Individuals with a history of financial difficulties tend to avoid using credit cards. There are certain advantages to using cash for transactions, but there are also numerous advantages to using credit cards. There are many benefits & rewards that come with using a credit card, but they are not always enough to win the cash vs. credit card debate. The interest costs on credit cards, for example, may quickly add up if you carry debt from month to month.
That doesn’t mean that cash always wins in every cash vs. credit card duel, as cash has its own drawbacks. As a result, cash can be dangerous to carry and obtaining it, especially outside of banking hours, can be difficult. The cash vs. credit card debate is examined here.
The argument in favour of Cash Purchase
There’s still a place in today’s digital world for cash. Simply because it’s the only form of payment accepted by many smaller establishments that don’t take credit cards. It’s also useful for events when the lineups for those only able to pay in cash are shorter and move quickly. And if your car breaks down and you need a midnight tow, that spare $100 dollars in your glove compartment might save your life.
Another option is to pay in cash. Customers who pay with cash might sometimes get a discount at smaller businesses. Because credit card processing rates are already so high, petrol outlets appear to prefer the practice. To top it all off, cash payments encourage shoppers to stay in the store and make further purchases. Another area where cash trumps credit cards in the cash vs. credit card debate is hard-line budgeting. Due to this, a large number of financial experts advocate for cash-only budgeting. Envelope budgets and other low-tech methods of budgeting may be incredibly successful since if you run out of cash, you’ve spent all of your money.
Credit cards have a strong case
As handy as cash may still be, credit cards offer a number of advantages in the cash vs. credit card argument. For example, while cash is still the most generally accepted method of payment, credit cards are accepted practically everywhere in the U.S. these days — even some establishments that are now forgoing cash totally. In addition, a large number of services have taken a position in the cash vs. credit card debate.
In order to prevent having too much cash on hand, many hotels and rental vehicle services insist that you have a credit card with you when you reserve a room or a rental car. Credit cards allow you to purchase even if you don’t have the cash on hand to pay for them right away, which may be a source of frustration for some people. If you need to buy groceries or pay your bills while you wait for your salary to clear, this is a great option.
A good credit score may be built simply by using a credit card and paying your bills on time. In the cash vs. credit card debate, credit cards also come out on top in terms of safety and security. Users of credit cards are shielded from fraudulent credit card transactions, but those who carry cash are doomed to worry about misplaced or stolen cash. Due to the fact that most companies provide zero fraud liability, you’re not responsible for anything. Even if you are held guilty, the fine will not exceed $50.
Cash vs. credit card debates often focuses on incentives, although we haven’t even discussed that yet. There is a minimum of one per cent cashback offered by nearly all credit cards with cash back rewards, and some provide as much as six per cent cashback on certain daily transactions. As a result, you’ll discover endless stories of people using their credit cards to rack up free flights and hotel stays. In addition, Visa, Mastercard, American Express, and Discover all provide their cardholders with additional perks. Renting a car and purchasing travel insurance are only two examples of what may fall under this umbrella term.
When faced with the decision of using cash or a credit card, there is no one proper solution. There is a time & a place for using cash and credit. For every purchase, there are both pros and cons to each payment option. Credit cards are an excellent option to make most purchases if you don’t have difficulty keeping up with your payments. There are of course some advantages to using a credit card over a debit card or cash, such as better fraud protection, incentives on purchases, and the potential to develop credit.
The same may be said about having at least some money on hand. Cash-only transactions might save time while you’re waiting in line at a store that doesn’t take credit cards. Moreover, if there is a power outage or a failure in a card reader, cash may be the only way to proceed with your transaction and your day.