Why I don’t shop with cash

When you’re trying to avoid impulse purchases, I often recommend putting away your credit cards and paying for everything with cash.

While I do believe this is the best way to prevent overspending for most people, it simply does not work for me, personally.

When I have a bunch of cash in my wallet, I’m likely to spend it much easier than taking out my credit card to pay for something. For some reason, watching actual cash being spent doesn’t bother me as much as charging something to my credit card.

I have been very disciplined with my credit card use for the last 4 years and actually try to use it for every purchase that I need to make (to get cashback). I pay off my bill in full every month so I never have to pay interest.

The times that I do have cash on me, I find reasons to spend it.

My excuses:

– Oh, only $2 for a coffee? That sounds fabulous!
– $5 for 2 boxes of almonds from the boy outside the grocery store? Sure!
– Does Elliott want to ride the mechanical horse in the mall? That’s cute… here’s $1!

I don’t know what it is about cash, but I just can’t seem to hold on to it very long – and that’s why I prefer to shop with credit.

Before I had a credit card, I would go to the bank all the time to take out cash. That cash would be spent on who knows what, but I am certain it wasn’t on necessities!

I am confident that I don’t spend more using credit than I would with cash only.

Where I use credit vs cash:

Here’s what I often use my credit card for:
– Groceries
– Clothing
– Haircuts
– Gifts
– Gasoline

When I do use cash, it’s usually for these:
– Entertainment
– Tips
– Craigslist or Kijiji Purchases

I do strongly believe that using cash is the absolute best way to avoid overspending for MOST people. I am just not one of those people.

Paying with credit only works for me, but it may not work for you.

If you are constantly overspending on your credit card, consider switching to cash only for a while to see how you do with that method of payment. You may find that you spend much less when you only have the cash to spend (or, you may spend more, and determine that credit only is best for you).

Do you prefer to shop with cash or credit?


  1. Arteme

    I feel exactly the same way, only I use my debit card for essential services, and never cash. As soon as I have cash in my wallet, it’s gone. Usually on tiny impulse purchases that add up.

    I don’t pay for debit transactions with my bank, and I can check the account later to itemize my purchases. It’s a hassle to pull out my card to spend less than $10, so I simply don’t. That’s what works for me!

  2. Pamela @ FabulousSavings.ca

    I agree with you – the minute I have cash in my wallet, I feel like spending it! I mainly use my debit card, however I am considering switching over to a cash-back credit card. Do you have one you would recommend? Thanks 🙂

  3. Tania

    I use credit for almost everything now. I got a Walmart Rewards card. I’m saving the rewards for Christmas toys for the kids. Sure, I could afford to buy them Christmas presents, but if I can get some for free, why not?

    And if I’m using debit I have an RBC Optimum account, so we’re earning Optimum points as well. Just for switching to it and making it our main account we got 50,000 points. Again, we’ll save those up for bonus redemption in November when all the electronics are out. Merry Christmas again!

  4. Mesenga

    I’m very disciplined with my credit card (we pay it off every month) so we use that for everything. I barely have cash on me… I guess it’s easier to just have a card you can actually tally up how much you’re spending. And the best part is the Walmart rewards I get to put towards purchases 🙂

  5. Jennifer

    I am the fair opposite. I find it so much easier and more prone to impulse purchases if I use the credit card. We have a spending only debit card account (that is all of our loan payments etc come out of one account and then an account for spending) so we can only spend what we have in that account. It keeps us honest lol

  6. Eve

    I prefer credit to cash and recently changed to a cash back card.I even buy Shoppers gift card with my credit card for extra points .I prefer credit to debit but I am very disciplined and pay off monthly. I realize that people who cannot pay off monthly should use cash or debit. But I want extra money back towards groceries or other purchases.and do not want a specific store card for my general purchases.The interest charged is immaterial for me because I never carry it over.I only use debit for gas and then get Canadian Tire money back.

  7. gena

    Credit all the way! I even use it for small purchases like $3 just because I don’t like to carry cash on me! I love the points I get on my credit card and I love being able to see where I spent my money for the month!

