Buying things with cash

[Simgar988]

When I buy something of a larger magnitude, I like to buy it with cash. I like to pay for it upfront, hand the guy over the money and now own that product. I'm a college student and haven't had experiences like buying a house or a nice car, but when I bought my iPad (wifi.. It's sad I have to clarify bc you know why) and my flatscreen tv I always pay cash upfront.

A basal reason is because I don't like owing people things, but the more I got to thinking about it I realized how much it would suck to still be paying off a 1st gen iPad while the second one is on the shelves.

I was curious. What do you guys and gals do, and are there benefits to buying things in payments? Does that typically always include some sort of interest unless otherwise specified?

Just interested in thoughts and discussion!
Cheers!

 

[floyde]

When you get older your parents stop giving you money, so sometimes purchasing stuff in payments is the only way to acquire goods without having to go without food . Other than than that, it is always better to just pay the full amount once.

 

[senseless]

Good life plan. I've never financed a car and always bought what I could afford to pay for at the time.

 

[iggypod]

Good life plan. I've never financed a car and always bought what I could afford to pay for at the time.

I subscribe to this train of thought as well (cash being king).

Financial peace = piece of mind.

 

[Rodimus Prime]

Me personally I charge almost everything to my credit card then pay it off in full at the end of the month.
It is basically the same thing. I use the CC for the cash back.

Mostly you have to look at is their anything to gain. For example if you can go for the 12 months same as cash you can sit on that money for 12 months. Just make sure you have it to pay it off at the end.

 

[RawBert]

I'm all about debit or cashola. I despise credit cards. I have one for emergencies, but never use it.

Look at the ad below. It's likely for a credit card. They're trying to hook you.

 

[sushi]

Cash is king. Definitely true.

Live within your means. Always a good idea.

In my case, I tend to use my credit card for all purchases possible. There are various reasons for this to include tracking expenses, but it also allows me not to carry cash on my person. I also find, that if I use cash I have no idea where it went.

 

[.Andy]

When I buy something of a larger magnitude, I like to buy it with cash. I like to pay for it upfront, hand the guy over the money and now own that product.

Depending on the terms of the purchase you might be doing yourself out of a bit of cash by paying up front. If you can utilise an interest free credit period (either with a credit card or buy now pay later scheme) you can save your cash in the interim and use it to accrue interest in a savings account. However this only applies if you have the self control to save it and/or the income to pay off the item later however. Otherwise getting slugged when the interest kicks in most certainly doesn't make it worthwhile.

My credit card has a low cap and is tied to my bank account. It automatically pays the full amount off when it's due. A sure way to have no problems.

 

[kellen]

I do the opposite. I pay for everyday things like food coffee and drinks with cash. The big things like laptops, tvs and the like I charge. I feel safer, doubly so if using Amex.

 

[RaceTripper]

I use two cash-back rebate credit cards (Costco Amex, Chase Freedom MC) for everything, but pay my bills for them in full each month. When I get the bills I make the minimum payment, and then I pay the balance the day before it's due. That way my money sits in my interest bearing checking account as long as possible.

Between my cash rebate credit cards and my interest bearing checking account I get about $1200 cash back in my pocket every year, and pay $0 in interest on credit cards.

Cash is not king for buying, but it is king for receiving.

 

[CalBoy]

Me personally I charge almost everything to my credit card then pay it off in full at the end of the month.
It is basically the same thing. I use the CC for the cash back.

I also extensively use credit cards for this reason and for the fact that they offer free purchase protection programs like extended warranties or theft protection.

By using my credit cards for as many purchases as possible and paying off the entire balance each month, I basically get an interest free loan for about 25 days, cash back, and lots of consumer protection perks. It's also harder to recover from loss if your cash is stolen whereas with most credit cards, you can typically put a stop things pretty quickly.

The key is to make sure you are diligent and make your monthly payments on time and in full. If you can't do this, then maybe debit cards are for you.

 

[EricNau]

I use my Credit Card for virtually all my purchases, but pay the balance in full each month. Therefore, it's like using cash, but I also earn cash-back, increase my credit score, and my card offers purchase protection and free extended warranties. Oh, and it's safer and more convenient.

But I couldn't agree more: it's always wise to buy and pay in full.

 

[Alag28]

lets also mention that these CC cash back programs u must spend A LOT to even redeem 100 bucks or so through points. so...

 

[RaceTripper]

lets also mention that these CC cash back programs u must spend A LOT to even redeem 100 bucks or so through points. so...

That's not really so important a detail, since there's no penalty if you don't spend a lot, unless you pick a card that has an annual fee. On my Amex there is no minimum cash back amount; it's whatever you accrue after a year. On my MC, I can get cash back after accruing $20 (i.e. spending $2K).

 

[Rodimus Prime]

lets also mention that these CC cash back programs u must spend A LOT to even redeem 100 bucks or so through points. so...

Meh to me I get money back for what I buy anyway.

I have Amex cash back and before I lost my job my average monthly bill was about 1000 a month. I routed gas, food, my cell phone and Uverse bill all threw it.
At the time gas and food were about a $100 per week. Uverse/Cell phone was anohter $180 per month That was a set 500-600 per month in fix cost. That is an easy build up of free cash back. I want to say I got back around $240 after a year. Now I spent around 12-13k.

This year I am putting my school on my Amex card and that ramps me up real quickly to bonus cash back. Hell with my computer and school on it that was a free 9k that I was going to spend any how. Might as well get the free cash back any way on it.

