Thursday, December 6, 2012

Simple Christmas idea #6 -- Avoid using credit cards for gift purchases

Money, money, money...

Why would internet-savvy, credit and ATM-card-loving people want anything to do with cold hard cash? It's so inconvenient!

Well... if I give it a bit of thought, cash isn't so bad, really. True, I have to stop at a bank or ATM to get it, but once it's in my wallet, I am more aware of how much money is visibly passing through my hands. Handing over a card makes it really easy to lose track of what's being spent, especially during this Christmas season.

Then there are those nasty little mostly hidden costs called service charges that come with bank and credit cards. Every time I pay for something with my ATM card, I get dinged; a small amount, yes, but over time, small amounts accumulate. Even worse is the interest rate on credit cards. Did you know that most retailers, in order to pay for the privilege of credit sales, have to mark up their prices around 3%? So perhaps those places that give me a deal when I pay cash aren't really giving me a deal -- maybe they're just charging me the true price "before credit," if there is such thing as a true price.

Then there's the whole credit addiction thing. We caught a glimpse of the high cost of credit in 2008 with the North American financial meltdown, and we're seeing more with the European debt crisis and the U.S. fiscal cliff in the news these days. Canada has plenty of debt, too. For a lot of of us all over the world, it's much too easy to go overboard, but charges listed on a piece of paper don't impact us as much as empty pockets do.

The thing about paying cash is that it forces me to live within my means. There have been times where I've walked into a store sans credit card, attracted by something I didn't really need, and when I looked into my wallet, I discovered that I didn't have the necessary cash. By the time I had the money in hand, that purchasing impulse was gone because I realized that the item wasn't necessary -- or in keeping with my desire to live simply and sustainably. Cash (or its lack) can help in the category of "checks and balances against living beyond the planet's means to sustain life."

If you are buying gifts, using real money from your pocket instead of credit cards also makes January much nicer! Try on a cash-only Christmas for size, and see how it feels... and don't forget to put a few dollars (or more) into a Christmas charity kettle during your travels...

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