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Cash or Credit Card: Which Should You Use?

In our fast-paced world, you might think it’s easier to hand over a card to make your day-to-day purchases. After all, it takes more time to pull out cash, count it, hand it over, and wait for the change!

Credit cards provide convenience and a list of benefits that cash doesn’t. Credit cards also represent the opportunity to fall into a cycle of irresponsible spending and debt that can have long-term consequences.

So what are the best times to pull out cash? And when is it better to swipe that credit card? Keep reading to learn more about when to use cash or credit cards.

Credit Card Pro: Security First

With the number of fraudsters and scammers out there, security is on everyone’s mind. When you use cash to pay for something and there is an error, you might be out of luck. Plus, if your cash gets stolen, there’s usually no getting it back.

Credit cards are far more secure. If your credit card is stolen and used fraudulently, a quick call to a representative at Best Reward will help fix the problem. We can also cancel your credit card to help prevent any misuse in the future.

This level of security is essential when shopping online. A credit card with Best Reward will allow you to feel safe and confident in your online purchases.

Credit Card Pro: Improve Credit Health

Credit scores are a direct reflection of credit health. Your score is always used to make a lending decision whether it’s for a credit card, mortgage, auto loan, or something else. There are a few key credit behaviors that influence your score, but the majority of your rating is determined by two factors: payment history and amount of debt.

If you pay cash for everything, your credit score isn’t impacted because there is nothing for lenders to examine. Having no credit can be as challenging as having poor credit! Even having a single credit card can help improve your credit score as long as you make on-time payments and keep your credit usage low.

Credit Card Pro: Earn Rewards

Here at Best Reward, we offer a variety of credit cards to fit your needs. Earn rewards for travel and merchandise simply by using your card for purchases. This is a major advantage to using a card versus cash for your purchases!

In addition to our cards that earn rewards, we also offer payment protection and no annual fee. Whether you’re looking for a simple credit card, trying to build or reestablish your credit, or want to take full advantage of rewards — there’s a card here for you!

Cash Pro: Debt Management

An advantage of using cash is how it helps to control your spending. In most cases, it’s easier to spend more with a credit card instead of cash. Cash can help curb overspending and keep debt management simple. It’s easier to be more mindful of spending when you’re parting with cash.

Maybe you’re trying to stick to a monthly budget? If you’re worried about overspending, withdraw a set amount of money for an outing, a weekend, or the week. Cut off your spending when all your cash is gone and challenge yourself not to take out more!

Cash Pro: Go Interest-Free

If you don't pay your credit card balance in full each month, the interest you accrue on your purchases will end up costing more than the original purchase. With time, a $50 pair of shoes could end up costing you $100 or more.

The higher the outstanding balance of your card, the more interest you're charged and accrue over time. The only additional cost associated with cash use, on the other hand, is the possibility of an ATM charge for withdrawals from your debit card. ATM fees are a low expense and are typically easy to avoid. Visit any Alliance One (ATM's owned by other credit unions) and MoneyPass (US Bank Locations Only).

Note that If you use a debit card regularly (as your form of “cash” versus paper money), keep track of what you're spending. It's not uncommon to use a debit card and overdraw your accounts. You might choose to use your debit card for certain monthly purchases or bills, but use cash for most day-to-day spending to help you keep your budget and balance in the green.

Cash or Credit: Which to Use?

While you might prefer to pay cash for your expenses, using a credit card helps to track your expenses, provides the opportunity to earn points or travel rewards, and includes fraud protections. None of these benefits are available when you pay with cash.

The bottom line for credit card usage is making sure you use it responsibly and pay your balance in full each month to avoid extra expenses!

But cash can be useful if you’re in the process of obtaining a mortgage or other loan and need to stick to a clear budget. It’s a best practice to resist any urges to shop for new things your home or car may need that you can’t currently afford. Any changes to your creditworthiness could affect your credit score. Using cash ensures you’re only using what you currently have.

Choose Cash or Credit Card With Best Reward!

At Best Reward, we strive to help you make wise financial decisions and work toward success. That includes managing and using credit! We have a credit card that can work for you as well as resources to help guide the way. No matter how or when you use a Best Reward VISA Credit Card, you’ll know we’re on your side.

Click below to choose the Best Reward VISA Credit Card that best suits you!

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