How Cash Over Credit Can Save You Money [Saving Money]

Avoiding pricey credit card fees isn't the only reason to opt for cash over credit (although it's a good one).

Nowadays, using cash over credit has some additional post-recession benefits. After all, with consumer demand low, some businesses, including auto dealers and electronics retailers, are offering better deals for cash-carrying customers. Other service providers may cut you a deal, too.

So why pay cash over credit? Let us count the ways:

Flee the Fee-Fest: With new credit regulations coming down the pike next year, card carriers are rushing to add new fees and charges to card holders before the hammer comes down next February. Some of the new fees, like fees for paying bills over the phone via credit card or higher fees for tardy payments, may drive cardholders over the edge, and have them leave their plastic at home and more cash in their wallet.

Use Cash, Cut a Better Deal: Retailers are beginning to rebel against the automatic fees that come with credit card purchases. Car dealers, hotels, and high-end electronics dealers are increasingly open to offering lower prices if a buyer pays with cash. Take the travel site The online site offers more hotels and at better prices for customers who give up the greenbacks.

Doctor Dollars: Paying your doctor bill with dollars gives new meaning to the term cold cash. If you need to see the doctor for a virus or other malady, offer to pay your bill in cash. Physician's offices are overrun with paperwork, and could be amenable to lightening the paper trail if you offer a couple sawbucks on a $50 tab. That's a 20% discount – and don't be surprised if your doctor goes along with the deal.

Instant Accountability: People who pay bills with plastic may spend more knowing that bill really doesn't come due until 30 days later, when their credit card bill shows up in the mail or via email. But paying a tab using cash means the money is coming out of your pocket right now. Being more cognizant of how fast your household budget is being depleted should save you more money in the long run.

Credit card holders who have become attached to the perks of plastic, things like card rewards, theft protection and the convenience of avoiding ATMs and waiting at the counter for change from a $50 bill, may balk at using cash.

But stand firm. By weaning yourself away from the plastic with the big bank logo on the bottom, you're saving money, gaining some leverage, and sticking it to the very same people who drove your interest rate up when went over your limit.

As the old saying goes, revenge is a dish best served cold … and paid for with cash.