You know, obviously you are right. But, I think people (especially intelligent HN type people) greatly underestimate how much psychological tricks affect them. I know deep down that spending with credit card is the same as spending with cash. But, I tracked my spending using cards and only withdrawing from ATMs and using cash. I spent about 20% more. And my life didn't feel any better or anything. Now I use credit cards on the big stuff- like travel, transportation costs, and other large ticket items where credit versus cash is unlikely to affect me spending habits. Point is, you get some tiny cash back, but I think for 99% of people you spend more than you get.
I find it's easier to track spending by credit card.
I download a csv of my transactions, import into ledger (https://github.com/jwiegley/ledger/wiki/ it's like mint, but for the command line), then just "ledger balance --cost expenses". All my CC transactions are labelled ("expenses:entertainment:bar", "expenses:computer:github"), then I have a big black box: "expenses:cash".
This is actually the reason McDonald's started taking credit cards. Studies find this again and again that people buy more when putting it on their credit card.
Do you think giving 2% cash back is just the credit card companies being generous? They are making way more through that scheme. Plus, those cash-back cards generally take a higher percentage which will lead to higher prices to compensate.
I'm the opposite, when I withdraw cash and spend it, I have no idea where it went. When it is electronic, then my weekly accounting will show me where I've been spending money and I'm more careful with it.
The best thing I ever did to save money was to track where I'm spending it.