  8. Tracey

    Good for you for figuring out what works for you! People are either stuck with what they usually do or else they’re quick to change just because someone tells them it will work. But everyone has their own style of spending (and frugality) and it’s important to figure out what works for you.

  9. Trisha

    I am the same way except I pay off what I just bought the minute I sit down at a computer. I find it is too easy to overspend even when I use the credit card VS cash. But if I know at all times where I stand with my bank account and credit card it works out for me.

    I have a PC points MC and a Scotia Moneyback VISA. Love the rewards for both and use them back and forth to keep a steady flow of rewards.

  10. Jennifer

    I try to use my credit card to pay for everything because I like to be rewarded for my purchases! We use the TD Travel Rewards Visa, and I think it is by far the best credit card out there! I also have the Optimum credit card, but I think you get more bang for your buck with TD. Now you can redeem points for just about anything – gift cards, small appliances, electronics, etc, not just travel. Last Christmas I redeemed the points I had earned that year and got just about everyone on my list gift cards. The selection is great! Prior to that, I had redeemed points to purchase round trip plane tickets to Italy and the UK. It doesn’t take long to add up the points. Just using my card for everyday purchases and to pay other bills like Rogers and Bell, I easily rack up enough points to get close to $1000 in travel/gift cards in a year. If you bank with TD, I strongly suggest you look into this credit card. There is an annual fee to have it, but we don’t pay it because of the type of account we have (can’t remember the name of the account, but if you keep $5000 in it, you pay $0 in banking fees).

  11. teachermum

    We use our PC Mastercard for just about anything (and I mean even a Timmy’s!). It was the best deal that I found that would work for us when we got it. We don’t have banking fees now (without having to watch the balance) so we were not interested in a bank card (sorry Shoppers RBC card!). We never carry a balance and would not use credit cards if we did not pay them off every month-that simply is not an option not to. I love that the Superstore has so many things to choose from besides groceries if I want to use my points that way (rarely groceries there-too expensive) and points work at No Frills for food and I LOVE that I can buy gift cards with my points! I also love having a record of most everything we spend if I want to analyze it.

    I have a Shoppers Optimum card and only use it to buy gift cards before I shop there. I earn more points than I know what to do with there as it is so don’t use it but for that. Since then Walmart has come out with a card with better rewards % than PC but not sure I need another one just to shop there…I should add up what I would spend in a year there and see what it would amount to. I don’t know that the gift card option exists for that though. My plan is to use all my points and buy Sears gift cards at Superstore and use those to buy “free” Disney tickets!

    Every once in a while we grab $200 from the bank but it can last us months sometimes. The only thing we seem to “need” cash for is when we pick up Chinese food at our favourite place-they give you a 10% discount.

  12. Tia

    If you’re not using credit cards to shop, you’re paying more out of pocket for the goods.
    There’s no free lunch, credit card companies can give you 1-3% cash back because they get it from the merchants via fees. The merchant builds the cost of these fees into the products.

  13. CM

    I agree, when I have cash in the wallet, i find that i go through it very quickly.

  14. Jamie

    I’m not impulsive with either cash or debit/credit. But I like to have cash on me, I guess because I’m more visual and knowing exactly how much money we have and having a plan for it all seems to make life easier for me.

  15. MummyMummy

    Teachermom, so your process to Disney tickets is by using a PC Mastercard points to buy Sears Gift Cards, and you can use those to ‘buy’ Disney tickets??? Really!?! That sounds Amazing! How does it work using Sears to buy Disney tickets?

  16. interestingtopics

    i thought you dont earn points when you purchase gift cards? at least that was what i was told when i tried to earn optimum points.

  17. Krista

    @Jennifer#1 – you are so right. The studies say people overspend when they use credit.
    When we had that big blackout in the summer of 2004, debit and credit was down. Even to buy gas, you needed cash. People with debit and credit were stuck all over the place.
    Plus less hacking of your bank account when you use less debit or credit — the banks have been in trouble already this year with 1.5 MILLION accounts hacked:

  18. Dien

    I love my debit card as its kinda of the same oa credit in not always knowing what you still have on it. I go through cash like crazy when I do have it, and out credit card has a high limit so I don’t watch enough what I spend it on. If I use my debit card and I know that I only have $200 to spend on groceries then I know I have to be careful. I find myself that with a credit card we can still do this or that and at the end of the month we are stuck. We have to pay for our own medical expenses and that’s were I find we catch ourselves a lot of times in. We’ll spend a reasonable amount and then oops someone has a dentist appointment that month yet or something like that. The dentists make more per hour than we do definetely!

