As I read financial blogs, I find that a lot of bloggers seem to like to pay for everything with their credit card. Why not, they ask? You can get rewards or cash back, the credit card company tracks all your purchases for you and may even show you a yearly statement indicating the percents you spent on that card in various categories.
Credit cards are handy in a lot of situations. If you travel, you no longer need to get travelers checks to make sure you can handle emergencies. Online shopping screams for a credit card transaction. Credit transactions are somewhat protected. However, you can pay cash for online purchases. Walmart has a program where you can order online, print a receipt and pay within 24 hours at a local store. Other options, such as CashPayment and CoinStar also exist.
Why bother going to the bank to get cold hard cash, when you can just charge it?
Time author Martha C. White in 5 Times you should always pay cash, seems to think that for the most part, you should pay cash to help out the little guy – so they don’t get hit up with all the credit card processing fees, or so the waiter can have his tip today.
I have other reasons. Here is why I use cash in certain situations.
It keeps me from spending more.
If you know you are going to have to refill the till (i.e. hit the bank for more cash), you probably are going to keep close tabs on what you are spending. If you are growing short, you may decide not to stop at Dairy Queen to buy a round of ice creams for the team – if you have to part with cold hard cash.
It isn’t traceable.
Every credit, debit and check transaction is traceable back to you. Most of the time, most of us don’t care if there is a database somewhere that says “Marie bought a 12 roll pack of toilet paper on 2/10/13 at a certain Walmart for a certain dollar amount. But, there may come a time when we regret having every detail of every transaction in our life available for review.
If you pay with bills, no one will know what you are buying. It is a privacy issue.
It is accepted most everywhere.
At least now, in 2013, there are still places that do not accept credit, or may not accept the credit card you have. We visited Clinton Missouri with our kids a while ago. We stopped for lunch at the local branch of a national franchise. My son tried to pay with credit, they said no. He tried to find an ATM, there wasn’t one close by. Luckily we were there and covered his bill.
It can’t be declined.
There is no possibility of a screw up with cash. Your cash won’t be refused, as a credit card can be. No one can hack into your cash account and spend it for you.
You don’t get the ‘credit card hangover’.
Although we enjoy the convenience of shopping online and do use credit cards to do so, we hate it when the bill comes for something we have already used up or given as a gift. It feels like a hangover, paying for things you already have received!
You learn cash flow management.
With a credit card, you don’t have to be accountable for your cash flow. Using cash forces you to understand the cash you have available to spend.
You might get a discount.
There are some businesses, according to BankRate, that encourage use of cash and which give a discount if you pay with it.
You have a psychological advantage.
If you are in a negotiation situation, and can flash the cash, you have a psychological advantage over your counterpart. Seeing the cash makes it easier for the other guy to agree to your terms at times.
Do you use cash? Why or why not?