Why I’ll Never Use a Cash Only Budget

Many like the cash only budget though I hate it. Here's why I think credit cards can be a great tool to your budget and help better manage your money.

While I’m moving this week, please enjoy this contribution from Kara at Frugal to Free. If you’d like to contribute to Frugal Rules, please contact us.

I’m Kara and I have a personal finance confession: I love credit cards.

In the personal finance world, credit cards can be a polarizing topic. Some people call them the devil, and swear by their cash only budgets. Some people wax poetic about credit cards, and swear by their usefulness.

I’m in the second camp. I’ll never use a cash only budget.

Don’t get me wrong- I see what the naysayers are talking about. Most people mindlessly swipe their credit cards. You can end up with a huge pile of debt in no time with that kind of mindset. With cash only budgets, you can see your money disappearing before your eyes. You know exactly how much you have to spend and when you get to that point, there is literally no more money.

It’s a good system if you have a problem controlling your spending. If you don’t have that problem though, credit cards can offer a world of options.

For someone like me, who has a small income, credit cards are a necessity if I want to do things like travel or give baller presents. I make under $35,000 a year so frugal living is a necessity. No matter how frugal I am (and I’m pretty damn frugal) I can only make that stretch so far. Often things like international travel are out of my reach.

However, with offers from credit card companies that give me thousands of bonus points for meeting spending minimums in certain time frames, those things are back on the table.

How I’m Flying to the East Coast for Free This Year


You’re telling me you’re going to give me points for thing’s I’m going to buy anyway? So that I can eventually get free things? On top of that, you’re going to aid in my getting free things with bonuses and extra rewards for buying certain things? Cash back when I buy groceries, which I need to live? Double points on gas for my car, which I rely on? Sign me up for that!

Recently I spent $3,000 in three months for a 50,000 rewards points offer. It was definitely more money than I usually spend in that time frame, since I can’t charge my big expenses like rent to the card. I’m frugal to the bone, and $3,000 in ‘extra’ spending seemed impossible at first.

However, meeting this large minimum was the kick in the pants I needed to get several car repairs done. They were way overdue. I was procrastinating on them because I didn’t want to spend the money. I also updated my seriously lacking professional wardrobe, and charged shared expenses that I was reimbursed for.

I took on all this spending knowing that I had enough to cover the costs, and knowing that I was going to use the points this calendar year. I’ll be flying to the east coast in May and August for free thanks to the points I accrued! By the way, if you’re looking for a credit card with a similar reward offer, check out some options here and start earning your own free travel.

Many like the cash only budget though I hate it. Here's why I think credit cards can be a great tool to your budget and help better manage your money.

How to Use Credit Cards Wisely


Only open one card. Don’t fall for every single offer that comes your way. Open one card and learn how to manage that before you move on to multiple cards.

If you have multiple cards, only keep one in your wallet at a time. Focus on growing points with that one card and make sure you’re paying it off each month.

Limit spending to necessities. If you can pay rent with a credit card, go for it! If not, put things like gas, groceries and repairs on the card. Do NOT use it for shopping, drinks or dinner out or last minute impulse buys. Thinking of the card as your ‘food card’ will help reign in any over the top spending.

I think credit cards are a great way to rack up rewards that add to your life. I personally use my points exclusively for travel, but you can buy gifts with them, or even deduct from your amount owed with them. With such great bonuses attached to them, I feel it’s a missed opportunity to go with a cash only budget.


What are your thoughts on a cash only budget? If you churn credit cards, what was your latest free trip or big reward earned? Do you think churning credit cards can be bad for your finances?


Kara Perez works at a nonprofit during the day and stalks personal finance blogs at night. She blogs about debt payoff and frugal adventures at

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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more. If you're wanting to learn how to monetize your blog, check out my blog coaching services to see how I can help you take your site to the next level.


  • I just started diving into the world of travel hacking. I think I’m a great candidate for it because like you, I don’t make much ($32k/year). I also pay off my credit card each day so that I’m not tempted to go on wild Vegas-style spending sprees. Since I started following this practice almost a year ago, I haven’t paid a cent in interest and I haven’t bought any more things than I needed. I’ve been married for almost 9 years and we never had a honeymoon cause we were broke, so I’m hoping to use my points to finally go on a honeymoon sometime within the next few years! Better late than never, right? 🙂

  • We use credit for points and miles then pay off our cards right away. I feel like it’s a lot more convenient than paying in cash, so we would probably stick with this strategy even if we didn’t pursue rewards.

  • We also use credit cards for travel rewards. The only hard part is meeting the minimum spending requirements sometimes since our expenses are relatively low. We’ve found that we can buy gas station gift cards or pre-pay utitilies if we need to meet a minimum for rewards for an upcoming trip.

  • Money Beagle says:

    We pay our balances off every month, so we use cash back rewards cards for just about everything. It’s paid for all of our flat screen TVs, a small trip, and some stuff around the house. Definitely worth using the card so long as the rewards are 100% yours, and you’re not giving any back to the credit card company in the form of interest.

  • I wish I could figure out how to pay rent with credit cards because that would make it a lot easier to hit spending amounts for bonuses. I’m kind of giving up on the cc game for now because I found it too hard to keep track of old cards I used to do the same thing, then had to manage annual fees and canceling or downgrading. I really do see the advantages of both methods though!

  • I definitely want to try this one day. These days I’m trying to keep at least one area of life simple and stress free and I know I will go plum fool crazy trying to meet minimum purchases, lol!

  • Amanda says:

    I think as long as you are just using credit cards to buy what you need anyway, they are the perfect way to earn a little extra!

    My family of four is flying free (round trip) to Florida with five free hotel nights on our cc rewards. I added up the value and it totaled around $2000!

  • I go back and forth between a cash only budget and one that uses credit cards. I do find that I can be guilty of using my credit card mindlessly because the balance isn’t due right away. It takes a lot of discipline and knowledge of your finances to have a budget based on credit card spending.

  • We also had issues meeting credit card minimum spend amounts when our income was low, so we had to be very choosy about the offers we took up. We timed the applications for credit for just before large planned spending (travel purchases, Christmas, car insurance) to be sure we wouldn’t have to come up with any additional spending.

  • I think there are some people who absolutely need a cash only budget. It helps them keep their spending in check and they know that once they spend their cash there is no more until the next week/month.

    If you can handle having credit cards and not letting them affect your spending habits, then yes absolutely get rewards for your spending! My wife and I have been doing this for a while now and it’s been a huge benefit.

  • I actually just signed up for my first credit card (a travel rewards) for the same reason. I live 1000 miles away from my family, so travel is an expense that I prioritize. A credit card works for me because I check my balance daily. Great post!

  • KitKatCuty84 says:

    I just started using YNAB and it has completely changed the way my husband and I spend money. For the first month, we were cash only, but through numerous personal finance blogs, we realized we were leaving money on the table by not taking advantage of credit card offers. We opted for a travel card, with a sign-on bonus, so hopefully our next international vacation isn’t far away.

  • Adam Harlow says:

    I do the same. I live off of my credit cards because of the rewards. I have been able to use the reward towards my monthly bill or use it for items I need from Amazon or so on. It works great. I also pay off the bill every month and do not leave a balance on the cards. I just recently opened a southwest card because they gave me a large amount of bonus point for opening and using the card for the first couple of month. I have make it more of a primary card now so I can get enough reward to take my family on a vacation somewhere. Every dollar counts!

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