Pay with Plastic or Cash? (2024)

FAQs

Is it better to pay with cash or card? ›

Your spending habits will help settle the cash vs. credit debate. Cash is better if you tend to overspend or need help maintaining a budget. Credit cards will help build credit and earn rewards if you spend more responsibly.

1. CARRYING CASH MAKES YOU A TARGET FOR THIEVES. If you're fully committed to the cash envelope system, one of the disadvantages of using cash means you'll always be toting around cash—and sometimes a lot of it, especially after payday.

Credit cards provide security. If you lose paper money, chances are it's gone for good. But credit cards have you covered in a few ways. You can cancel a lost or stolen credit card, and thanks to the Fair Credit Billing Act, you're protected from fraudulent charges (anything over $50).

Risk of theft: While carrying a small amount of cash is fine, having too much on hand can be risky. If your cash ends up being stolen or lost, you're out of luck. The chances of recovering it are slim unless someone finds it and is honest enough to give it back.

In the modern age, it's all about fast transactions provided by credit cards. Cash may be king, but "buy now, pay later" reigns supreme. While there are many benefits to purchasing with a debit or credit card, sticking to cold hard cash for your routine daily transactions may ultimately help your wallet.

With cash, it's easier to have a sense of what you're spending. "If you're using cash in particular, real paper greenbacks, when your purse or wallet is empty you're done, so you can limit your spending in that way," Griffin says. For some people, being restricted to using only cash may be a better approach.

Cashier's checks and certified checks are typically considered as good as cash and often clear faster than personal checks. In many cases, these checks are available for use by the payee within one business day after deposit.

Why do people prefer cash over check? ›

You may want to pay for purchases with cash for various reasons. Those reasons include lack of a bank account, unfamiliarity with the banking system, mistrust of the system or general convenience. If you do choose to pay with cash, you should know how to do so safely.

“We would recommend between $100 to $300 of cash in your wallet, but also having a reserve of $1,000 or so in a safe at home,” Anderson says. Depending on your spending habits, a couple hundred dollars may be more than enough for your daily expenses or not enough.

Convenience

When you pay for a product or service with a debit card, there's no exchange of paper bills or coins. For example, if you want to buy something at the grocery store, open your mobile wallet and tap to pay with your debit card instead of fumbling through your wallet for cash.

Though it isn't always avoidable, paying with a debit card at retail stores can make consumers vulnerable to skimmers. An alternative to swiping your debit card is using a contactless payment method.

While debit cards and cash offer consumers limited benefits, using a credit card can help protect you against purchases that go awry. A credit card is guarded from fraudulent activity and some offer benefits like travel insurance and return protection.

Using only cash has a big advantage, as Manktelow-Pimm pointed out: “When you use cash, you don't have to worry about interest charges on credit cards or loans. This can save you a lot of money in the long run.”