By Stas Bekman.
Published: 16 July 2006
Unpaid Debt is bad for you, since you end up paying around 18% interest on it, which is quite against the idea of saving. By paying cash you ensure that you can't overspend. Get rid of those dozens of credit cards. Keep just one or two for emergency. It's much harder to get departed with your cash, than handing a plastic to someone and not having any appreciation of your money leaving your bank account.
Some people even suggest to freeze that last card in the bowl of water, so you can't easily get hold of it and spend money that you don't have.
Sometimes you can buy things for a lower price, if you ask the seller whether he will give you a 3% discount for cash payment (because they end up paying 3% to the credit card company for each transaction). This could be a significant saving if the purchase is big. And it all adds up at the end.
If you do use a credit card, be careful when you withdraw cash with it. Check with your card issuer whether you start paying the interest right away.
Fascinating Facts about Personal Debt (http://www.bankrate.com/brm/news/debt/debtguide2004/debt-trivia1.asp)
to Avoid Debt (http://www.princetonreview.com/college/finance/articles/smart/avoiddebt.asp)
Guidelines to avoid debts (http://www.debtleap.com/debt-articles/avoid-debt-tips.htm)
Credit Card Debt During the Holidays (http://holidays.about.com/od/giftideasshoppingtips/a/HolidayHangover.htm)