Do people still use cash nowadays? Nine times out of ten, I use my cards to make my purchases and surely I cannot be the only one. Fewer persons carry cash in their wallet. According to a survey on Consumercredit.com, 80% of the respondents use their debit card for every day purchases; only 14% of them use cash. Let’s break down the benefits for each payment method and see which one is better suited for you.
Cash
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It makes budgeting easy
Respecting a budget is much easier when you allow yourself a certain amount per day in cash. Seeing physical money can remind you to spend less because the money you own is limited. Not carrying cards gives you no choice but to watch your spending. It also leads to saving for your future plans.
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It limits overspending
According to Thecreditexaminer.com, for every dollar earned, an American spends approximately 1.33 dollars. One of the causes is the easy access to credit cards. Cards give an illusion of unlimited money to spend, which makes you overspend. They make you buy more than intended.
Credit
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Rewards
Most credit cards have reward systems. When you earn an amount of points, you get a reward. This can be either gift cards or cash depending on your bank. If it makes sense to use a credit card, why not get something in return? It is more advantageous than using cash.
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Credit score
Regular use of a credit card builds you a credit record. Better Money Habits agrees that the better your credit score is, the easier it will be for your request for a loan to get approved. Not using a credit card is bad for your score as banks have no record of your paying history.
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Convenience
Instead of constantly having to withdraw money from an ATM where you might have fees to pay, a card is a better alternative. It is easy to carry and convenient for daily purchases. With technology advancement, such as Pay Pass and Apple/Android Pay, it has become even easier to pay.
Both methods have their own benefits. The decision to use which one should be based on your personality and habits. According to Businessinsider.com, if you are someone that is forgetful and impulsive, you are better off using cash. The use of a debit card is perfect for those who want the benefits of using cash without the burden of carrying coins and bills. If you feel responsible and organized, you are ready to use a credit card. Careful with credit cards though, it can bring you into a very dark place. Nobody knows you better than yourself, so choose wisely.