Cash Vs. Credit Card: The Pros And Cons

This post may contain affiliate or referral links that help keep this site running. For more information about this, please see our disclosure policy.


There are a lot of people who do their utmost to avoid getting a credit card. Either they or people close to them have been burnt. They’ve seen someone get into debt that they’ve never managed to pay back. And so, they would rather carry around cash.

But there are benefits to using credit cards, and they can actually help you save in the long run. The ideal scenario is that you use your credit card like a charge card. You load money to it and only use that. However, credit cards can be a smart move even if you do incur some debt.

Here are some of the pros and cons of getting a credit card.


Let’s start with the most obvious benefit – the one that banks want you to know about. If you are smart about using your credit card, you can get a lot out of their rewards programs. By finding the best cash back credit card, you can earn money rather than paying interest. If you’re making enough money to keep your credit card paid up every month, then you won’t be paying interest at all, and that cash back will actually mean something.

Make sure you choose the credit card with the rewards that suit you most. Cash back is always the most practical, but if you’re not in need of counting pennies, then travel or other rewards might appeal to you.

Know How Much You Spend… Or Not?

This one relates to human psychology, and so it is not open and shut. Some people find credit cards to be far more useful in budgeting, as they can easily keep track of how much they spend and what they spent it on. When they have cash, however, unless you’re keeping receipts, you are left in the dark later on.

But others claim that if they don’t have the cash in their hands, they can fool themselves into thinking they haven’t spent anything. They never look at bank statements and therefore end up spending more than they would be comfortable with.

I think it’s a matter of how each individual’s brain works. If you more easily see money in a conceptual framework, you’ll have no problem keeping track of credit card spending. But if money means nothing to you if you can’t actually see it, cash might help you save.

A Safety Net

A huge benefit of having a credit card is that in a pinch you can use the credit. Rather than being stuck asking around for loans, you have emergency funds at your fingertips. If you know you can be responsible about all the extra leeway you have, then credit cards lessen your risk, rather than raising it.

Can You Lose It?

One of the biggest advantages credit cards have over cash is that you can’t misplace your money. You don’t have to worry about being mugged and having your cash taken off you. Your money is not just its physical representation.

Even if your credit card gets stolen and used, you can take measures to get your money back. Good luck proving that the cash someone else used was actually yours.

Credit cards just make more sense in a digital world. Money is a concept, after all, and it’s worth is not based on the paper on which it is printed. If you’re scared off by credit cards, cash might suit you better for now, but for most people, credit cards are the logical answer.

Follow Me

Stacy Ott

Stacy Ott is the face and brain behind the frugal living and lifestyle blog Six Dollar Family as well as The Genealogy Queen and a few others.By the age of 30, Stacy had overcome an alcohol addiction, a drug addiction, divorce, survived domestic violence, and had built a life for herself and her daughter after spending 10 months in a homeless shelter. Stacy is passionate about homeless advocacy and addiction education.  Her first book, also called Six Dollar Family is available on Amazon.

I earned over $100,000 blogging last year! Click here to learn how to start a blog and make money blogging!
Follow Me

Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.