Cash Vs Credit Card: Which is a Wiser Option?


It is very common that many people credit and debit cards. Living in the age of convenience this should not be unusual. While some still use cash for purchases and it has some benefits, there are many reasonable factors to use credit cards.

Let’s nail down how they are different from each other and what method of spending your money is right for you.

Use your credit card when…


When you are globetrotting, use your credit card for your purchases. This is the ideal method to pay for your booking trip, getting a hotel to stay in, or a car rental. Better rates also await you for foreign exchange fees than buying currencies and using it in the country of your destination. Credit cards also offer convenience in traveling. You don’t have to carry your cash and make your wallet look bulky – that’s an added weight to your baggage. 

You want to earn rewards

Most credit cards give rewards just for using them. And some give you rewards in purchasing certain items. Some reward types are point rewards and travel rewards. Point rewards are awarded based on the amount of your purchase

You can also use this to purchase gifts for the holidays or birthdays. Accordingly, if you would like to learn more about some of the different types of rewards out there for card users, you can take a look at this credit sesame review.

To spend on work expenses

Some people have their own business and they make charges for their work expenses. Using a credit card is recommended in case you are unable to pay money upfront.

For example, when you need to buy supplies for your office you can use your credit card in paying for that purchase. If you have a business meeting overseas, you can pay for food, hotel and car rental using your credit card.

On the other hand, you can use cash on the following events:

For emergency purposes:

In emergency cases, having cash on hand to pay for things. We recommend that you must have at least $50 on your wallet in case of emergency.

Another way to prepare for emergencies is to stash some cash in your car at least around $300 in an envelope. This could come in handy just in case you forget to bring cash in your wallet.

When you want to have a stronger connection to the things you buy

A study found in the Journal of Consumer Research says that people are more connected to the things that they buy with cash than the things that they bought using a plastic card. It says that people feel a sense of pride on the items that they purchase and grow an emotional attachment to it.

If you use cash in your purchases, you are more loyal to a certain store which makes you more conscious about how much money you are spending.

When you want to control your spending

Having pieces of cash with you will help you see how much you have spent. Cash is a great way to put a cap on your spending because psychologically you don’t want to spend more money because you don’t want to see your cash dwindling.

Try applying the envelope system to budget your money instead of using credit sesame or debit cards and track your expenses. By physically seeing what’s left on your money, you might think twice if you want to spend more. 

When you want to make small purchases

If you want to buy something small at a store and they do not accept credit cards, you can use cash. These small stores encourage shoppers to buy using cash because credit cards charge 2% per transaction and most of these small shops operate with a small margin. Some stores allow credit cards but they require a minimum purchase before they process the payment. Using cash is one of the best ways you can do to support local businesses in your local community.

The bottom line

Credit cards can become a major source of the problem in the future because you could drown in bigger loans. Use your credit card wisely because debt can be costly. It is tempting to make purchases left and right because you know that you can swipe your credit card and not worry about the limit. Focus on the true value that credit cards bring and use cash as often as possible. If you don’t have cash on hand, hold -off your purchases if it’s not that important. Just always remember to be mindful of your budget, spend less and go for bargains.