Why It’s Better to Favor Credit Over Cash

When it comes to spending money, you may think it doesn’t matter where it comes from, it’s leaving your account one way or another, but while that part may be true, using credit can actually make more financial sense than using cash.  Now granted, if you are careless with using a credit card and the balance continues to pile up month over month without paying off, you can sink into debt pretty quickly, but if you are a responsible spender, then you can actually have an advantage using plastic.


Someone carrying a wad of cash is obviously a likely target for theft, and once the money leaves your pocket, it’s gone.  At least with credit, although it’s still an uneasy feeling if your wallet is lost or stolen, at least with a quick phone call you can cancel your credit card, and even if they beat you to the punch and start charging, you can easily dispute the purchases.  To take safety to another level, it’s probably still a good idea to watch your credit report, just to make sure your information doesn’t end up in the wrong hands, whether you use cash or not.

Makes it Easy to Travel

It’s surprising that places even today still favor cash over credit, but that doesn’t mean that credit is not accepted, they just may mandate a minimum charge to hit before you can run your tab.  By using a credit card when you travel, it makes it easy to make purchases as you would at home, without having to worry about exchange rates or withdrawing from the ATM, but just make sure you don’t have any foreign transaction fees, or if you do, just make sure they’re still to your benefit in lower fees compared to other payment options.

The Rewards Add Up

The best reason to use a credit card for every purchase is due to the rewards.  Just by even making the purchases you would anyways, you can watch the free money pile up in the form of points to redeem for gift cards, hotel rooms, or airline miles.  Some rewards cards even offer cashback in the form of a check to decide on your own where to use your newfound money.  As mentioned before, just ensure your spending is kept within reason, otherwise if you’re unable to payoff your credit card balance each month, you will start to be charge interest, which could cancel out any rewards you would have earned.

Builds Up Credit

Unless you have unlimited resources of cash, securing a loan for large purchases such as a home, car, even insurance, will require a credit check during application, which will not online decide if you are approved, but which rate and terms you are granted.  The higher the credit score, the more favorable interest rate is available to you, so as you charge and payoff your credit card balance each month, your credit score will continue to rise, proving a responsible borrower and keeping your own debt to a minimum.

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