  19. Ashley

    I also tend to spend more money when I have cash – especially when I’m tipping at a restaurant! If I’m paying with my credit card, then I usually give 15% (unless they were amazing, and then maybe a little more), but if I have cash, I always over tip. I also love to charge everything to my PC Mastercard because I use my PC points for everything! I pay off my credit card right away, so I don’t pay interest, and I’ve gotten thousands of dollars in free stuff while shopping at Zehrs/RCSS. Definitely worth it for me, but I’m also able to manage my spending, so it’s not for everyone!

  20. teachermum

    MummyMummy: I always envied the Americans who can get a Disney Visa and always wanted to save points toward a Disney trip but that just isn’t much of an option here aside from spending saved points on groceries and putting the same amount of money in a vacation account (I have done that before). But when I found out you could use PC points to purchase gift cards I took a good close look at all they offered and I noticed the Sears ones. Our Sears has a travel office and I checked-I can use Sears gift cards to buy Disney tickets from them! I could also pay for any portion of reservations etc if I wanted…but it will take a while to get to 4 adult tickets-I’m about half way there now.

    interestingtopics: No, you do not get Optimum points for buying gift cards EXCEPT for Shoppers Gift Cards. So I use my Shoppers Mastercard to buy Shoppers Gift Cards to pay for my purchases in-store. I get points when I buy the gift card (some cashiers think not, make sure you have them scan your card anyhow-you will) and points when I make my purchase using the gift card to pay.

  21. Susan

    Careful using debit and credit cards at gas stations. This is one place I make sure I only use cash. My debit card had been compromised a couple of times at gas stations, so I decided I would use my Sears card (used to be able to use it at Petro Canada) and it was compromised too, so just a heads up. This was in Mississauga for all three times.

  22. gail metcalfe

    I use my debit card for almost everything. That way I can check my acct online and make sure I’m not overspending. Seldom use a credit card except for online purchases. I find I need to have cash in pocket because there’s always somewhere where the purchase is too small, or debit/credit card can’t be used. However, when I do take cash out, I set myself a goal– i.e. I need to make this last for a week or two weeks. That works for me.

  23. Nathalie

    I only use my debit or credit since I base myself on the monthly statement to see where I spent my money, much easier than searching for receipts. And I also find I tend to spend more if I have cash on me.

  24. Cassie Howard

    Looks like I’m not the only one who prefers credit over cash! This is just a personal preference. My husband is the same way. We rarely keep cash on us!

  25. Debbie

    I too find that if I have cash in pocket, it disappears. I won’t use credit or debit at fast food restaurants or donut shops so unless I have cash, I just don’t go. It just seems cash trickles away. We pay our credit card off each month, so there is no real disadvantage to us and we’re earning CT points.

    I have a question about the whole gift card at Shopper’s thing. Do you buy the gift cards when you go in the store and then cash them in when checking out later? Do you get the bonus points or just regular points if they are having an event? I am just tuning in to the whole points events thing and thinking of checking it out the next time they have one.

  26. tp1943

    I have a preference for a MBNA Smartcash card exclusively. It is used for 95% of all the purchases in our household, especially groceries and fuel — 3% cashback at all grocery stores and any gas station. We pay the dentist, the chiropractor, Rogers bill, and most other purchases. We use
    AMEX at Costco due to corporate policy. Buying fuel at the Superstore is quite rewarding using the MBNA card: 3% on the cost of fuel plus 2cent/litre bonus slip for purchases at Loblaw’s brand stores. Oh, I have another exception: car repairs I use TD Drivers Reward as it gives me 1.5% reward. Each card has it’s merits, you must fit them to your own style. I prefer “cash back”.

