Cash vs Plastic
There is no question in my mind that we have become a “plastic society.” A credit or debit card is much easier to put in your pocket than a handful of loonies or toonies. I would bet that the credit card companies had a party to celebrate the change from paper to coins.
Numerous studies have shown that the average person will spend more on a purchase if the purchase is made with a credit card or on a “pay later” plan. What if you do not have the money to pay when the bill arrives? Our parents/grandparents used to save the money to buy what they needed for cash. Granted, credit cards may not have been an option as credit cards were not widely available to the general population until the advent of the computer chip in the 1970’s. Notwithstanding, the principal of paying for significant purchase out of savings or a debit card is valid. Simply put, it keeps you out of trouble. If you cannot afford to put money aside to pay for the new TV, couch, bedroom set, kitchen renovation, etc., how on earth are you going to pay the bill when it arrives after you paid for it on a credit card. Be careful with purchases which do not have to be paid until next year – read the contract in detail and see what will happen if you do not pay the purchase in full on the due date. You will be forced into a high interest rate loan that drives up the cost of your original purchase. Be a smart consumer.
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