Cash or Credit Card: Which Should You Use?

Criticize. beep. consent. Another 5 euros of coffee will be charged to your credit card. It’s the third discount of the week, but you tell yourself it’s much easier to pull out your card than it is to dig through your wallet for exact change.

What you may not realize is how quickly that 5 euro fee can add up and how much it actually costs to use a credit card instead of cash.

Cash or bank card: What are the advantages of cash?

If the debate between cash and bank cards were a boxing match, cash would surely win. Read on for all the reasons why paying cash is better than swiping your card.

You can only spend what you have

be careful : When you use a credit card, you are not actually using your money. You are just racking up a bill that you will have to pay later.

On the other hand, paying cash saves you from spending money you don’t have. This means that if you exceed your grocery budget at the beginning of the month, you will feel it at the end of the month.

And when you realize that you do not have an endless stash of money on hand, you are more likely to change your money habits. Believe us, seven days of tuna sandwiches can be your best defense against an overdraft.

You spend less when you use cash

A study revealed that psychologically speaking, using a bank card is less painful than cash, because it appears you are spending “future” money instead of current money.

There is just something about the physical handing over of hard-earned cash that makes you think twice before spending it. You are more likely to stick to your budget and find ways to stretch your finances, such as shopping and making sales.

You can do great business with cash

There is no better bargaining chip than a pocket full of cash. Vendors go wild as soon as they smell these Benjamins. If you are buying an expensive item, such as a car, offer to pay cash. This gives you great flying power – which will leave the seller saying “Wait, please come back!”.

By paying with cash, you reduce the risk of identity theft

According to the 2021 Identity Fraud Study, criminals stole $13 billion in 2020 by stealing people’s personal financial information.

Every time you swipe your card or enter your card numbers online, you increase the risk that your personal information will be compromised. Raise your hand if you want your identity stolen. person ? Therefore, use cash to keep your personal information to yourself.

Cash has no fee

Think of all the times you’ve run to the dollar store to buy a few items… only to find there’s a minimum amount you have to pay to use a bank card. so what are you doing You add a few packs of gum and you end up spending more than you expected.

Or imagine this: You discover the perfect tomato at your local market. But Farmer Joe’s only takes cash. You may be able to find an ATM nearby, but that will probably cost you a few euros in service fees. And he also said that the fermier Joe disposait d’un distributeur de cartes bancaires, de nombreux propriétieres de petites entreprises sont facturés pour chaque utilization, ce qui signifie que vous devrez probablement payer des frais de commodité (ce qui n’est pas très pratique pour vous , is not it ?).

In any case, you pay extra for using a bank card. (Don’t even get us started on the credit card annual fees.)

Paying cash means you own and not owe

Unlike credit, when you buy new shoes with cash, you don’t have to worry about payments or interest. These shoes are for you. End of discussion.

And a study found that people who pay cash have a more positive relationship with the items they buy. You’ll enjoy the new transmission, your own upholstered reading chair, and even your kids’ Cap’n Crunch even more if you pay with cash instead of a card.

Cash or Debit Card: Common reasons people use credit cards

Now that we’ve covered the benefits of using cash, let’s take a look at the most common reasons people use bank cards — and why cash is still the best option.

Reason 1: I will blow all my money because I lack self-control

fact : Unbridled spending is often a symptom of a larger problem. Bank cards exacerbate this problem – they are designed to make you spend more, owe more, and pay more in interest. But everyone needs a plan for their money, regardless of their preferred payment method. To control your expensesIt’s not about the cash or credit card, it’s more about changing your behavior and sticking to a budget.

Reason 2: I can’t use cash to buy things online

fact : Two words: debit card. We get it – the world has changed and many of us now do most of our shopping online. This is where a debit card comes in handy. It’s the only cash payment method we accept, and it’s just as secure as using a credit card. The only difference? Debit card does not put you in debt!

And don’t be fooled by “buy now, pay later” scams when browsing online stores. Another easy way to get into a debt trap is with annuities.

Reason 3: It’s easier to book travel with a credit card

fact : Travel is one of the main excuses in the cash vs credit card debate. But you can still rent a car, book a flight, or reserve a hotel room with a debit card.

Some places may hold your card temporarily (in case of damage). But as long as you have enough budget for your trip and have a little margin in your bank account, this shouldn’t be a problem. Just call ahead and ask for the reservation amount so you can schedule it.

Reason 4: It takes a long time to withdraw my money from the store

Reason 5: I get a refund using my credit card.

fact : Here’s the situation: “cashback” isn’t really cashback in your pocket. You usually have to spend thousands of dollars on a bank card to get that $100 back. This amount goes directly to your credit card account. You don’t really get a chance to put a new note in your wallet.

Despite the promise of enticing rewards bank cards will often cost you more in the long run. Between late payment fees and interest, it’s easier than you think to fall into credit card debt. The idea of ​​cash back may sound great, but it’s just a backdoor way to get you to spend more than you would otherwise.

You can live a life without credit.

We know you can’t pay for everything with cash. But using it when you can can make a huge difference in helping you spend less and stick to your financial goals. And if you really want to keep more money in your pocket each month, you need to find a way to control your spending.