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Credit Cards Vs.Paying Cash Essay

Whether it's getting your groceries, paying your utility bills or eating out, you've got to be able to pay for your activities. How you pay is up to you -- usually. Credit cards and cash both have their pros and cons, and which one is best for you might be very different than what's best for your spouse or best friend.

Credit Card Advantages

Paying with a credit card offers several benefits besides just convenience. Each time you pay your credit card bill on time adds positive history to your credit report, improving your credit score. In addition, if you use a rewards credit card, you can earn cash back or other incentives. Finally, you have protection against charges if you lose your card. According to the Federal Reserve, $50 would be the most you'd be liable for in unauthorized purchases.

Credit Card Disadvantages

Paying with a credit card lets you swipe, forget about the bill for a month, and unless you've exceeded your limit, not let your future spending be hampered by your purchase. This can work against you. For example, if you budget $50 for new clothes for the money and you see a cute dress that's calling your name for $150, you can swipe your card and not feel the impact until the bill comes. And if you've overspent so much that you can't pay your bill, you'll have to pay interest at a high rate.

Cash Advantages

The biggest advantage to paying with cash is that you're limited to how much you can spend. If you don't have the money in your wallet, you're not able to just swipe away your savings. In addition, you don't have to pay a credit card company any annual fees when you carry cash. You don't have to worry about missing a monthly payment and having your credit card company sock you with late payment fees and interest. Finally, some companies don't take credit cards; they accept only cash.

Cash Disadvantages

Paying with cash forces you to carry around enough money to make all of your purchases. If you're just stopping at the store for a gallon of milk, this probably isn't a problem. However, if you're getting your groceries for the week, refilling your gas tank and buying a new suit, you're carrying a lot of cash. If your wallet is lost or stolen, that money's gone.

 

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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  • Hemera Technologies/AbleStock.com/Getty Images

Credit And Debit Cards Vs. Cash

Over the last ten years people in the United State and around the world have heavily relied more on their debit or credit cards to process transactions of their purchases. In the old days it used to be when you would get your paycheck on Friday and rush to the bank during your break or lunch in order to cash withdraw your funds or deposit them into your account. It used to be where you carry cash to buy groceries, pay bills, and go shopping. Now some people don’t even set foot inside their bank branch because they are paid using direct deposit or the funds are loaded into a debit card provided by their employer. Many employers from around the globe don’t even issue paper check anymore. Bills are often times paid online, babysitters are accepting electronic payment such as PayPal and even food trucks now take electronic payments. According to a Washington Post column by Michelle Singletary society and businesses embrace using cashless ways to pay for things than the old time traditional “cold hard cash”. In my opinion there should still be cash circulating out in the world. My first reason is that not everyone in the world takes only forms of electronic payment but also in the case of a city-wide emergency where there is no electricity there is no way to pay for items as a time of disaster. That would cause a panic among people who cannot obtain supplies. Some places are not that safe to use your credit card information that contains confidential identity that then it is quite difficult to fix fraud cases. Identity theft is a big issue that is hard to control and many skimmers who are always trying to steal your important information exist. According to article published by Bloomberg that big banks in Sweden are embracing a cashless society. Mostly of all the major banks in Sweden don’t even handle cash transactions anymore. They have claimed that it is costly to handle cash transactions and make more money with debit card transactions that they charge. They also claim to have less bank robberies since they are no longer carrying cash. Swedbank claims that most of their customers are...

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