Credit Cards Vs Cash

It is not uncommon for a finance-conscious consumer to always ask himself a question at the checkout counter. Will he pay in cash or use credit cards? For him, this is a significant question as it could either give him savings or debt. But how exactly would he know if paying in cash or using a card is the best option? Before he can sum up an answer, he must know first the pros and cons involved.

Cash

This is a no-brainer solution. When he decides to pay in cash, he gets out of there with his purchases without any credit card debt. Whatever amount he has in his wallet or account is the only cash he will have to spend. Also, this way he wouldn’t have any temptations. He will prevent buying more than what he needs and can afford. He is able to spend within his means and have no regret later with his purchases. Probably, this is the most important lesson paying in cash teaches people.

However, paying in cash is only good when indeed this consumer has cash available. What if his funds dried up but he urgently needs some items? Without cash, who knows what will happen. He may miss something very important or not have cash for an emergency.

Credit Cards

Situations like this are the reason why the best credit cards were made available. In times when consumers do not have available cash to supplement their needs, they can simply lash out these plastics. They can use them to charge to their heart’s content as long as it does not exceed their credit limit. Now this is the biggest advantage of credit cards. A consumer does not have to have cash in order to afford things, however insignificant they may be.

But what are the things he must be cautious of? One, using a credit card for small purchases may not be worth the interest rates. It does not matter how small they are. When he keeps charging his small purchases, the fees could add up. When he fails to complete the payment, he can greatly get affected by the APR. So what used to be his mini purchases can now cause a great dent on his credit and possibly credit score.

If he should charge a purchase, it is advisable to do so in large items. This way, when something happens along the delivery for instance, he is not responsible for it altogether. His purchase is protected under the federal law thus his cash and account is not affected at all.

Jesse Graham, co-writer for The Boss, shares her insight on money matters. The Boss has multiple comparison sites such as Money Boss and Credit Card Boss that can help people find the best loan deals. It’s tough times at the moment, so Jesse will help out where she can, with The Boss’ insight and Jesse’s writing skills, you’ll be saving and surviving on your wage!