Should you use a credit card or cash when you are shopping? Which is safer? This post will look at factors you may want to consider in terms of your shopping – in-store and online – and how to balance convenience with safety.
Cash Pros and Cons
Pros
- it’s easier to avoid over-spending since you ‘feel’ the money leaving
- you help businesses avoid credit card fees on your purchases
Cons
- carrying around cash can make you more nervous while shopping
- carrying large amount of cash can make you a target for thieves
- if your cash is stolen, you have almost no chance it will be recovered
Credit Card Pros and Cons
Pros
- credit cards offer fast and convenience while shopping
- you can easily keep track of your spending on your monthly statement
- if your card is stolen, you can cancel it to prevent fraud
- if fraud occurs, you can dispute it with your credit card company
- credit card companies often will spot and stop fraud from occurring
- credit cards may offer purchase protection, extended warranties, travel medical insurance, airline miles, or cash back incentives
Cons
- it’s easy to overspend when you don’t have physical cash in-hand
- interest trates and fees can exacerbate over-spending
- you need to be vigilant that your card is not being double-swiped or copied down
- can open you up to credit card fraud or identity theft, if stolen
Credit card debt is a huge issue in America; though airline miles or cash back incentives may sound appealing, the reality is that most people do not know how to treat a credit card like cash, overspending far beyond their means. If you want to shop responsibly this holiday season, try to shop with cash.
If you want the benefits of a credit card, without some of the risks to your finances, consider a disposable credit card. Just like a gift card, you pre-load the disposable credit card with a specified amount of money.