Here’s Every Pro And Con To Paying With Cash vs. Credit


When it comes to spending money, you probably consider how much you’re spending and what you’re purchasing, but do you think about how you’re spending? You’ve likely used cash and cards many times in your adult life, and both have their purpose. Here are the pros and cons to spending your money in cash versus credit, and why there’s value in both.


Flickr / 401(K) 2013

Pro: You have more control over your spending.

If you only have $100 in cash for the week, you’re physically limited to that amount. After a few weeks of limiting yourself this way, you’ll also train yourself to budget more carefully.

Con: You’ll probably be hit with ATM withdrawal fees.

Unless you have your personal bank that doesn’t charge you ATM fees nearby, you’ll likely be charged each time you take out cash.

Pro: You’re less at risk of digital fraud.

It’s no surprise that using cash will allow you to bypass the risk card users have regarding digital fraud. There’s less of a chance that someone could steal your personal information from a few bills since, well, you’re not putting your info online.

Con: You’re more at risk for in-person fraud.

If someone steals your wallet, you’re done. There’s nothing fun in that, especially because you need your I.D., and typically your card, to take more cash out.

Credit Card

Flickr / HloomHloom

Pro: You can build your credit.

Credit is important, and you need to have it to get important stuff like apartments and loans. If you insist on living in the early 20th century and carry around wads of cash instead of plastic, you won’t have the ability to build up your credit, which will hurt you financially.

Con: You’re vulnerable to digital fraud.

If you’re like most functioning adults, you probably pay your bills online, order products online and even use money-transferring apps like Venmo. Maybe you even attach your account to service apps like Uber. All of these activities put you at risk for digital fraud, unfortunately, and 46 percent of Americans have experienced fraud in the last five years. Yikes.

Pro: You can recover lost or stolen funds.

If you are in the unfortunate position of having your account hacked or your card stolen, you can recover your funds by filing a claim with your bank, which you can’t do with lost cash. At least there’s that, right?

Con: You might spend more.

It’s a lot easier to forget how much you spent in a day if you don’t have the funds right in front of you the way you would cash. Using a card means you have to keep a more critical eye on your account.