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3 Reasons Why Using Cash is Better than Credit

Reasons Why Using Cash is Better than Credit

In today's fast paced world, it's easy to pull out the good 'ole credit card to pay for purchases.

After all, pulling out the cash, counting it, handing it over, and then waiting for change simply takes forever!

OK, so I'm exaggerating a bit, but you get the point – it might seem inconvenient to pay with cash, or easier to pay with credit. However, the next time you go for the credit card, consider the following benefits of using cash instead of your card.

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1. Accrued interest adds up on credit cards

If you don't pay your credit card balance in full each month, then the interest you accrue on your purchases will end up costing you more than the original purchase.

With time, that $50 pair of shoes could end up costing you $100 or more, and the bigger the balance, the more interest you're charged and accrue over time. Interest compounds, so you're actually paying interest on the interest you accrue each month, as well.

2. Paying with cash vs. credit helps you keep your debt in check

It can be easy to get into debt, and not so easy to get out of it. In addition to paying more in total for purchases over time, you're also accumulating more debt if you don't pay your bills off from month to month.

Wouldn't it be nice to think that once a purchase is made, you're done with it done and won't be paying on it for months – or even years – down the road?

3 Reasons Why Using Cash is Better than Credit

The next time you go for the credit card, consider the following benefits of using cash instead of your card.

3. Cash makes it easier to budget and stick to it

When you pay with the cash you've budgeted for purchases, it's easier to track exactly how you're spending your money. It's also an eye opener and keeps you in reality as to how much cash is going out vs. coming in from week to week or month to month.

These are just a few of the reasons why it's better to pay with cash vs. a credit card. That's not to say there's not a time or place to use a credit card, but you want to be responsible when you do and have a plan to pay it off within a specified period of time.

Using debit cards vs. cash

On a final note, if you use a debit card regularly, it's also good to keep track of what you're spending, as it's not uncommon for people to use their debit cards and overdraw their accounts. You might choose to use your debit card for certain monthly purchases or bills, but use cash for most day-to-day spending to help you keep that budget and balance in the green.

Author Bio


Since 1937, PrimeWay Federal Credit Union has been a not-for-profit organization dedicated to providing superior financial services to members in the Houston area. We offer more personalized services than you'll traditionally find at more conventional financial institutions. Our hallmarks are low interest rate loans, higher dividends on deposits and excellent member services.

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