How would you like to earn a safe and easy 24 percent to 70 percent on your money? The answer may be simpler than you think. Stop using credit cards.

	Daniel Marsula/Pittsburgh Post-Gazette

We hate to be the bearer of bad news as the holiday season gets ready to kick into full gear, but this simple savings strategy that everyone can do came to us while having dinner recently with a friend from Sharon, Mercer County.

Our friend was stunned when we both pooled our cash to pay the restaurant bill, instead of unveiling a piece of plastic. "Don't you want all those frequent-flier miles?" he queried.

Paying cash as much as possible has become an integral part of our personal savings plan, we explained. It's automatic, and it makes us think much harder about how much we're spending. Not only do you save on hefty interest charges and fees by paying cash, but behavioral studies indicate you also are apt to buy much less when you pay with cash than with a credit card. When we don't make purchases with cash -- which isn't too often -- our balance is always paid off within the credit card grace period.

Our friend thought carefully about our revolutionary savings strategy. Yes, he agreed. If he and his wife stopped using credit cards entirely, they, too, could do substantially better than they've done lately in the stock market.

It's tough to find firm industry statistics to quantify exactly how much you can save by paying cash rather than using credit cards. However, GE Consumer Finance, Stamford, Conn., which according to The Nilson Report, Oxnard, Calif., is the largest company issuer of store credit card programs, seems to validate our strategy.

"Measured with a diverse group of retailers, spending by [store-issued credit cardholders] averages from 24 percent to nearly 70 percent more per purchase," GE Consumer Finance sales literature reports.

Guess whose pockets that 24 percent to 70 percent added purchase price is coming from? Those of us who carry the GE Consumer Finance credit cards!

Other triggers that can cause you to spend more are higher credit card limits and loyalty credit card programs -- which typically offer points toward store merchandise or airline travel. GE Consumer Finance claims that such loyalty programs can tack on another one-tenth to 2.05 percentage points in sales over and above the already higher purchase price triggered by store credit cards. Again, those additional store profits come straight out of our pockets.

H. Spencer Nilson, founder of The Nilson Report, says it's tough to document exactly how much more you'll spend if you have a credit card with a loyalty program, such as frequent-flier miles. But the loyalty programs are clearly profitable -- for those that issue them, that is.

If they weren't profitable for those that offer them, Nilson assured us, issuers would not offer them. The bad news is that if they're profitable for the issuers, they're apt to be unprofitable for us.

Families could find themselves particularly vulnerable to the traps of credit card usage, based on research we've discovered.

"Married households are more likely to use store cards [which carry some of the highest interest rates and fees] than unmarried households as a financing and payment medium," suggested the Journal of Consumer Affairs in the winter of 2002.

The journal's report also indicated that:

The less affluent you are, the more likely you are to carry a balance on store cards.

The more educated you are, the more credit cards you're likely to have, but the less likely you are to carry a balance.

The older you are, the less likely you are to carry a balance on a credit card.

It's true that there are some benefits to using credit cards. In fact, certain benefits might actually be greater with credit cards than they would be if you were to pay by debit card or checks.

Those benefits, according to the journal article, include:

The convenience of not carrying cash and checks.

Your limited liability -- $50 -- for a lost or stolen credit card.

Enhancements, such as the additional consumer rights you have to dispute a charge, and perks, such as frequent-flier miles, points or bonus dollars for frequent credit card usage. So credit cards can be a particularly attractive way to pay for certain major purchases and a safer way to pay for purchases made over the telephone and Internet.

But why not -- at the very least -- cut out all those minor credit card purchases that line the lenders' pockets and do nothing for your family's bottom line except put you further into debt?