I know several people that use their credit cards for everything from buying a pack of gum, or a cup of coffee all the way up to a car. One even used a credit card to buy and remodel a house! Think about the way you use credit cards. I'll give you a moment……

Research shows that when you use credit, on average, people spend 30% more than if they use cash. The reasons are many. Some small businesses, who pay higher transaction fees in order to take credit cards, sometimes have minimums on the dollar amount you must purchase. Often you will buy more to meet that minimum. I see it frequently when people are ordering lunch. Using plastic (and this includes debit cards) are emotionally impersonal and swiping becomes a natural gesture without giving much thought to spending more than you planned.

Cash is personal. Most people have a sort of protective relationship with the cash they have on hand. I know that when I have cash in my wallet- I'd rather put purchases on my debit card that spend down the money in my wallet. I know that once I break a $20 bill for example-it's gone, no matter how small a purchase I make. The remainder seems to spend itself. I feel a little more secure when I have cash in my pocket knowing that no matter what, if I need something I can buy it. That holds true if there is not an ATM around or someone won't take an out of town check. Cash also has a limiting factor- when it's gone-you have to stop spending.

So, how do you use your credit cards? Do you have rules to live by? The Consumer Financial Protection Bureau (CFPB) has a nifty little tool to help you create and stick to credit card rules. You can find it here. One big thing about using credit cards for smaller purchases is that if you don't pay off the bill every month, interest can add 20% or more to the cost of that item, depending on how long you take to repay.

The CFPB suggests that you look at your last monthly statement for each credit card and circle all the purchases you made that are under $20 for example (although you can set the limit wherever you want). How much did you put on that credit card that you could have paid cash for? If you are putting everything on your credit card for the rewards, how much did those small purchases actually reap you in rewards?

Next they say you should set some rules about what and when you pay cash instead of using your credit cards. For example, "I will pay cash for anything under $50."

Finally they suggest you write down your rules and sign it as a promise to yourself. Keeping a copy on the wall near where you pay your bills or in your wallets is a help as well.

Dave Ramsey is quoted as saying that banks aren't helping you by giving you credit. It is a product they are selling to make money. Keep that in mind. Keep more of your money by using more cash and less credit. You could find the savings adding up sooner than you think.