>>When I spend cash, I get a little thrill out of NOT using a credit card
I always consider using cash expensive. I look at ATM fees as the avoidable premium for cash. Sure, there are ways to avoid those ATM fees (like always using your bank's machines and getting cash back with debit card purchases) but it's so much easier for me to track my expenditures by monitoring my credit card online statements. If I withdraw a few hundred dollars from the ATM, I'll have a difficult time reconciling what exactly I spent it on, especially during the monthly budget to actual review my wife and I do. By downloading the credit card activity into Quicken, I have a total population of my expenditures. If you throw cash outflows into the mix, things are not as clean.
If you factor in rewards points for using your credit card and if you pay your balance in full each month, it's difficult for me to justify using cash. I've been off cash for about 2 years (for the most part). By using your credit card for everyday operating expenses (food, gas, commuter fare, etc), you get to maintain your savings balance, earn 3.5 APY on your cash (or higher on better investments) and pay your balances in full each month. You avoid the pointless ATM fees and take advantage of the 30 day credit card float. If they are going to give me 30 days for free, I am going to take full advantage of that to maximize savings/short-term investment income.
