Well I could go off on the former Governor of New York but Letterman and Leno have covered the topic pretty well. The lesson learned from that incident, however, should not be missed--if the guy would have paid cash, he would not have earned the title of former Governor before his term was up. Here's why you need to pay for as many things as possible:
- Using a credit card leaves a paper trail that anyone can refer back to at any time.
- If you have more income than is stated on your W2 (we're talking lots more here) and you put it in your bank account to cover your debit card/check transactions, the IRS may wonder where the extra money is coming from.
- Using any form of payment other than cash allows retailers to glean information about you and you can eventually find yourself being overwhelmed with advertising and marketing material reserved for their "special" customers.
- If you only spend the cash you have, you will avoid bouncing checks, overdrawing your account, racking up credit card debt, and eventually finding yourself with a less than desirable credit score, dismal credit report, or worse, in collections or filing bankruptcy.
- You do not need to provide additional information about yourself when you pay cash. How many times have you wrote a check or used a credit card and the salesperson needed to look at your ID as well? By writing down the information on your driver's license, the clerk will then know your age, address, and in some states, your social security number.