Should I use credit card or cash?

by Mike on September 10, 2013

should I use credit card or cash

Have you ever wondered why most people never seem to be able to save any money, let alone buy things that they actually can’t afford? This is not a result of suffering from a modern psychological condition such as oniomania which compels you to go on a marathon shopping spree as soon as that paycheck is in your hands. This is a mere personality characteristic in some people, which makes immediate gratification almost irresistible.

As immensely gratifying as it is for some to spend all our money as soon as we have it, some people get enormous satisfaction from knowing that their money is safe and sound in their bank account. These are the type of people who actually dislike spending their money.

A disciplined spending of money is very important, no doubt. But what is really the best way to manage and rationalize your expenses while still being able to put money aside every month? I’ve always asked bank managers, insurance agents and people from all kinds of economic professions: Should I use credit card or cash? My guess is that the correct answer is somewhere in the middle – spending responsibly.

Credit card money is virtual money to some extent. You log in to the ATM and you see some numbers but you don’t have the physical money in your hands. On the one hand, this makes spending much easier for some, because they feel as if the money isn’t theirs. In contrast, others restrain themselves from spending this money for the exact same reason – they don’t feel like they have the money.

On the other hand, having cash makes spending every penny just as attractive. It might even encourage spontaneous spending for the sole reason that you’re in a store, you have money so why not buy something? But for some reason, seeing the actual money exchange hands makes it that much harder to let go of it.

So should I use credit card or cash when buying something? I believe it’s best when I pay in cash because it’s likely, in positive scenarios, that I have more money in the bank than I have cash. Therefore, a good trick I always use when I go to stores that I really love is to exhaust whatever I have on me and then stop, so that I don’t end up spending too much.

Should I use credit card or cashCons for using Credit Card:

  • Currency is extremely easy to spend, no matter the method of payment.
  • You can easily log on late at night into your online poker account and spend all your funds on chips and tokens.
  • Credit Card money feels like it’s not real money making it very easy to spend.
  • You are able to take loans from the bank to achieve immediate gratification when buying an item instead of raising the necessary money.
  • Over the Internet, your credit card number as well as identity can be easily stolen. Identity theft is a huge concern when buying from online stores.
  • ATMs can easily malfunction and online payment methods might work at all.
  • Money transactions require certain fees in order to take place. These fees are set by the banks that issued the credit card.


Pros for using the Credit Card:

  • If you are ever in the need to pay for something, you can make a trip to the nearest ATM and take out as much currency as you want. This is a very easy way to take your money with you to almost any part of the world. You can also pay directly with the credit card.
  • You can buy anything you want online, at any hour of day and night. Websites like Amazon and eBay have a huge selection of new and used items that you can easily buy with a mouse click.
  • Paying with a credit card is fast and easy and does not require you to make any price calculations.
  • If you have an investment opportunity but you don’t yet have the money credit can be readily accessible. You have the option of taking a loan and paying back small amounts of money every month for a limited period of time.
  • Many banks now offer extra strength security options that ensure that neither your money nor personal information is given to third parties.
  • You can send money to someone who lives very far away.
  • You receive interest every year from the bank for letting it use your money.


spending credit card versus cashCons for using Cash:

  • You can lose or have cash stolen from you.
  • Cash is real money which makes spending it harder. This determines you to think twice before buying anything.
  • Transactions do not require any additional fee and there is no waiting period until it takes place; they happen instantaneously.
  • Cash can be easily destroyed by cutting, burning, ripping etc.


Pros for using Cash:

  • Currency is extremely easy to spend, no matter the method of payment.
  • You can always pay directly to the sales person.
  • It’s easy to get carried away when shopping and spend all the money you have on you.
  • You can pay cash absolutely anywhere in the world, from luxury stores to the local markets.
  • You have direct control over your funds and of what happens to each penny. If you suddenly decide you want to keep a certain amount of money in a piggy bank for five years, you can.
  • Cash cannot malfunction or be unavailable.


With so many pros and cons working out for yourself the choices of  spending credit card versus cash is almost impossible to answer from an objective standpoint. As I’ve said before, spending credit card versus cash is a matter of choice. Having cash money offers most people a sense of security that their money is in their possession. The thought of someone else administrating their funds, even a big bank, is still feared by many people. Although I prefer credit cards, I find that the best way to choose cash or credit card is to analyze the way you spend your money. If you want to make online purchases and payments, you definitely need a bank account and a credit card attached to it. But if you don’t really like technology and want to see exactly where your money is going, it’s best to carry cash.

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