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Why do I pay with a credit card instead of cash?


There are many real life stories how people get into huge debts by unwise using credit cards. But most of individuals, who simply unable to manage money, refuse to look deeper into the problem and analyze what really happened, simply blaming financial institutions for multiple charges and fees every month. Nowadays nearly all credit cards do not have annual membership fees and if you pay off the balance every month there are no interest charges will be applied.

I’m not intending to go over terms and conditions of thousands credit cards neither trying to persuade everyone to go in the bank or apply online for a new card. The purpose of my writing is to put together five main reasons why I use credit card instead of making purchases and payments with cash.

Do not like to put pile of banknotes into my wallet

Cash is always good, but I would rather keep a single plastic card with $10,000 credit limit than trying to find a space for hundred $100 bills. It doesn’t mean I carry or have a need to put such amount into my pocket, but even if it is a few hundred dollars I still choose a credit card.

Earning cash back

Receiving rewards is one of the main advantages I prefer to buy products and pay for services with credit card. Simply buying groceries, gas as well as making bigger purchases and paying bills I’m getting over $400 a year just by using a credit card, not writing checks or dealing with cash.

Convenience and saving time

Using a debit card linked directly to checking account is not the same as paying with bank’s money available on the credit card. When I rent a car and use a debit card a few hundred dollars will be put on hold and will be released in couple weeks after vehicle is returned. It might be minor and not even a question for those who do not use services of car rental companies at all, but for me it is not a convenient method of payment. In addition, I prefer not to show my personal accounts information to anyone even the most trustful merchants or service providers.

Easier to manage expenses

Many believe it is easier to manage cash because if you do not have enough you do not spend more. I say looking on a credit card statement and analyzing what purchases were necessary and what was a waste is much simpler than trying to memorize what all the cash was spent for.

Extra money if you need it

Credit limit on a card is additional money you can always count on. It is never wise to withdraw cash from a credit card because fees for such transactions usually extremely high, but there is other way to get actual dollar bills. Nearly every month I receive 0% APR convenience checks which can be deposited on my own checking account. From the beginning I was thinking there are must be some catch in such offer, but I was only partially right. In my case, bank charge 3% fee from the amount written on a check, but it is still better deal than most of personal loans offers.