Most people are of the opinion that it’s more difficult to part with cash than pay with credit card. Maybe. But it’s largely a mindset. If you tell yourself that credit cards are not an option; you just have to get creative and find ways to pay for expenditures in cash. I’d say it would sure feel good to know that you’re not relying on credit and instead of adding up to that credit card debt, you can work on eliminating it with continued pay down. So my take is take out credit from the equation and you’d feel liberated.

Keeping cash as emergency fund makes much more sense in making you learn to handle money. If you think about it, you got into credit card debt by using the credit cards; how is it going to make you any better at handling money if you still use credit cards for emergencies?

I personally prefer to have cash reserve. I can sleep better at night knowing that I can actually use it in case of financial emergency. Handing people a piece of plastic is much harder to think of when you know you can be compounding your financial woes.

Another element to watch out for is the amount of utilization you have on your existing accounts. The old adage that banks only lend money to people who don’ t need it is pretty much true. Opinions vary, but having your total utilization (total debt …