  27. Renita

    I am like you in that if I have cash, I will spend it. I can partly blame my dad for that though. He was a believer of “mad money”, the cash money you have each week for yourself to spend on whatever you want with no questions. Normally for me it is between $20-40 on hand, but I try to not spend it all and all of my change (except loonies and toonies) goes into my coin jar for rolling at a later date.

  28. Cheryl

    I use a credit card for almost everything, even a $0.50 purchase. I was in line in a store and the person ahead of me used a debit card so I asked the owner which he preferred people to use, credit or debit. He said a credit card as it didn’t cost him as much. I can’t even begin to list the free items from Shoppers, Extra Foods, Walmart, Canadian Tire, etc. and cash back from MBNA over the years. Plus the free camera and +$300.00 cash back for applying for some of the credit cards. Bill is always paid off at the end of each, and every, month.

  29. Nicole

    I use credit cards too for my purchases. I still stay in my budget for groceries, gifts, etc & pay off the card each month. I like getting the cash back on the card in December to cover some of my Christmas budget. We also have a CIBC Petro Canada Mastercard that gives us 2cents off per litre at the pump that we can combine with our other 5cents off card to save a total of 7cents. We pay that off each month too & budget for gas each month.

    If I’m not earning the potential points, I feel like I’m just wasting more money.

    It works for me, but I know not for everyone.

  30. teachermum

    Debbie, you can do either. If I’m thinking ahead and know I need to get a card I buy the card first (only ever regular points, never 20x), do my shopping, then pay. I usually just get $200 put on one (the maximum) and use it until I need another. You can get any amount you want. If I’m not thinking ahead I have also bought a gift card when shopping and paid separately for it, then had them ring my order through. I’ve almost got all the cashiers trained at my usual Shoppers!

  31. Olivia

    Credit cards for everything except the odd purchase under $5.00 or where not excepted. Why not, I get various rewards converted to cash or products. We pay in full monthly, otherwise it defeats the purpose of rewards.
    At Shoppers, I now buy their only gift card that is re-loadable…..the student spending gift card. Part one of the card I use for purchases and the other part of the card is for reloading any amount I want.
    I wanted to avoid the waste in buying and cashing them in often.

  32. Eve

    Debbie: My regular Shoppers store suggested I get a gift card that has no dollar amount written on it.. Each time I go to Shoppers I load the amount I think I will spend-$50 or $75 etc then do my shopping and check out with the card. I then keep it and refill next time.The thing about using a gift card is that you get points for buying it and points for using it!I suggest you download Cassie’s free book on using Shoppers. It is excellent.

  33. Theresa

    I am exactly like you. I can easily stop at Tim Hortons 3x a day if I have cash on hand. Usually I only have my bank card. Worked well until Tim Hortons started accepting debit 🙂

  34. Jennifer

    We are using cash more now than credit. We are trying to save more money.

    We take out a set amount each week and when it’s gone, we stop spending.

    Over the last few months, we have been able to save more and spend less. The first month was more difficult but now we have made it a good habit.

    We also sleep better at night knowing that our savings account is growing each month : )

  35. Amy

    I agree, I just spend my cash in my wallet like its free money. I am regularly checking my bank account and credit card charges and i use that as my budget and to tell me how much money i have. If i have $200 cash in my wallet i dont consider it part of my budget for some reason.

    I do realize it can be easy to get carried away with credit purchases but if you pay it off every month and monitor what your spending its better than cash, PLUS you usually get rewards. I also pay with my credit card MORE than my debit because my debit card charges me after so many transactions. my credit card is always free.

  36. Nancy

    i shop with credit card more as i collect points, it gives me a better tracking system to where all my money is going….but now i may consider switching to cash back as it seems like i’m not collecting points fast enuf….

  37. Samantha Rosenthal

    If I have cash in my wallet I spend it, If I have debit or credit cards in my wallet I spend it. So I have tried the magic jars and this has worked wonders for me. All the cash goes into these jars and stays at home. When I need “NEED” to buy something I take the cash out go buy what I need and put the change back in the jar. If I don’t do this I find it hard not to stick to the budget.

    If you find it hard to do cash or debit/credit. I recommend the magic jars. It really does work.

    • Cassie Howard

      I agree, the jars really do work. They are like magic, huh?

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