Cash vs Credit

It has been found it is better to use cash than credit. One way people think is using credit cards you get the free use of someone else's money. This works if you pay it off every month but CardTrak says 60 percent don't pay off their credit cards every month. Some people use credit cards for the airline miles or other incentives. Consumer Reports says 75 percent of the airline miles are never redeemed. A study by Dunn and Bradstreet showed that the credit card user spends 12 to 18 percent more when using credit instead of cash. You think about it and feel it more when you hand over cash than using your credit card. An American Bankruptcy Institute study of bankruptcy filers reveals that 69 percent of filers say credit-card debt caused the bankruptcy.

Now some credit card companies are cutting credit limits and raising interest rates. If you are starting to rely on your credit card for basic expenses be warned your limit may be cut in the future and then what will you do.