Credit Cards: My Failed Experiment


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Back in April, we went off the cash plan.

In the two years prior to that, we paid down about $40,ooo in debt by completely forgoing credit cards.    We went on a strict budget and all of our daily expenses–other than gas for the cars–was paid in cash.   The only other exception was anything bought on the internet.  Amazingly enough, Amazon doesn’t take cash.   When that happened, the amount we spent online was taken out of the cash supply and set in a box until we could get it back in the bank.

No other exceptions.

In April, we decided that we had changed our relationship with money and could–judiciously–move back to credit card use, to take advantage of the rewards.    We’d still use the same amount we had budgeted for groceries,  clothes, and everything else.   I set up an automatic payment for the budgeted amount, so we could use the card for our daily spending and the bank would automatically pay it off every month.   What could go wrong?


We are not predisposed to be able to use credit cards well.   It’s just not good for us.   Credit cards  just don’t feel like real money going out.    When we were using cash for everything, we could see when money was running low, and we’d adjust our spending to stretch it out as needed.   With plastic, it just became too easy to keep spending.

For the first couple of months, it was easy to overlook the problem.   We paid my son’s vision therapy on the credit card, to get a discount on the therapy and cash in on the rewards program.    That was around $4,000.  Combined with the regular spending, it took us a couple of months to get it all paid off and current.

This month, we’ve managed to overshoot our monthly budget by $500.    We’re only halfway through the month.

This weekend, we had a fairly unpleasant conversation about money.   In the end, we decided to go back to cash-only.   It works for us, in a way that credit cards don’t.   Credit cards were a failed experiment.  We’re going back to what works.

Have you ever had to switch from cash to credit cards and back?  How did that work out?

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    1. Looks like to me this is a WIN, not a failure.

      1- You tried something new
      2- You recognized fairly early on that it wasn’t working for you
      3- You discussed it with your spouse (yes, unpleasant, but necessary and NOT avoided due to its unpleasant nature)
      4- You both AGREED to change your actions
      5- Presumably you will continue with the changed actions, which will resolve the problem

      This is NOT a failure!

    2. Jason, we’ve never done all cash, but we made the switch from credit cards to debit cards only and that works much better for us. The reason, I think, is this: our credit card limit is much higher than our bank balance (or in your case, cash on hand). Having that lower threshold and knowing that we will literally run out of money if we overspend (vs. running up a credit card balance) seems to keep us in check.

      Good work on your experiment. I agree with gharkness that this was a win.

    3. I am completely off of credit and using only cash and debit cards. I am much better at budgeting when I use cash also. I find that even with my debit card I tend to swipe mindlessly, so I’m not sure I will go back to credit cards anytime soon.

    4. I’ve never fully gone to all credit card spending, for the fear of having this exact thing happening. I track our spending almost daily, and the lag on credit cards showing up in transactions and then the payment cycle would make it harder to make sure we’re staying in line. I will do the occasional transaction on the credit card and then immediately pay it off, but to do that for every little thing we currently do for spending would drive me nuts.

      Glad to see you realized it wasn’t worth it in time before it really hurt you.

    5. Humm….we do the “excel” spreadsheet. This means that nearly every expense needs to find a home in the excel spreadsheet.

      Hence, no matter if we are using cash, atm, etc. The charge has to make its way on to excel. Thus it becomes really clear when we are going over.

      It would simplify our situation to use cash. Perhaps you figured out that cash is the best way to simplify your life and achieve your financial goals.

    6. I agree with gharkness. You realized you had a problem before, found a way to defeart, carefully tried your way back, and discovered that you have to stick with your method. At least you HAVE a method that works successfully for you!

    7. *puts on devil’s advocate hat*

      So you put $4,000 of vision therapy on a credit card and ended up paying interest on it.

      How else were you going to pay for it?

      Where is the disconnect from swipe credit card –> transfer money in spreadsheet to “credit card” –> pay off credit card?

      Or are you saying you had the option to not pay all at once, but decided to anyways?

      Don’t blame the tool, blame the gardener.

      I do give you props for defeating debt, and then being careful about dipping your toes back into the pool. That’s an intelligent way of going about it. And it credit cards aren’t for you, it’s not really a big deal. I just hate when people blame the credit card and not the person swiping it.

      • Oh, I’m completely fine with the decision to charge vision therapy.

        Paying the entire bill up front knocked $140 from the bill. I also earned $80 worth of rewards. That was a good financial decision.

        I just went back and double-checked. Not a single penny of that, or our daily spending has made it past the interest grace period. That’s $0 in interest spent.

        The bad decision was slipping on the discipline for our daily spending when we went to the credit card. We went over budget and have to tap into some of our savings accounts and side money to bridge the gap.

    8. We are on mostly cash and it works a lot better for us. We use credit card for online purchases and try to minimize it for offline use.
      We spend quite a bit less with the cash allowance plan. Once we’re out, we just wait until next week.

    9. We only use credit cards. I don’t know if we are spending more than we would if we used cash, but we stay within budget and it’s easy for me to keep up with all of our spending. To each their own. 🙂

    10. What I did, when I was learning to use a credit card, was use cash envelopes. So I had $20 for gas per week (it was a while ago), I’d get cash and the amount I used was moved from the gas envelope to the deposit envelope. Nothing in the envelope, no spending. You could use cards for things that are fixed or you won’t be tempted with, like utilities, cell phone and gas and cash for anything you will be tempted with.

    11. It’s good to know what works best for you.

      We put some stuff on credit cards, but we are careful. I know how easy it is to get back into that old routine.

    12. I know exactly what you’re talking about and am in fact right in the middle of this as well – I went off them for a long time, then used them responsibly for about 8 months, now am back in over my head. My habits need to change, and i’ve been working on that for this month!

    13. The lived your mistake twice and then what changed my views was an AMEX gold card. The fact that I HAVE to pay it off at the end of the month makes it feel more like a super debit card. I also do multiple weekly payments to it so I am JUST using it for the protection and points.

      Ever given it thought?

      • I haven’t, but I’m not sure it would help. With a limited supply of cash, my wife and I can each see the money disappearing and know when too much is spent.

    14. I was on a cash only budget for about 6 months 3 years ago. I found cash budgets very restricting because all my bills fall in the beginning of the month and it’s so easy to spend. It literally burns a hole in my pocket. So I use my credit card for everything. Credit card used coupled with discipline and a zero sum budget is the way to go. Mrs. YfS and I are going to Europe based off reward points and we spent the money on the same things we were going to buy with cash.


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