cash and credit cards

Pros & Cons of Cash Vs. Credit Cards

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Both cash and credit cards offer conveniences. However, in certain circumstances you might be wise to favor one choice over another. Considering factors such as convenience, safety and cost will help you decide when to pay with cash or credit.


If you have both on you, cash and credit cards can be equally convenient to use. However, credit cards provide extra convenience if you generally don’t carry a lot of cash. Credit cards offer the convenience of not having to actually pay for your purchase until several weeks after you receive your bill. Responsible use of credit cards can also help your credit score, which benefits from having a long track record of on-time payments.


For the most part, paying with credit cards is considered safer than paying with cash. If you were to lose or misplace cash, or if it were stolen, you’d have little chance of recovering it. With a credit card, on the other hand, replacement cards are easily obtained and your liability for unauthorized purchases is generally limited depending on the terms of your creditor.


Credit cards are typically more expensive to use than cash, but you can avoid additional costs of either method if you use them carefully. Most credit cards charge high interest rates if you don’t pay your bill in full by the due date. Some credit cards also carry annual fees just to use them, along with foreign transaction fees, balance transfer fees, and late fees.

Cash is typically fee-free when it comes to making payments, but it can cost you to access cash. While in-bank withdrawals are usually free, if you take money out of an ATM you may get hit with fees of up to $5. Paying your bill in full and only getting cash from fee-free ATM machines are the best ways to ensure each purchase isn’t costing you a little extra.


Cash is generally accepted at most brick-and-mortar merchants, so you’ll rarely run into the problem of being forced to use a credit card. However, credit cards are more generally accepted among online stores. If you prefer shopping online, like many consumers do, be sure you’re taking precautions to ensure you’re not over-exposed online.

Additionally, some merchants will only accept certain types, such as Visa or MasterCard. Always having an acceptable payment method will ensure your convenience and satisfaction.

Paying with plastic or cold hard cash can offer many other benefits and drawbacks. Regardless of your preference, keeping an eye on your credit activity and personal budget will help determine what method of payments works best for you.

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This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

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