I’m intrigued by this article in the July 2008 issue of Money. Mostly because I’m hating my credit cards these days.

My issue with credit cards is not about racking up debt. We pay off our cards in full every month. But I have two gripes:
1. I feel like I spend more freely with plastic than with cash.
2. It’s tough to stick with a tight monthly budget when “old” purchases show up in a new month needing to be paid.

The Money article makes the point that it can be worthwhile to get rid of your cards, even if you don’t have a debt problem and don’t carry a balance. The most important argument, which relates to my #1 above, is that it’s so easy to spend more with plastic. Example: According to the article, diners at McDonald’s pay an average $7 a visit when they use plastic, compared to $4.50 if they pay cash. Supermarket customers apparently pay 30% more for groceries and buy twice as many nonessential items on credit cards compared to shoppers who use cash, according to a 2003 study.

I feel like the same is true with debit cards. There’s just something too slick about sliding that card through a reader and having money disappear from my checking account. It’s much more painful for me to part with my cash.

I know, I know — getting rid of credit and/or debit cards is not a new idea. And it’s one of the key teachings of financial counselor and talk show host Dave Ramsey. But for a long time, I just thought I was smarter than my cards. Perhaps not.

Then there’s the the staying within budget issue. Here’s what I mean: Last month, we started doing some work on our back garden. My husband bought a load of rock for a garden path, and put it on our credit card. I knew about the purchase. In fact, I download all of our credit transactions weekly from our card issuer’s Web site and keep track of them in a credit card register in Quicken. So nothing about the rock purchase was a surprise to me.

Still, when June rolled around, I conveniently forgot to run our monthly budget report and notice those rock purchases. So we budgeted for some more plants and pots and wanted to stick really closely to that number. I used my debit card to buy those items, and came in close to the budget we had set up.

Then I ran the overall June budget report and saw that $200 of forgotten rock! These kinds of little things happen all the time with credit and debit cards. If we had simply used cash and put it in an envelope — I know, a very low-tech way of handling our money — my husband and I would both clearly know when we had used up our garden project money. The envelopes would be empty.

The jury is still out on whether we’ll become a totally cash-basis family, but we’re talking about it. How ’bout you?