Don’t Pay Cash – Just Charge it on a Credit Card Instead!

Charge It!Cash is king, as the saying from the world of finance goes.  Ultimately, if you have it, you’re at an advantage over a situation where you offer up promises to pay.  After all, wouldn’t you rather sell something to someone paying in cash, instead of the next person who tells you they will pay the same price but pay you later?

When it comes to buying, and being on the shopper side of things, there are many people who prefer to pay in cash.  The notion of using a credit card to buy things gives some people cold sweats, shivers, and other assorted fun reaction.  To some, credit cards represent a path to potential financial problems.  To the point where it might even seem unusal for a personal finance blog to actually suggest using a credit card!

Personally, I don’t see it that way.  Instead of paying cash, I will just put it on a credit card.  Yep, don’t worry about having the money on you at that exact moment of purchase. Just pull out the card and charge away!  Buy now, pay later.  Isn’t that so much easier?

Here’s the trick though – I will pay off the credit card bill in full, every month!  Without fail.  I think it’s been at least a decade since I carried a credit card balance from one month to the next, and even then it happened because I was on vacation out of the country.  It wasn’t on purpose.

Here’s why I like to charge instead of using cash:

Easier to Track Expenses

Paying cash, one needs to specifically record each transaction manually, if you choose to keep track and categorize expenses.  With a credit card, this can be done automatically.  There are platforms available, as many of us know, to simply automate tracking to some degree.  Not that you’re guaranteed that all expenses would automatically be allocated to the perfect categories right away, but there can be significanly less work for you through automation.

No Need to Carry Change

Want to buy something that costs something other than an even dollar amount? In that case, be ready to carry change around.  Let’s say you buy something that costs $10.63.  You’ll probably hand over a $20 bill, and get back $9 in some combination of bills (either $5 bill and 4 $1 bills, or 9 $1 bills), as well as 37 cents.  That could be in whatever combination is convenient for the merchant.

After multiple transactions, this loose change can add up.  After a while, you’ll want to take all your accumulated loose coins, and cash it in for – well, cash itself, as in bills.  Or maybe a store credit, depending where you redeem.  Perhaps it will go to the bank.  Either way, you might pay a fee, in addition to dealing with the minor inconvenience of dealing with all those coins.

By charging, you don’t have to deal with any of this.

Rewards Points

Credit cards can have different rewards points systems.  For me, it’s airline points.  With no annual fee, I’m simply accumulating points with purchases!  Of course, we should NOT be tempted to buy things for the side benefit of the points.  Getting them shouldn’t have any role in influencing what we buy, but they’re a nice side benefit if treated as simply a small bonus.  I’ve bought two round trip tickets this way.

Additional Reasons:  There is also the avoidance of going to ATMs to get cash, some level of theft protection, and maybe even purchase protection.

Overall, I have been going with credit cards lately.  My cash purchases have generally been only when credit isn’t an option.  A big key is that having a credit card does not tempt me to buy any more than I would buy with cash.  If that is the kind of discipline a person has, then there can be a lot of advantages to using a credit card instead of cash!

10 thoughts on “Don’t Pay Cash – Just Charge it on a Credit Card Instead!

  1. The First Million is the Hardest

    I do absolutley all of my spending on a credit card (which is paid off in full each month of course). It really doesn’t take long for the rewards to add up. My g/f and I are paying for almost all of our vacation this summer with credit card rewards.

    Reply
  2. John@MoneyPrinciple

    Completely agree. Use a credit card as a charge card is a no-brainer IMHO. In the UK, for amounts between £100 and £30k, the bank shares the risk so if you buy something that goes wrong and the supplier has gone bust, you can get your money back from the bank. I don’t think this is normal elsewhere. Apart of course from credit cards being useful just for cashflow management.

    Reply
  3. Jenny

    You’ve got to be an idiot to charge everything on a credit card now. Is this a financial blog or a dumb consumer building blog? You’re an idiot! Pay cash for everything! Then you will FEEL the emotional loosing of your money and realise that it doesn’t just go on trees. I’d suggest studying with Dave Ramsey instead of this idiot!

    Reply
    1. Post author

      Ha! First of all, what is “loosing”? Second, there are definite merits to charging instead of paying cash. If you have discipline, there shouldn’t be any problems. Charge away, and pay your bill in full!

      Reply
  4. Pingback: Two Very Different Reasons People Use Credit Cards: Which Applies to You? | Digital Personal Finance

  5. Anonymous

    I’ve just started this new rule where I ONLY use me Discover credit card when I need something…like Gas, AND I get 5% cash back on it! Every week, I take out a certain amount of money from my bank account(say like, $50 or whatever you prefer) and I use it on things I want, like jewlrey or going out to eat. Once my money runs out, guess what? It’s gone! And I just wait utill the next week and take out what I need and keep myself on a budget! When you use cash, you actually SEE where your money is going instead of mindlessly swiping a credit card and you realize that money doesn’t grow on trees. Sure, there’s going to be things you NEED (like gas, groceries, bills, ect…) but always, always, ALWAYS keep yourself on a budget.

    Reply

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