The Willis Report: Cash Challenge - DC News FOX 5 DC WTTG

The Willis Report: Cash Challenge

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Can you go credit-card free? That's the question we're asking viewers this week as we launch The Willis Report Cash Challenge. In the wake of the credit card breaches at retailers across the country, many of our viewers have been asking questions about just how hard it is to convert to paper (cash) over plastic (credit cards).

To be sure, the adjustments can be difficult, but the payoffs are greater than just protecting your personal identity, although that's no small thing. Surveys show that people who use cash instead of credit cards can save as much as 20 percent. And, it's easy to see why. Giving a cashier your cold, hard cash --the money you toiled to earn -- is a much different experience that handing over your credit card. Using plastic distances you mentally and emotionally from the transaction. It becomes an exchange that will happen in the future; say a month from now when you get your credit card statement, instead of something that's happening right now. I believe that credit cards are a powerful tool, if used correctly, but most of us use them as a crutch to upgrade our lifestyles beyond what we can afford.

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

Dumping the cards, then, has more appeal than ever. But making the change is no small task. What do you do if you have to fly cross country for a family emergency? What if the kids need something for a class assignment 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 a budget and buying only those things that fit the budget. Look, credit cards, in my view, are a powerful tool, but no substitute for actually figuring out what you should be spending. As a result, different people adopt a "Cash is King" lifestyle in different ways. Some use debit cards, others use checks. 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 the challenge. If you believe cash is king, join us. Send us an email at gerriwillis.com or tweet me @GerriWillisFBN.

Don’t miss The Willis Report 5pmET on FOX Business

READ MORE: http://www.foxbusiness.com/on-air/willis-report/blog/2014/03/31/cash-challenge

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