. I guess when I really analyze it deeply, I think I will have to do a better job budgeting when I stop travelling so much. I am out so much that I incur very little personal expenses except for on the weekend. I would definitely spend more if I were in town more. The debit card/cash defintely helps there. And I still like to use cash, as I always have.

The transparency makes it a lot easier to avoid overspending and eating out too much. No more “It’s only 15 bucks.” I can look in the envelope and tell exactly how much of my remaining food budget 15 bucks really is.

For people who travel for business a lot, I agree the credit card can make sense. That was one of the reasons I started using my card so heavily in the first place. The cash back can add up a lot faster when business expenses are flowing through the card. And I agree, fronting the bill for a big business expense on a debit card can be very unpleasant.

My point definitely wasn’t that credit cards are intrinsically bad. I think in a lot of circumstances, it can make sense to use them. I just don’t think most people get enough cash back from their own expenses to justify using the credit card. You need to be getting something else from the card to make it worth using.

I will comment that the credit card is very useful if you travel a lot. Because I travel a lot for my job (I usually incur ~5k a month in travel expenses), getting the 1% cash back on money I get reimbursed for works very well. My discover also gives me 5% back on select purchases every 3 months. I love it for that. For example, during the months of June- September, I recieved 5% on hotels and gas. Well when I drive to Knoxville, stay there two weeks and spend $800 on hotels and $500 on gas, I get reimbursed $1300 for my $1300 in expenses and also get $65 free money form the credit company. That trip just gave me a nice dinner, savings, etc. for free. I bought a new truck 3 months ago and got nearly $1200 off the top from my credit card, nearly all of which came from my charging during travel (it was 3% credit). In fact, I charged over $38k during the last year on the card. I also do not get reimbursed until after I return form my trip, so dropping 2k on a trip with a debit card/check/cash would be hard to do every week.

So I have gotten extremely useful benefits from my credit card. I agree with your comments and suggestions; just thought I’d throw in my experiences.

I’ve thought about looking into getting a rewards debit card, but I decided that I don’t care enough to bother with it. If my bank ever offers me something like that, I might take it (depending on the terms), but I’d rather have the convenience of my current bank than switch banks for 1% cash back.

As for Renee, I don’t think there’s much you can do there. People generally don’t change their views on money until they have to, unfortunately (and sometimes not even then). Hopefully she’ll eventually decide that she needs to get her finances in order, but it’ll be her decision when it happens.

Good to see you posting again.

I’m pretty much with you on this one. Credit cards are a useful tool, and definitely a convenient way to spend. They’re also a convenient way to live beyond your means and slide into debt. If you’re disciplined with your finances they’re not dangerous; but if you’re disciplined with your finances, you don’t need one anyway.

Envelope budgeting with cash remains the most effective way to stick to a budget ever, as far as I’m concerned.

Also, my debit card has the option for me to run it as a credit card and sign a receipt instead of entering my PIN. If I do that, I get my 1% cashback AND it comes straight out of my checking account. There’s a slightly longer delay between the transaction and the posting, but not by much. It also makes it possible to overdraft.

I wish I could chop up my girlfriend Renee’s credit cards. Easy access to them has helped her decide it’s easy to live in debt. She knows it’s a bad idea, but it hasn’t yet materially affected her life. Ah well.