Member-only story
Credit, Debit, or Cash? Choose Your Fighter
You’re in line at the supermarket, after the final beep of the scanner, the cashier looks to you and asks, “cash or card?”
If you’re like most Americans, this question gives you three choices, use cash, use a debit card, or use a credit card. But with so many options and so many different purchasing scenarios, it can be hard to know when you’re supposed to use credit over debit, or when to strictly use cash.
Let’s do a quick overview of the optimal way to use your different payment options.
- Cash is King
It’s good to always keep some amount of cash on hand in case of an emergency because every business takes cash. The amount you keep on hand depends on what you consider an emergency, but most recommendations range between $50-$200.
On top of being useful in a pinch, cash has a psychological benefit. It is much easier to spend money when all that entails is swiping a card, but you might think differently about that same purchase when you pull out a stack of bills. This means that using cash can actually save money simply by making you less likely to spend (though this is not a certainty, spenders are going to spend).
Cash is also great to use at small businesses. Using a credit card requires processing which comes out of the business owner’s…