4 Reasons Why Credit Cards Are Better Than Cash

4 Reasons Why Credit Cards Are Better Than Cash

With the average household debt on the rise, many people are looking at ways to improve their financial situation. Some people are turning to budgeting tools like RentPlus Money. Others are working on furthering their education to give them higher paying jobs. And many people are turning to the cash-only payment method.

Their thinking is that if they only use cash to make payments, they won’t spend more than they make each month. Once they’re out of money that they budgeted for the month, that’s it. No more buying stuff for the rest of the month.

In theory, this is a wonderful plan. You shouldn’t spend more than you make each month. You should budget your expenses and try to stay within the limits you set for yourself. However, you can do all of this and more with a credit card if you are financially responsible.

If you’re using a credit card correctly, you can build your credit score, keep your money safe, earn extra through reward programs and enjoy the convenience of quick and easy payments. How can you do all of this and maintain the financial responsibility promised by a cash-only payment?

Here are four reasons why credit cards are better than the cash-only method:

1. Convenience. A credit card offers the convenience of a less-bulky wallet and the ability to simply swipe your card instead of running to the ATM for cash. Also, many airlines, hotels, and car rentals won’t accept anything except credit cards anymore.

The best convenience that a credit card offers, however, is a detailed list of your expenses. You don’t need to save receipts or write down your expenses to keep track of your budget. You can even link your credit card to your preferred budgeting tool, like RentPlus Money, to make budgeting even easier.

2. Liability. If you carry a lot of cash around to pay for your expenses and you get robbed, that’s it. You’ve lost the money and there’s no way to get it back. However, if someone hacks into your credit card account and starts using your credit card, you can simply call your credit card company to report a fraud. The credit card company will then cancel your credit card number, refund your stolen money, and provide you a new credit card number.

If money gets stolen from your credit card, the credit card company will help you get that money back. If money gets stolen from your cash stash, it’s likely gone forever. Which option would you prefer?

3. Credit Score. Using a credit card is one of the fastest and easiest ways to build your credit score. Not owning a credit card or refraining from ever using it, can really hurt your credit score. Your credit score is determined by your credit history and how you utilize your credit. If you don’t have a credit history or don’t use your credit card on a regular basis, there’s not enough information to decide if you’d be a reliable borrower. Therefore, your credit score would be low.

While building your credit score may not seem important at this time in your life, if you ever want to take out a loan for a car, rent an apartment, get a mortgage, or use any type of credit, you’ll need a decent credit score. Don’t ruin your chances for the future by not preparing today.

4. Rewards. Credit cards are a dime a dozen. It may seem like every store and every letter in the mail is offering you some sort of credit card deal, because they are. With credit cards so prevalent in this country, most credit card companies have created reward programs to entice consumers to use their credit card. Some credit cards offer cash back, while others offer points. Choose which credit card is best for you depending on the rewards program and the interest rate.

If you use your credit card wisely and pay it off each month, you’d be in a better financial situation than if you used the cash-only method. The benefits of using a credit card wisely far outweigh the benefits of using the cash-only method. However, the key is to budget and not spend more than you make each month. If you can do that, you’ll be able to enjoy the financial freedom you deserve!


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