I use cash for less than .05% of transactions. I find the use of cash, while nostalgic, inconvenient. I also find that cash doesn't reward me to use it. Unlike my credit cards. I now use 2 credit cards in a clinical manner to optimize cash back. I estimate we get back 2% of all credit card transactions.
Clearly the dissociation (between purchasing and the pain of actually paying) is anesthetised by (non-cash) payment for a majority of people.
One might argue that the decline in daily cash transactions has fuelled consumerism. What do you folks think is a potential way to bring back that nexus between purchase and pain?
We use credit cards for virtually all purchases possible. We are in the same boat, getting around 2% cash back average on all purchases. The cash back and travel rewards add up quickly. I didn't really think about the total amount per year we "earn", because it is usually $20 or $40 each month, which isn't much (on a $1000+ CC bill).
Then I started thinking $40/month for 12 months is $500 per year, and that is just on one card! Add to that the float that comes from buying something and not repaying the purchase amount for another 30 to 60 days. That's a free loan.
I added up the savings from cashback and float, and it comes out to around $1000 per year. That's a decent amount of money, so I figured this would make a good blog post topic. I laid out the case for using credit cards for everything you possibly can here:
http://rootofgood.com/charge-everything-on-the-credit-card-most-bizarre-financial-advice-ever/The blog post assumes a typical non-mustachian household that spends $3k/month. Sorry, mustachians, your low spending ways mean you can't get back $1000 per year from the CC companies! But on the bright side you are saving tens of thousands of dollars per year by not jumping on the consumerism bandwagon. :)
I understand the argument that says credit cards make you spend more, and that may be true in general. I doubt it would make a difference for our spending habits. If I had to pay cash for everything, I would just stock my wallet and Mrs RootofGood's purse with a fat stack of hundo's. We just don't spend money on ridiculous unnecessary crap. But I love simplicity, and credit cards are simple. I don't like wasting time going to banks or ATM and dealing with cash, and change, and manually tracking spending that cash would require.
So in summary, we earn close to $1000 per year using credit cards and save a ridiculous amount of time by using CC's. Even if we spend an extra $1000 per year because CC usage makes us frivolous shoppers, it is offset by the convenience and cash back/float savings.