Personal Development, Business, Finance, and Investing for Everyone
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Is it better to pay with cash or credit or debit card?
When it comes to spending, paying cash is usually the best bet. But there are times when it makes better financial sense to use a credit or debit card, as long as you handle your credit responsibly and pay off your full balance every month. Make sure you know which features your credit card offers—don't just assume—before making the purchase.
When should cash or credit cards be used for payment?
Cash use means handing over physical money or paying by check (either paper or through online banking).
Bills that charge fees
Some recurring bills like utilities or health insurance premiums charge a small fee when you pay by credit card, so only use cash for those bills.
Paying off debts
If certain bills like medical bills are getting out of hand, negotiate a plan with the creditor, which almost always costs less than paying by credit card and racking up interest.
Small, everyday purchases
Putting daily lattes and lunches on your credit card can land you in debt and stick you with interest payments that end up costing more than the original charges.
Credit card use means you're borrowing money with a promise to repay the loan, possibly with interest.
Debit card use pulls cash directly and immediately out of your bank account.
Was your online purchased item lost, stolen, or damaged when received? Some credit cards have a Purchase Protection Insurance feature that covers you in these kinds of incidents. The purchase protection insurance for credit cards is a benefit that allows the holder to reimburse and replace their loss, stolen, and damaged purchased item. This feature tends to protect the parcel from any eventualities, especially those likely purchased through overseas online shops.
Price protection (depending on the credit card company)
If you buy something and then find the same product for a lower price within ninety days, some credit cards will refund the difference to you.
Extended warranties for electronics
Most credit cards offer automatic extended warranty coverage on electronics and appliances.
Hotel stays and rental cars
Paying for these services with cash or credit or debit card often requires a hefty deposit or a hold on your bank account, making universally accepted credit cards a much easier choice.
Lost or stolen credit cards are easily replaceable, cash is not.
Open a 0% interest store credit card account when you make a large purchase like a sofa or washer, or even a dryer, as long as you can pay off the purchase during that 0% interest period.
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ABOUT THE BLOGGER
Hi, I'm Ralph Gregore Masalihit!
An RFP Graduate (Registered Financial Planner Institute - Philippines).
A Personal Finance Advocate. An I.T. by Profession. An Investor. Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy).
Currently, I'm working my way toward time and financial freedom.