Why Charge When You Can Use Cash?

February 25th, 2009

One of the worst habits frequent credit card users find themselves in is swiping that plastic even when cash seems like a better option.  While it does make sense for some folks, this is like inviting trouble unto themselves for most others.

When Cards Make Sense

Using credit cards for everyday purchases makes sense when you’re abroad or are traveling.  Carrying cash around is never safe so a card really makes things a lot better.  Same for large purchases – why carry two thousand dollars in your wallet when you can just pay with a credit card and pay the bill direct from your bank account?

If you’re strapped for cash between paychecks and need to buy necessities, credit cards also make sense. You can provide for your basic needs, without having to resort to a quick cash loan or anything similar.

When It Doesn’t

Using credit cards for unnecessary expenses – like bar tabs and expensive dinners out – is when people start getting into trouble.  Those are luxuries you can do without and are better engaged in with cash you have to spare.  If you don’t, it should be best to learn to live within your means.

Others use the card for everything in order to earn rewards.  While that makes perfect sense – the more you use it, the more points you accumulate – only those who have proven themselves responsible payers should really take up the activity.

If you’re in the habit of paying off only your monthly minimums and keeping a large balance hanging, using credit cards non-stop in the hopes of earning points is the easiest way to get yourself in debt trouble.  Learn to figure out your capabilities and perform your spending accordingly – you don’t need the extra headache of credit card debt burdening you, believe me.

noel Posted in Credit Card Guides

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