Many people still prefer to use cash for convenience, but there are at least two situations when choosing a digital payment solution.
Although some personal finance experts say that using cash is a way to control spending and save effectively, cash is not always the safest and most profitable payment option.
“Cash does not protect against loss, theft or fraud that you can afford to do with credit and debit cards. There is also an expense for cash withdrawals, such as ATM withdrawals. , “Greg McBride – financial analyst at Bankrate told CNBC Make It .
Many Americans are ready to use cash. According to a survey, about 3 in 10 people say they may not buy cash in a normal week. Of course, there are still cases where cash is unavoidable, such as when dining at a restaurant that only accepts cash payments. However, with the following two situations, you should prefer to swipe a card or use other forms of non-cash payment instead.
Purchasing is of great value
McBride warns against using cash to pay for a large transaction for a number of reasons. Most importantly, if you’re forced to use cash, make sure you keep the bill.
With digital forms of payment, you can easily prove and look up transactions that have happened in the past. This is necessary with big expenses like buying a car or repairing a home. With that, since most people don’t have enough cash available to pay for large transactions, it’s inconvenient to find an ATM to withdraw money. Not to mention that some banks will charge a fee for withdrawing money from an ATM.
Finally, many retailers now have affiliate programs with card issuers. Therefore, when paying via card, you will be able to receive more incentives than cash payments, from 0% installments to discounts, additional gifts, bonus points, refunds … However, Make sure you use your credit card responsibly. This is paying off your debt on time and avoiding impulsive purchases if you can’t pay off your balance at the end of the month.
Fear of losing money
If you are worried about the possibility of money being stolen or robbed, it’s best not to carry it. When traveling in an unsafe place or walking alone late at night, you probably don’t want to be in trouble with a lot of cash.
“If someone steals your debit card, you just need to notify the financial institution that issued the card and are not responsible for any fraudulent spending,” McBride said. However, cash does not require a PIN to use, so it is easier to spend when stolen.
Although debit cards are safer than cash, they are not completely fraudulent. Probability is low when you immediately notify the bank if there is strange activity on your account. In addition, waiting to be reimbursed for any fraudulent spending can take a long time.
Credit cards are usually a one-way payment method compared to debit cards. If someone steals your credit card, what to do is call the bank and explain that the card has been stolen.