How to benefit from a credit card banJul 20, 2016
Tense negotiations between Walmart and Visa have led the chain to stop accepting the popular credit card at its stores in Thunder Bay, ON. And that’s only just the beginning; unless they can come to terms on a new agreement, Walmart is set to ban Visa cards at all its stores across Canada.
The reason for this ban has little to do with shoppers — Walmart believes that Visa’s merchant fees are too high, and the chain suggests that higher fees could potentially lead to higher prices. (Visa has stated that Walmart’s fees, much like its prices, are among the lowest in the country.) But a credit card ban shouldn’t stop you from shopping at Walmart. Instead, you can take advantage of this opportunity to pay a visit to the ATM and withdraw some cold, hard cash.
Why you should pay with cash over credit
When it comes to making purchases, it would appear that credit, not cash, is now king. In 2015, just 25 per cent of purchases in Canada were made using cash, while credit cards were used 42 per cent of the time. What’s more, many Canadians don’t seem to be paying off credit card debt promptly. A Bank of Montreal poll found that 46 per cent of credit card holders carry debt, and nearly one third of Canadians don’t pay their bill every month.
So here’s where a switch to cash could help. When you take money out of the machine, you know exactly how much you have on hand. And, if you only pay with cash, it’s easier to set a spending limit—once the money’s gone, you can’t buy any more stuff. When using a credit card, it can be easy to just “put it on credit and forget it,” which means you might end up spending more than you can afford to pay off at the end of the month.
Make your grocery budget cash-only
Several large Walmart stores carry food items, which can often be cheaper than other chains. But whether you do your grocery shopping at Walmart or another store, it’s best to set your budget in cash. Let’s say you have 40 dollars a week to spend on food. If you have that amount with you in your wallet when you go shopping, you can ensure you won’t overspend.
You’ll also want to keep a running tally while you’re at the grocery store. Chances are your phone has a calculator app, so when you put an item in your cart, you can add it to your running total. You’ll also want to make sure your grand total is a few dollars less than your weekly limit, since you’ll likely have to pay tax on certain items.
You don’t need a credit card to earn points
Some grocery stores have their own rewards card, while others, like Sobeys or Metro, allow you to collect Air Miles. With these programs, you can earn points while shopping and still pay with cash. And it’s not just grocery stores that offer these kinds of perks—who doesn’t have a secret stash of Canadian Tire money?
No matter where you shop, your budget could probably benefit from a self-imposed credit card ban. Changing your shopping habits can just be about the way you pay, not where you go in the future.
How often do you use credit for regular monthly purchases? Join the conversation on Twitter using the hashtags #BDOdebtrelief #LetsTalkDebt