Card vs Cash Payment; Which is Better and Why?


Did you know that a 2018 study by TSYS indicated that 80% of consumers like to use cards for purchase instead of cash? Why do people prefer card payment over cash? We will be discussing 7 advantages of using cards over cash to pay your bills.


More Convenient

We'll start with one of the more trivial advantages of using cards. Such as, you won't have to carry around a large sum of hard cash. That's a lot of responsibility! With cards, you are responsible for only one or two items (depending on how many you own); plus, it fits effortlessly in your wallet or purse.



Gaining Rewards

A desirable incentive to keep using debit/credit cards is the points you earn when you purchase using the cards. These points can then be redeemed at stores that have partnerships with the bank you are affiliated with. Use them for your next travel for airline miles or hotel stay, or just get the cashback offer and spend it on whatever you like. While you can still get coupons when you purchase by cash, you can only redeem it at that specific store. This is done to increase your loyalty towards that particular merchant. But with cards, you are free to purchase a service or item from wherever you please.



Protection Against Fraud and Other Issues

Credit card companies have policies that protect your money and limit your liability if faced with fraud. It is much hard to track stolen cash; imagine all your hard work going down the drain! However, cardholders have the advantage of contacting their respective providers and issuing a complaint that will then allow them to take necessary actions. The earlier you complain, the less damage you endure. Moreover, if you order something online and it doesn't arrive as promised, your card issuer will help you deal with it. However, if you pay by cash, you will have to resolve the problem yourself with the vendor. While debit cards also offer protection, it is not as robust as that of credit cards.



Spending Power

This one only extends to credit card users. With cash (and debit card), you can only spend the amount that you own. Conversely, when you possess a credit card, you don't have a daily spending limit, and you can purchase items and pay for them in the future. This gives you the time to acquire the necessary funds. However, it should be used wisely. If you are unable to settle the amount in full by the end of the cycle, it will add to your interest rate. This can cause overspending and debt if you're not responsible.



Building a respectable Credit Score

This, again, only covers the credit card users. This is one of the MOST IMPORTANT things you can achieve in the financial aspect of your life. Credit scores are essentially scores that you get when you pay your bills on time. It is the main thing that a money lender will look at if you approach them for loans. The better you handle your credit card payments and debts, the higher is your credit score. The higher the score, the better your chance. Cash and debit cards do not add on to your score since it's your own money, and it does not show your capability to handle loaned money.



Online Purchases

This might not come as a surprise. It is much easier to pay by card when making online purchases, especially international ones. Even buying airline tickets, booking hotels, renting cars, etc. while travelling requires card payment since they need your credit information for security reasons. If you only live by cash, it will make the transactions extremely difficult, as you will have to go through various procedures to make the purchase. As discussed above, credit cards provide more security in case anything goes wrong.



Covid-19 Precautions

Paying by cash means exchanging money from one person to another. This could also increase the chance of transferring pathogens like the coronavirus. You don't know the source of the cash being handed to you; where it's been, what it's seen. Whereas you are always aware of your credit/debit card's whereabouts, and it's much easier to clean them.


To conclude

Using cards for purchasing goods and services have clear advantages over using cash. However, this doesn't mean that you completely disregard its usage since there are situations cash would be useful too. While credit cards offer better security, add to your credit score and allow extra purchases, you can always run into the risk of overspending. If you are someone who cannot easily control their purchase behaviours, debit cards would be a good option. The study by TSYS (mentioned in the introduction) also indicated that 54% of the consumers opted to purchase by debit cards. It provides a happy medium between cash and credit cards. However, nothing beats a credit card in terms of paying for travelling costs.


Marhabha is an online shopping store located in the UAE. Our main aim is to provide the customers with accessibility to authentic imported brands that are not readily available in the UAE. Additionally, we also produce products consisting predominantly of high-quality leather goods, sourced from India, under the brand name of Uxurious. Although we have the option of cash on delivery in the UAE, we provide a 25% discount when you purchase by card. We also offer free shipping across the UAE without any limit on the minimum amount spent. Visit our website to check out the products we offer.


Information Sources:

https://www.fool.com/the-ascent/credit-cards/articles/cash-vs-credit-card-which-is-the-better-way-to-pay/

https://www.thebalance.com/is-a-credit-card-better-than-cash-960221

https://www.creditcards.com/credit-card-news/debit-vs-credit-vs-cash/

https://www.businessinsider.com/personal-finance/using-cash-vs-a-credit-card

https://www.self.inc/blog/credit-versus-debit-cards-for-online-shopping

https://www.investopedia.com/articles/personal-finance/092214/credit-card-or-cash.asp

https://fortunly.com/statistics/cash-versus-credit-card-spending-statistics/#gref

https://www.moneyunder30.com/cash-vs-credit-vs-debit-which-should-you-use

https://www.fundera.com/resources/cash-vs-credit-card-spending-statistics

https://spendmenot.com/blog/cash-vs-credit-card-spending-statistics/

https://cashessentials.org/app/uploads/2018/07/2018-world-cash-report.pdf

https://www.creditcards.com/credit-card-news/payment-method-statistics-1276/


Picture Sources: All Stock pictures were taken from Google Images.


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