Posted by: jinoe | July 3, 2007

My Road to Riches – Cash or Card

I use to have 4 credit cards.  All of them are active and at the same time free of any debt.  When my wallet was stolen last year, I have to live without my credit cards.  For six months, I was able to live without one credit card and realized some advantages and disadvantages.

With cash, I am always debt free.  No impulsive buying.  I dont fear going window shopping since that’s all I can afford with my cash around.  And since I dont carry more than 3-digit worth of cash in my wallet, I know I won’t get too far.

With cash, I dont need to keep up with my bills.  No missed payments.  No absurd charges and fees.

With cash, I’m always sure I will buy only what I need.  I stick to my budget more consistently by bringing cash around.


With cash, I don’t earn points.  I need more points to earn that 2-night hotel stay in Hongkong.  I have enough points for one night so far.  I tried calculating the cash to points conversion.  It showed that I need to charge more than 550,000 PHP within 3 years to meet the points requirements.  Wow.

After six months, I am yearning to have my credit cards back.  I want the points.  I’m calling them up for a replacement while waiving the relacement fee which they oblidged.  While this step can ruin my spending habits, I always remind myself of these pointers:

1.  Clearly define the needs and wants.  Prioritize the needs.  I have a also allocated a savings for my wants.  Like this year, I am planning to buy these stuffs:  a new watch, a new pair of running shoes, and a laptop.  My allocated savings can only afford the first two for now.

2.  Stash the savings.  I keep a portion of my salary right away.  I opened a different account for that and make sure it remains untouched until emergencies.

3.  Limit the number of credit cards and the spending.  I’ll just bring one card and keep the others at home for collection and display.



  1. Amen to the first thoughts on having cash around Jin. I clearlty understand that scenario now that I cut all two credits that I had. Though I’m still paying for the remaining balance, I’m happy that I’m back to debt-free services. hehehehehe

    Any suggestions for a laptop, my friend? I found a 1.6 Gig Toshiba here in Cebu. P4. P25500. What do u think, my dear? Im also planning to buy one. heheheeh with savings, of course!

  2. Jin, get one card and make sure the credit limit won’t allow you to buy a car. hehehe
    I abused my card and finally got rid of it when I went past 50k in debt. Oh well, lesson learned.
    JOEY!!! Stay away from Toshiba, they’re notoriously overpriced! Well, 25k seems affordable enough but make sure the specs are good including hard drive capacity, video card, connectivity etc. It seems that we all have the same targets this year hehehe I’m going for the Acer Aspire laptop series or HP.

    I also suggest a cheaper brand like NEO and MSI. I also think that the common brands are overpriced like HP, Dell, Fujitsu and Toshiba. You can get the same specs from the cheaper brands at almost half the price. So far, I havent heard negatvie feedback from those I know who bought. Sa nagagamit man guid na a.

    So we all want a laptop this year. I also think it is a great time to buy one. Prices are good. Specs are good. Next year could even be better. But I dont think I can wait.

  3. those are great pointers!..

  4. Good point Jin, although Toshiba is still way overpriced than other brands.

    I’ve seen NEO and MSI on the stands but I have no idea whether they are reliable. Trust counts a lot when buying ‘generic’ brands, might do more research before I consider them on my list.

    But Acer has a Ferrari designed laptop! It’s the only way I can own a Ferrari! hehehe

  5. nice one! it’s hard to live without credit cards but it will be worth it. credit cards should be used as cash. never charge anything unless you have cash to pay for it. me, i’m still learning to control the urge to swipe. hehehe

  6. Definitely keep one card handy, but make sure you are using that one that lets you earn flex points or airmiles, so that you are atleast getting something out of it. (A free plane ticket is money you’re not spending, right?) It sounds like you have a good, tight rein on impulse buys so you shouldn’t have issues with overswiping the plastic. I know the economic system over here is different from back home but I find, this is what works for me.

