In today’s world, the global economy is somewhat unstable with an ever-fluctuating market. You need to be efficient enough to keep track of your money and make a reasonable budget. After the introduction of the demonetization policy, India suffered a major cash crunch, and many people were forced to live without physical money. Due to the ever-fluctuating nature of the economy, you need to know when to use cash and when to use credit cards. This article is about considering the pros and cons of both and deciding which one suits your needs better.
Who is this article for
This article is for anyone who uses a credit card, be it a salaried professional, a homemaker or a young student. If you are in a place to apply for a credit card, you need to know how to use it well. Making sure to not overspend on your credit card is essential as debt can build up fast. Hence, this article is for you if you are looking for a way to figure out what your best spending options are.
Ease of access: The most critical part to remember while deciding between your credit card and cash is the ease of access. The ease of access keeps changing based upon the kind of financial situation you are in a while making a purchase. Your convenience always comes first so always remember that the choice is yours to make ultimately. Thoroughly analyze your credit vs. cash plans for purchasing something before you decide to go ahead and buy it.
Avoiding debt: If you are already under debt, it is always a good idea to spend cash and minimize the use of your credit card. This will go a long way in helping you make sure that you don’t land in trouble over your unpaid debts. Don’t use your credit card till you clear your dues.
Interest rates: If your bank is providing you with low-interest rates on the purchases you make with your credit card, go ahead and take advantage of the opportunity. But in most cases, banks charge high-interest rates on customers’ credit cards, thus making it hard to pay off debts. Try avoiding to use your card in such a situation and go for cash instead.
Acceptance: Most places accept cash over credit cards. People would instead prefer having money in hand, over being paid with a credit card. Especially in case of small businesses. So, unless the seller accepts credit cards, it is essential to pay for them. On the other hand, cash is the more straightforward and trustworthy option for the seller, as the transaction physically takes place in front of both parties.
Safety: When it comes to security, cards are always better than cash. It is much easier to lose your money or get it stolen, as compared to a credit card. Moreover, you can block your credit cards if they go missing and your money stays safe.
How can you benefit
Reading this article will give you the ability to judge your financial transactions better. It will make sure that you know the pros and cons of using a credit card vs. using cash and help you make a firm decision regarding their spending choice.
Are credit cards weighing you down? You can find out by analyzing your money IQ.