Living on the Float
Reading about this was really eye opening. We pay our credit cards each month, but I had t noticed how almost every expense had slowly migrated from direct withdrawals from our checking account to a credit card purchase. We pay them off each month, but have little left over until next payday.
we are now migrating off of the cards - back to the bank to get ahead.
I'm in the UK and there is more of a culture here of viewing credit cards as risky, ie that they encourage irresponsible spending. 'Good' reasons for spending on a credit card are here considered to be:
to separate expenses that will be paid back by someone else, eg business expenses
to take advantage of the payment protection, eg if you pay a big purchase upfront and the supplier goes bust.
I get that from a budget point of view it makes no difference, but your own mentality is equally important.
I know that for some people they prefer paying through credit cards and paying it off each month - and that isn't necessarily a bad thing.
To me though, it has been a much more 'freeing' thing to switch all my purchases to coming directly from my checking account. There are fewer accounts to reconcile and I'm not always feeling like I am playing a shell game of where I have to send my money each month.
Also, I tend to overspend on credit. It has happened every time I completed paid off cards and then tried to use it 'just a bit and pay it off'. Even with how YNAB shifts money from categories to pay back credit card spending - the temptation will always still be there.
The only downside I have seen so far (in the US) is that my credit score dropped 12 points after I had a month of no open accounts with revolving spending. I'm still in the high 700s so I am not terribly worried about it but completely cutting off using credit can have that effect.