    Save first. Over here, they have retirement savings accounts called 401K plans. You can elect to save up to 15% of your pre-tax salary to that account. Depending on the benefit structure, some companies offer to match 50% of your contributions! (Again, free money is definitely not something to say no to.)

    Save second. I’ve also found that having a pre-set amount deposited directly onto your savings account helps to not miss the money when you see your net pay for the period.

    Once that’s stashed away, it’s the 30-50-20 rule for me. My spending has to be compartmentalized. No more than 30% on housing, 50% on utilities, bills, fun money etc. and finally 20% for contingency. (but I am guilty of having used this for a gorgeous pair of Christian Louboutins once. Ay-yay-yay.)

  7. i’ll go for card jin, especially that i think you are disciplined enought not to have over- swiping problems. as long as you wont swipe if you have no cash to pay the full balance, you save a lot on card, here’s how:

    1. the payment is not after a month after you make big purchases (i just schedule my big purchases), as long as you pay the full balance, you wont get finance charges or wont pay for interest. but then, in your bank account, the money gains interest.

    2. you save the loose change. when i have no choice but to pay cash, i usually end up with penny, dimes, and nickels which i am not fond of counting and i dont carry since they are heavy. therefore, they end up in my coins box, i dont know how much coins i have now, all i know they are big enough to gain interest too, but i am too lazy to bring them in a bank, and if i bring it to a coin changer, i would have to pay a few cents for every $ of coin. i consider coins as money and oppotunities lost since they just sit idle in the house, if they are in the bank, they may contribute to the interest too, no matter how little it would be.

    3. you earn cash rewards or mileage with card which can save you not only in buying tickets (which i dont since i usually get the bottom sale price in buying fare tickets, which you wont get the bottom sale price if you use the reward) but in hotel, or dining, or some gadgets you like to have. before i exchange mileage for anything, i stil consider mileage as my earned- money that even if it is free i still consider which one is best or the cheapest for the worth. you can also elect to have your cash rewards automatically donated to a recipient like schools or church or ngo’s, there are a lot of recipients in asia ( i go to give2asia and choose always the philippines).

    somehow the situation there is different from here, hopefully soon there will be automatic payments there too that your credit card will automatically deduct the full balance from your bank account, in that way, you dont have to worry about paying bills and late payments.

    and yes, it is always good to have a pre-determined savings, a certain amount each month stashed away for CD to gain higher interest and of course, if it is in CD, you cant withdraw it until it is matured, which limits the spending, and by the time it is matured you find you dont really have anything to spend for that you keep on renewing the CD and just adding to it. then loose savings in the bank for emergency, travel, life’s simple pleasures, etc, which should not be seen as cash to pay the card but savings for your emergencies and luxuries, and every year that they are over your expectations (you underspent), it is always good to transfer or add the excess to your CD :).

    above all, life’s great, enjoy, as my husband would always put it, enjoy life but dont forget to save, save but dont forget to enjoy life, strike a balance :).

    good luck to your way to riches.

  8. wow, so that’s why girls are the family’s money managers hehehe

    Maxie, if we had your salary I’d do that 30-50-20 easy LoL

    I prefer to hold the cash. But Quennie is more disciplined in using the card. Besides she has the Mabuhay Miles. Im waiting for her bills to clear so that I can use her card to buy a shoes that’s on sale.

    Maxie should be Dona Max now. Hehehe. 30-50-20 rule is nice. I use the 70-20-10 for expenses, savings and tithes respectively. Althought the savings part can be affected sometimes.

  9. Dona ka ‘to. Na swertehan lang nga DINKS (double income no kids) pa kami. Pero I’m sure we would be scrambling too if we had siblings to support and kids of our own. Spending money on a pair of shoes is nowhere near as rewarding as seeing your sister become a doctor. Besides, taas man ang cost of living diri. It just all boils down to discipline. 🙂 Ma bisita gid ko sa imo marble palacio.

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