Everyday Loans for Everyday Life

 

 

Four reasons against paying with cash.

We’re in a digital world now! Although many of us grew up relying on cash, the benefits of using credit and debit cards are not so significant that its’ worth reconsidering your spending habits.

Cash is convenient, there’s no doubting that. It’s straightforward and you don’t need to think about your purchase too much. It’s also the pillar of any night out – often to your wallet’s detriment the morning after!

The problem is, it’s up against stiff competition. Using a credit or debit card gives you a range of protections should the worst happen, as well as the potential for enticing benefits financially. While it’s unrealistic to suggest you should never use cash in future, many people could benefit in ways they were never aware of should they adopt spending practices that are more plastic oriented.

Let’s review the arguments in favour, then. You might be surprised at what you learn.

You get rewards

Financial benefits for the careful and responsible spender. Credit cards love bringing in new customers and the industry is perpetually competing to market the most enticing deals.

These will vary from bank to bank. You’ll either expect a reward of some kind, such as loyalty rewards or discounts, or a straight cashback benefit. Both, when managed responsibly, can help make your money go further with little to no effort.

The caveat is obvious: don’t miss payments. It’s sound advice to set up a direct debit to your credit card account if you settle into the practice of reaping rewards through its use. You need to consider carefully how much you want to leverage rewards and you should always do so only if you can pay the outstanding amounts entirely (yes, in full) every single month.

You’re protected

Fraud is real, and it’s scary for a good reason. We’ve all heard the stories of dodgy builders who offer discounted work in return for a VAT-free cash payment. Not only is it illegal, it’s a risk that isn’t worth taking.

Once you hand over that money, you’re much less likely to get it back if needed compared to plastic. Debit and credit cards now all offer chargeback protection, so you’re covered if you are overcharged or haven’t received payment for the goods and services you invested in.

This protection also extends to things you’ve purchased that are faulty. This is a common situation; payment problems don’t always involve directly malicious sellers. If you buy something with cash and it breaks within warranty, you have less power to negotiate a refund or replacement.

You have a log

Beyond rewards and protection, a simple benefit all of us enjoy is the visibility of any card payment.

You’ll see withdrawals of cash on your online statement, certainly. What you won’t see is the specifics of the merchant, company or product the cash went towards. If you’re serious about saving to any degree (and we sincerely encourage you to be!), you’ll understand the value of keeping maintenance down to a minimum.

While it’s possible for you to remember or keep your own log of cash payments, it’s fuzzy and unreliable at best. It also adds another barrier of effort to saving. This is a big deal mentally – you want your finances to be as transparent and low-effort as possible. It makes you more likely to put in the work to manage them properly.

We’d all love to be perfect savers and impeccably disciplined people! The reality is, the easier it is to save and manage your money, the more reliably you’ll do it.

Time to try?

You don’t have to make the change all at once. We’ll always recommend that you do things in increments when it comes to money. Instead of using cash all month, why not try two weeks where you’ll rely on the card instead.

Can we help?

We’re happy to see you visit the blog! We hope you find this article useful in managing your finances. If current financial situation could use a little boost, Everyday Loans is here to help! Simply enquire on our website main page.

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Tim Woodley
Financial Content Editor at Everyday Loans
Tim Woodley has been a financial copywriter for over 8 years, using his experience and skill to draw out and discuss interesting financial subjects and learning points that help make life better. https://www.linkedin.com/in/tim-woodley-725267133/