Cash and credit are examples of payment method that we can use in our daily needs.
Credit allows us to borrow money and pay it at the end of the month or pay an interest fee.
Cash is most commonly used for transactions, for every purchase you just hand over the bills or coins to the register to pay. No online transaction or bank transfer is needed for this form of payment.
Should I pay cash or credit? It depends on the situation.
The smartest thing to do will always depend on your situation and how you manage your money.
For example, you want to use your credit card in buying an item to avail the rewards or you want to purchase an item but you don’t have enough cash to pay so you will use your card instead.
While some people prefer to use cash so that they can easily pay the items or spending cash is emotionally harder for them, so with that mentality, they can save more.
Spending through credit can keep electronic records of your purchases. It can help you track your spending easily and check where your money goes.
For cash, it’s hard to do a list of your purchases manually, eliminating this step can save you time and will help you evaluate which spending habits should you eliminate.
Here are some quick tips on when should you pay using cash or credit.
When to use credit:
- If you want to insure your spending.
2. Making online purchases
3. Keep a record of your purchases.
4. Limit cash and coins in your wallet
When to use cash:
- If you have current credit card debt
2. Making small purchases for small business
3. Unable to pay bills on time
4. Spending habit problem
As mentioned above, explore which payment method works for you. We work hard to earn money and we should value it, spend as long as you can pay for it.