Here’s what one successful investor has to say.
- Mark Cuban is a shrewd businessman who knows how to negotiate.
- He says if your goal is to save money, paying cash could be key.
There’s a reason why so many consumers use credit cards to make purchases, whether it’s everyday items like gas and groceries, or larger purchases like furniture and electronics. Credit cards reward you for the things you buy, and that’s cash back you might as well take advantage of.
But these days, the cost of goods and services is higher due to rampant inflation. So it’s more important than ever to do what you can to save on your purchases.
If you ask shark tank personality Mark Cuban, don’t be afraid to negotiate when you want a better price. But if you’re going to go this route, be prepared to ditch your credit cards and pay for your purchases with cash instead.
Paying cash could save you a lot of time
Mark Cuban insists that when trading, money is a powerful tool. Imagine you had to pay for a home repair and you were offered a $2,000 quote to do the job. This $2,000 estimate might assume that you will be charging this expense to a credit card, which means the business in question will lose money in credit card charges.
In this situation, you may be able to negotiate the price of this repair – say, $1,900 – by offering to pay cash. This way, the business gets its money on the spot and doesn’t have to worry about additional fees.
Similarly, suppose you walk past a kickboxing class that costs $50 and the marketing manager at the door encourages you to sign up right away. If you tell this person you’d like to join but you only have $40 cash on you and don’t have your credit cards, they might accept that price if it means filling another slot.
Paying cash could also help you avoid overspending
If you are someone who is not afraid to negotiate, money could be your key to success. But that’s not the only reason to start relying more on cash and less on credit cards. Sticking to cash could also help you control your spending.
Imagine walking to the store with a small shopping list, but being tempted to make impulse purchases when you see attractive items on sale. If you have a credit card on you and you haven’t used it to the max, all you have to do is swipe it at checkout and go on your way. But if you don’t have a credit card handy and you’re limited to the cash you have in your wallet, you may be more likely to ignore those unplanned purchases and stick to your initial list.
In fact, some financial experts, like Dave Ramsey, are convinced that credit cards are downright dangerous and should be avoided at all costs. This is a more extreme view, and the reality is that credit cards can actually be a money-saving tool in some ways. Not only do they typically reward consumers for their purchases, but they can also provide protection in situations where a merchant fails to warrant its products or a business fails to warrant its services.
But if you tend to overspend, it might pay to avoid credit cards for a while and stick to cash. And if you ever find yourself in a situation where you need to negotiate the price of something you’re paying, be sure to use cash as your key negotiating tool.
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