We use credit cards.
I know, it's shameful, but it is true. We like the money back rewards that they offer. We also like that we can download our purchases into quicken, which makes it easier to budget and track expenses.
When we were first married, hubby only used cash, and he always needed more. But we had no idea what he was spending the money on. Saving receipts was not a reliable option. So using credit cards has actually made us more accountable to how we are spending money. But this may not be true for everybody.
I also don't feel safe carrying around a bunch of cash in an envelope. Anti-credit card people recommend using a debit card instead of a credit card. But if we have our credit card paid from our checking account, how is that different from a debit card? Maybe I missed that lesson.
We also take advantage of the same as cash offers that different stores offer for making big purchases. We usually have the money in hand, but put it in an interest earning account, until it is due, and then we can pay it off in full.
But paying interest is not one of our budget items. If we had to pay a percentage every month, we would have to have a serious change in our lifestyle to just be able to afford to go into debt. It is so much cheaper to just live debt free.
Some people might consider the fact that we use credit cards as us having debt, so I admit, we are not purists. Maybe some day. I also realize that our kids may be getting a skewed viewpoint about money when they just see us using a credit card at the market or gas station. But it's not like we don't ever use cash. Besides, by the time my kids graduate, we may be on a moneyless system anyway, and this way they will have learned some self-control.