Once and for all: Should you use credit or cash?

Every payment method has its advantages and disadvantages, and the choice between them depends on lifestyle, spending habits, and financial goals.

At the same time, it’s important to remember that credit cards often offer benefits like cashback, which can make them particularly attractive for careful consumers.

Advantages of Using Credit

Convenience and Flexibility

Paying with a credit card allows purchases even when you don’t carry cash. Whether it’s for booking tickets online, paying at businesses, or using it abroad, a credit card is the most convenient solution.

Tracking Expenses

One of the key advantages of credit cards is the ability to receive detailed expense reports. This allows you to monitor your budget accurately and identify spending patterns that may need improvement.

Rewards and Incentives

Credit cards offer a variety of benefits, such as cashback (money returned for purchases), redeemable points, discounts at businesses, or travel insurance. Proper use of a credit card can reimburse some of your expenses and make payments more efficient.

Installment Options

With a credit card, you can divide large purchases into installments, making it easier to plan your monthly budget and handle unexpected expenses.

Advantages of Using Cash

Full Control Over Spending

When using cash, there is a physical sense of spending that limits us and helps avoid unplanned purchases. Additionally, when the cash runs out, there’s no way to exceed the budget—an important advantage for those who struggle to stick to financial boundaries.

No Fees or Interest

Cash is a payment method that involves no hidden fees or interest, so there are no surprises at the end of the month.

Ideal for Small Transactions

Especially for small daily expenses like grocery shopping or a drink at a café, cash saves the time of charging a credit card and prevents the accumulation of small expenses that can affect your credit limit.

When to Choose Credit?

Using credit is suitable when flexibility in payments or online purchases is required. It’s also ideal for those who can track their expenses and pay off their monthly bill in full to avoid interest. If your card offers benefits like cashback, taking advantage of these can lead to significant savings over time.

When to Choose Cash?

Cash is better when you want to control your spending and avoid impulsive purchases. It’s also suitable for those who prefer not to deal with fees and interest or for places where cash payments are more easily accepted.

Conclusion

The choice between credit and cash depends on your needs and financial management style. If you control your expenses and are aware of the benefits that credit cards offer, they can be the ideal tool for you. On the other hand, if it’s important for you to stick to a set budget and avoid unplanned expenses, cash is the simpler and safer choice.

The best approach is to combine the two—use credit wisely and cash for small, monitored expenses.