{"id":7728,"date":"2009-12-11T05:00:05","date_gmt":"2009-12-11T12:00:05","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=7728"},"modified":"2024-04-16T14:02:24","modified_gmt":"2024-04-16T20:02:24","slug":"suze-orman-jumps-aboard-the-pay-with-cash-bandwagon","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/suze-orman-jumps-aboard-the-pay-with-cash-bandwagon\/","title":{"rendered":"Suze Orman jumps aboard the “pay with cash” bandwagon"},"content":{"rendered":"

For years now, Dave Ramsey<\/a> has recommended ditching credit cards and paying with cash. (Specifically, Ramsey advocates the use of an envelope budgeting system<\/a>.) In fact, this anti-credit card stance is one of the biggest problems critics have with his philosophy; they often point out that “responsible” credit card<\/a> use would yield a higher credit score.<\/p>\n

But it looks like Dave Ramsey has some new company in the Cash Only camp. According to a recent MSN Smart Spending article, money guru<\/a> Suze Orman<\/a> is the latest proponent of paying for purchases with cash:<\/p>\n

On her Saturday night show on CNBC, she asked viewers to join her in a Back to Cash movement. “Let’s go back to the good old days,” she said. “Let’s go back to the times when you literally paid cash for everything. That’s right. Cash. Stop using your credit cards altogether.”<\/p><\/blockquote>\n

Here’s Suze’s brief call-out on video courtesy of CNBC:<\/p>\n

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Why the Change of Heart for Orman?<\/h2>\n

Orman’s new movement<\/em> is apparently in response to the increase of aggressive tactics by the credit-card industry.<\/p>\n

As the deadline for the new credit-card legislation draws closer, credit-card companies are looking for ways to make up for the projected loss in revenue. This includes steps like drastically increasing the interest rate on even cardholders who’ve always paid on time, and continuing to close accounts of select consumers with low balances or periods of inactivity.<\/p>\n

For example, my mother<\/i> has had several cards close her account after only a couple months of inactivity, despite the fact she’s been a long-time member customer. Recently, I’ve also fielded calls from two close friends who’ve had rate increases without any default. (In one of these cases, my friend called for a decrease and they actually responded with an increase!)<\/p>\n

Apparently, the changes have hit close to Orman, as well. I didn’t catch her announcement over the weekend, but the same MSN Smart Spending article points out that she used her own show director’s wife as an example. Citibank had recently sent her a letter raising her rate to 29.9%, despite the fact she’d never missed a payment.<\/p>\n

Why We Chose to Live Without Credit Cards<\/h2>\n

It’s been almost two years since Courtney and I made the decision to ditch our credit cards for purchases. Last December, we finally paid off and canceled the last one.<\/p>\n

In order to make the decision<\/a>, we employed the Ben Franklin method: We simply created a list of the advantages and disadvantages.<\/p>\n

Advantages for cash over credit:<\/h3>\n