Should I Pay with Cash or Card?
Q: When paying for my everyday and occasional purchases, should I be using cash, credit or debit?
A: When it comes to paying for our purchases, no matter the occasion, there’s often multiple choices.
So, it begs the question: What’s the best choice? The answer is not always easy, as some purchases should be paid for with cash, some with a credit card, and others with a debit card. Let’s take a closer look at each method and when and why they should be used.
When should I use cash?
Some retailers offer discounts for customers who pay in cash, making it the wise go-to in those scenarios. Also, if you have a tough time sticking to your budget when shopping, it can be helpful to only take along the cash you plan to use. Finally, know and remember that some businesses, especially small businesses, only accept cash.
On the flip side, cash offers no purchase protection and, typically, should not be used for large purchases. Also, cash leaves no paper trail, so it may be difficult to track expenses. Finally, cash always carries the risk of being lost or stolen. For these reasons, when sending payment via U.S. Mail or other couriers, it’s a best practice to avoid cash. Opt for a check or money order instead.
When should I use my credit card?
Credit cards are the double-edged sword of personal finance. Credit card debt is a leading cause of consumer debt. However, owning credit cards and using them responsibly is a powerful ally for building and maintaining strong creditworthiness.
Credit cards also offer two primary advantages: rewards and purchase protection. Many credit cards can earn rewards as you spend on them, so it earns you something for your use. The purchase protection a credit card offers also makes it the ideal choice when paying for large purchases. In addition, using a credit card and making on-time payments can help boost your credit score while also making expense tracking easy.
Ideally, credit cards should only be used to cover fixed or steady payments and for purchases you know you can pay in full when your next payment is due.
When should I use my debit card?
Debit cards allow you to track your spending and help you stay within budget since you can generally only spend what you have. In addition, if your card is lost or stolen, you can cancel it and/or close the connected account.
Debit cards can be a great choice for everyday purchases of any kind. However, since they usually don’t offer rewards or the same level of purchase protection as credit cards, they are not the best choice for large purchases.
Use this guide to help you choose the right payment method in every situation.
Sources: https://servicecu.org/credit-and-lending/cash-vs-credit-vs-debit-when-to-use-what/ https://www.citizensbank.com/learning/when-to-use-cash-credit-debit.aspx https://www.cnbc.com/select/cash-debit-or-credit-for-everyday-purchases/ https://cluballiance.aaa.com/the-extra-mile/articles/prepare/budget/when-to-use-cash-credit-or-debit
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