I feel as though we save a lot more by paying cash and not getting cash back on groceries.
How do you figure? Because you aren't paying for a Costco membership?
Between the Costco Visa and the Executive 2% I get back quite a bit more than the membership cost.
I feel that by sticking to a strict cash budget, we spend a lot less on groceries than 2-5% cash back if we are swiping a card instead. Although I’m sure not the case for everybody, it’s easy to fall into the trap of just buying whatever, swiping, and thinking HA! I got one over on the credit card company….paying off my balance in full , so it’s free since no interest, and I got FREE money back. Unless you spend $50/week more by not carefully sticking to a budget. I rather spend $50 less than save 2% on a much higher total. I think this is a logic fallacy many people fall into without realizing it.
Now if it’s a *fixed* purchase like, I’m buying a $1200 stove, period, then yes getting 2 or 3% cash back is indeed a discount. But on an extremely controllable expense like groceries it’s very easy to spend a lot more by swiping. And it’s easy to justify…..it’s groceries, we NEED them, we’re going to buy them anyways.
But for us personally, there are countless times when using cash changes the way we spend…with a card we would just swipe and justify it, smugly knowing we are getting 2% back. But in the end the credit card company is laughing all the way to the bank knowing you spend more using a card.