Gerri Willis: Credit Challenge - FOX13 News, WHBQ FOX 13

Gerri Willis: Credit Challenge

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By Gerri Willis, FOX Business Network -

What if I told you there is a way you can save yourfamily 20 percent whether you are shopping at the grocery store or the mall --guaranteed? You'd be surprised, right? We'll the reality is that most peoplewho use cash only in their transactions spend 20 percent less than people whopay via credit cards, according to the National Foundation for CreditCounseling.

But how do you do it and just how difficult is it to dumpthe cards and pay in cash? That's the question we're asking viewers this weekas we launch The Willis Report Cash Challenge. In the wake of the credit cardbreaches at retailers across the country, many of our viewers have been askingquestions about just how hard it is to convert to paper (cash) over plastic(credit cards).

More and more people are opting for cash. According to a survey of shoppersconducted by Harris Poll on behalf of Feedzai, a cyber-security firm, fortypercent of people who were aware of the data breaches are using cash more andplastic less. The breaches, more than anything else, seem to be spurring peopleto change their habits. Just last week, beauty retailer Sally Beauty Holdings,became the most recent retailer to go public with the news that hackers hadbroken into their systems. But the biggest breach occurred at Target, whereinformation about 70 million customers was hacked during the Christmas season.Cyber security experts say it's no longer a question of whether your personalinformation will be stolen, but when.  

To be sure, the adjustments can be difficult, but the payoffs are greater thanjust protecting your personal identity, although that's no small thing. Surveysshow that people who use cash instead of credit cards spend less. And, it'seasy to see why. Giving a cashier your cold, hard cash --the money you toiledto earn -- is a much different experience that handing over your credit card.Using plastic distances you mentally and emotionally from the transaction. Itbecomes an exchange that will happen in the future, say a month from now whenyou get your credit card statement, instead of something that's happening rightnow. I believe that credit cards are a powerful tool, if used correctly, butmost of us use them as a crutch to upgrade our lifestyles beyond what we canafford.

Dumping the cards, then, has more appeal than ever. Butmaking the change is no small task. What do you do if you have to fly crosscountry for a family emergency? What if the kids need something for a classassignment Monday and it's already late Sunday night? The challenges are real,but planning is the key to making going cash free work.

Most all-cash families make it work by planning their spending, developing abudget and buying only those things that fit the budget. Look, credit cards, inmy view, are a powerful tool, but no substitute for actually figuring out whatyou should be spending. As a result, different people adopt a "Cash isKing" lifestyle in different ways. Some use debit cards, others usechecks. Some online shoppers buy gift cards. But the message is all the same.Pay now for what you buy now.

In the coming weeks and months will be following viewers who agree to take thechallenge. If you believe cash is king, join us. Send us an email or tweet (@GerriWillisFBN) or Facebook me.




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