
Every day we are faced with the question – should you pay with cash or credit?
Many factors can influence your decision like whether or not you have the cash on hand, your card’s credit limit, the size of your purchase etc.
There are benefits to using both that we will discuss in this article. There is one main consideration, however, to always keep in mind. If you use a credit card for a purchase, will you pay off your balance in full each month? Your answer to this question will go a long way to helping you determine if you should use Cash or Credit on your next purchase.
Assuming you pay your credit cards in full each month, you have to consider the following:
Managing your money
- Do you spend less with cash or on credit?
- You can track your spending better with credit
- If you pay off your bill at the end of each month you basically get an interest free loan
- Do you have access to the cash right now?
- What is the size of your purchase?
- Credit Card Rewards = Free money (No rewards with cash)
We tend to use credit cards for just about everything because of the rewards, convenience, and security. However, this is because we pay off our credit card bills in full each month. If you don’t pay off your balance in full then you will be charged interest that wipes off the value of the rewards you have accumulated.
Take the time to figure out what the best plan for money management is for you and/or your family when dealing with cash and credit.