How do you currently spend money? Do you use cash envelopes like a lot of the DFC community advocates? Do you use a debit card? Or do you even use travel hacking credit cards to earn points while you spend?
I used to not care in which medium I spent my money. Now, I make it a point to use travel hacking credit cards only. Here are three reasons why!
First, paying with a cash or even a debit card provides no value to me. There is nothing I receive from paying with cash or a debit card. I am not in a cash tight position. Building a credit card balance in which I pay off every week earns me points I can redeem for travel credit and/or other rewards.
Second, I don’t have any issues with budgeting. I know a lot of people in the Debt Free Community are all about cash envelopes. Yes, you can make a cash envelope look pretty, but in my eyes there is a larger issue if you can’t budget without putting cash in an envelope. I would even go as far as to argue it is easier to budget when spending on a credit card and utilizing certain apps.
Last, paying with cash doesn’t allow you to build up any sort of credit history. If you want to invest at some point in your life, it is important to have a credit history. The largest hit to my credit score right now (preventing me from being in the low 800’s) is my credit history. Paying with cash and/or debit cards doesn’t allow for your credit history to build.
There are many other reasons to not pay with cash, but I wanted to outline some of the most important. I plan to continue paying only in credit cards for the rest of my life. There is no reason not to, at least from my perspective. It is very important to know thyself before making this decision. Don’t switch to credit cards if you have no self discipline in your spending habits.