Amex cash back is like 1% on Gas food and pharm and 0.5% on everything for the first $6500 per year. After that it is 5% and 1.5% respectively. Not to bad of a deal. The 5% generally better cash back than any gas card gives you.

 

[trekkie604]

I pay for everything by CC and pay the bill off in full each month. That way I get reward points and don't have to wait for change at the till

Plus, at places like Starbucks where they charge a really tiny amount I don't even need to enter my VISA PIN or sign the receipt. Way faster than cash.

 

[Mr Kram]

credit cards offer cash back or rewards, plus they often offer extended warranties and other bonus programs.

 

[Alag28]

That's not really so important a detail, since there's no penalty if you don't spend a lot, unless you pick a card that has an annual fee. On my Amex there is no minimum cash back amount; it's whatever you accrue after a year. On my MC, I can get cash back after accruing $20 (i.e. spending $2K).

yea its not an important detail at all Cash back is a bonus so it never hurts but i see what your saying

 

[RaceTripper]

Amex cash back is like 1% on Gas food and pharm and 0.5% on everything for the first $6500 per year. After that it is 5% and 1.5% respectively. Not to bad of a deal. The 5% generally better cash back than any gas card gives you.

You might look at the Costco AMEX: 3% for gas and dining, 2% for travel, and 1% for everything else, all starting at the first dollar spent. And your Costco membership fee covers the annual Amex fee. On top of that I have the Costco Executive membership, so I get an additional 2% rebate on what I spend there.

Not to mention, Costco rocks!

 

[Alag28]

Meh to me I get money back for what I buy anyway.

I have Amex cash back and before I lost my job my average monthly bill was about 1000 a month. I routed gas, food, my cell phone and Uverse bill all threw it.
At the time gas and food were about a $100 per week. Uverse/Cell phone was anohter $180 per month That was a set 500-600 per month in fix cost. That is an easy build up of free cash back. I want to say I got back around $240 after a year. Now I spent around 12-13k.

This year I am putting my school on my Amex card and that ramps me up real quickly to bonus cash back. Hell with my computer and school on it that was a free 9k that I was going to spend any how. Might as well get the free cash back any way on it.

Amex cash back is like 1% on Gas food and pharm and 0.5% on everything for the first $6500 per year. After that it is 5% and 1.5% respectively. Not to bad of a deal. The 5% generally better cash back than any gas card gives you.

i try to do the same thing to just heap points fast as possible..i was going to pay my tuition off with my BOA AMEX card but my school was going to charge me 5% for making a CC payment...blah

hell i sometimes tell my dad to use my CC to pay big things and just give me the cash.

 

[NoSmokingBandit]

I always pay cash if possible. I've owned 3 cars and i've not had to borrow for any of them. Granted, they werent great cars, but next summer i plan on buying a 2012 focus (assuming it doesnt end up being junk, which i dont expect) and i'll have enough to pay it all up front. I wont because i'll need to build up good credit for when i buy a house, but it makes me much more comfy knowing that i could pay cash for it if i needed to for whatever reason. So i'll be 21 and able to buy my first *new* car with cash. I dont make a ton of money, nor do my parents pay for anything, i just happen to manage my cash a bit better than most people my age.

Then there is my sister who would charge a pack of gum on her credit card if it were more convenient for her.

 

[steve2112]

I've never heard any wealthy person say they made their fortune with cash back rewards. In the long run, it doesn't matter much. Plus, there are debit cards with cash back and perks.

Personally, I pay cash for everything. A mortgage is the only debt I will incur now. I've been through debt hell and I'm not going back. It's fine and dandy to finance stuff and charge everything until something happens such as losing your job.

 

[Mr Kram]

I've never heard any wealthy person say they made their fortune with cash back rewards. In the long run, it doesn't matter much. Plus, there are debit cards with cash back and perks.

Personally, I pay cash for everything. A mortgage is the only debt I will incur now. I've been through debt hell and I'm not going back. It's fine and dandy to finance stuff and charge everything until something happens such as losing your job.

i doubt anyone here is saying to accumulate debt to reap the reward of cash back. you pay your balance every month and the cash back is a bonus. i guess it may seem insignificant to some, but i usually get about $1800 a year from my bank.

 

[RaceTripper]

I've never heard any wealthy person say they made their fortune with cash back rewards. In the long run, it doesn't matter much. Plus, there are debit cards with cash back and perks.

Personally, I pay cash for everything. A mortgage is the only debt I will incur now. I've been through debt hell and I'm not going back. It's fine and dandy to finance stuff and charge everything until something happens such as losing your job.

The point to it is to pay off the balance each month; otherwise, the cash back bonus is negated.

It does matter. No one is claiming to get rich from it, but it is cash, and funds one of my vacations every year.

 

[CalBoy]

I've never heard any wealthy person say they made their fortune with cash back rewards. In the long run, it doesn't matter much.

It isn't really so much about becoming wealthy (because really, you can't become wealthy by spending your money on consumable goods), it's about a fringe benefit that can add up to be quite substantial for most households. Especially when utility bills, insurance (mostly home and auto), and phone service are factored in.

I definitely think a couple hundred bucks at the end of the year are a nice perk, and without the credit cards I would basically have spent more to get the exact same thing.

Plus, there are debit cards with cash back and perks.

Debit cards don't let you "float" money for nearly a month though. I really like that about credit cards, especially when combined with a high-yield savings account. I've basically been able to convert my 3% cash back rate (in critical categories on Amex) into something closer to 4%.