Cash or Credit: Which to Use?

Cash or Credit: Which to Use?
  • Opening Intro -

    If you are about to make a purchase, which should you use: cash or credit?

    Obviously, if you have trouble handling debt, then making cash payments is the sensible way to go.

    For people who are excellent financial stewards, there are some good reasons to use credit instead of money.


Let’s take a look at those reasons:

Delayed Payment

— When buying with credit, you delay paying out money that may be earning interest. Certainly, low paying savings accounts paying 0.25 percent aren’t much to talk about. However, if you’re looking to make a major purchase and your money is tied up on an investment earning 4 or 5 percent, then make the deal with credit. You’ll have as long as 45 days to cash in your investment and to pay off your debt.

Added Protection

— Your store may guarantee your cash payment, but it is your credit card provider that will guarantee that if there is a problem with your purchase, you’ll receive a full refund. Restrictions apply and plans differ, but with a credit card purchase you may be able to gain a level of protection missing with a cash purchase.

Purchase Points

— Many credit cards offer rewards with usage. For example, if you fill up your car with gas, some credit cards will give you a 5 percent discount or add points toward a gift. Some purchases such as airline trips and hotel stays carry higher point returns; in any case rarely will you get a discount for paying with cash.

Build Credit

— Making cash purchases has no impact on your credit rating. However, making use of credit does, especially when you use your card and make timely payments. Even small purchases paid off promptly will help improve your credit.

Theft Protection

— If your credit card is stolen, did you know that credit card companies will protect you if someone fraudulently uses your card or card number? You may still be responsible for the first $50 of that theft, but generally you can get that amount waived if you ask.

Lastly, if you have an online account, you can track your purchases in real time. This is also a fantastic way to ensure that fraud is caught quickly and stopped in its tracks. You can set up fraud alerts with your credit card company too, whereby text message alerts are sent to your cell phone, a message is sent to your email account or both.

Adv. — Are you looking to save money on your Christmas purchases this season? If so, visit nBuy Shopping Plaza for timely savings. Shop online for the best deals at Christmas and throughout the year.

Money Management reference:

card purchasing management

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Categories: Consumer Tips

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".