I am really trying not to use credit cards for spending. I have a PayPal account. So every week I put money into my PayPal account. It can be 2, 3, 10 dollars or more. This way, when I come across something I want to purchase on-line, I can just pay for it from my PayPal account. It's also neat to treat it as a savings. For example if you put $10 a week in the account for 52 weeks, you will save an easy $520 at the end of the year you start savings.
By Kathy from West Hartford, CT
I agree. I love having my paypal card. I let my account build and then when I want or really need to use money for a speacial reason I know I have that instead of breaking the bank so to speak from money used on everyday things like bills etc. Also, when you win the contest here on thriftyfun.com you can choose to have it sent to your paypal account verses mailing which is so much faster. And paypal can be used anywhere that they except mastercard like the post office walmart etc. And its safe and easy to use.
I absolutely disagree! While I am sure it is convenient, you should NOT think of PayPal as a savings account. It is not.
Even at a very low interest rate you are losing lots of money-- This is how PayPal makes its money, it is using your money to make money (i.e., your potentially earned interest) while you think of the money as just sitting there. You are not "saving" $520 in a year-- this is money you already owned.
Instead, you are LOSING the money that you could have earned having that money sit in a savings account (or some other interest bearing account) earning money for you.
Having their (and our) money work for them is one of the ways the rich get richer. Even if it's just small amounts, take back your money that is just sitting around in accounts like PayPal and put it to work.
Hi Kathy, I like your idea! I understand that you're talking about a little extra that you're going to spend anyway, not so much 'savings'. Personally I like using PayPal or even a seldom-used checking account with a debit card, better than poking back paper money in my purse or stuck someplace around the house like we all once did, I'm less likely to lose it. Also, if you spend cash that you HAVE in PayPal, or your pocket, or wherever, it's STILL more frugal than using a credit card that charges huge interest. Doesn't matter as much how you save small amounts, just that you do save for when you need it. Way to go!
Another precaution about Paypal: You don't get the same buyer protections through them that you will get with a credit card. I try never to use Paypal when I'm the least bit unsure of a seller. I never spend any more money with Paypal than I figure I can afford to throw away if the transaction goes bad. And when I do use them, I always pay with my credit card and not my bank account.
In my very humble opinion, people need to learn to trust themselves more and control their own finances. Not trusting yourself with a credit card is just not cool. Credit cards are the best way to pay, hands-down. All you have to do is make sure you have the money to pay in full each month. It's simple math and not nearly as difficult as the "freeze it in a glass of water" crowd would have us believe.
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