Credit card or cash? - Mouths of Mums

Over the years, we have moved closer and closer to a cashless society, with credit and debit cards becoming easier to use with facilities such as Visa payWave and MasterCard PayPass.

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But is cashless the way forward?

Below are some pros and cons of both methods:

Cash

Pros

Protected from security breaches – no personal information is made available when paying cash.
Evade overspending – you are limited to how much you can spend. Studies have shown that it is psychologically harder to part with cash than a card.
Avoid extra charges where establishments have a minimum charge to use eftpos.
You are still able to pay in the event of technology problems, when eftpos communications are down.
Handy for split bills in restaurants.

Cons

Unable to utilise the convenience of apps, such as Boomeringo, that automatically track your spending and budgeting.
If your cash is lost or stolen, it’s gone for good.
Limited in making online purchases.
Shopping for big-ticket items, results in carrying around large amounts of cash, which can be a safety issue.
It can be a chore to replenish your cash budget each week.

Cards

Pros

Convenience – it has become so easy to pay by card with Visa payWave and MasterCard PayPass, creating fast and efficient checkouts.
Access to apps that can track spending, such as Boomeringo, to ensure you stay on budget.
You are able to secure services, such as hotel bookings or car rentals that require credit card for security.
Covered for fraudulent use on your card – the bank will usually refund any money lost as long as procedures have been followed.
Having a credit card, and making payments on time, provides you with a positive credit rating.
You can earn rewards with some credit cards.
Access to extended warranties on purchases made on credit cards.

Cons

Some businesses, especially smaller ones, charge a fee of around $2 for eftpos transactions under a certain dollar amount (generally around $10-$15).
Some establishments don’t accept card payments.
Charged many fees, from annual fees, to overdue payment fees, and interest is charged on purchases and cash advances.
Susceptible to fraudulent use. If your card is stolen, there is an inconvenience of having to wait for new cards and refunds to be issued.

Some people prefer the ease of cards, others like to budget with cash. As you can see there are advantages and disadvantages to both methods.

Let us know your experiences, and what works for your budgeting. Share your tips with us and leave a comment below!

Image courtesy of Shutterstock.com

21 Comments

- - Melissa89 said
  - 29 Jul 2016
    12:29 pm
I always use debit

- - mom130219 said
  - 27 Jan 2016
    8:04 pm
We currently have an offset account for our mortgage so using a credit card for our monthly purchases makes more sense for now to get the most out of our savings against our mortgage. We are very careful as we know how easy it can be to overspend, having a strict budget helps.

- - june11 said
  - 14 Jan 2016
    2:29 am
I have a Debit/Mastercard. I have used it as a Mastercard twice and I have had it for about 25 years.
I pay most of my accounts by direct debit. I can only spend funds that are already in my bank account and I have never overdrawn it. I use my card when I do my food shopping and sometimes withdraw cash with the same transaction to pay gap on Dr.’s bills, medication and sundry small purchases. I use a pin code, not a pay wave that anybody can swipe.

- - aprilb1 said
  - 29 Dec 2015
    7:54 pm
I find i’m better with cash but i still like to leave some in my account

- - mom160421 said
  - 29 Dec 2015
    1:03 pm
I find it easier to stick to a budget if I use cash.
- mom94125 replied
  
  06 Jan 2016 , 6:13 pm
  yeah for sure! can’t spend it if you don’t have it! i no debt for your own money
- - rachelvk said
  - 26 Dec 2015
    10:55 am
I put everything on credit card and then pay it off at the end of the month. That way I can rack up as many award points as possible. At the end of the year I then trade in the award points for prepaid gift cards and use them for Christmas purchases. This helps to ease the festive season financial burden.
- mom103920 replied
  
  14 Feb 2016 , 3:19 am
  This is what we do also. Our card has a small limit and paid off every fortnight. The rewards we redeem far outweigh the annual card fee.
- - mom94125 said
  - 19 Dec 2015
    5:06 pm
yeah i remember over a decade ago that everyone was freaking out about a cashless society but it is not a big deal. it is just society moving with the times,

- - mum888 said
  - 18 Dec 2015
    9:39 am
I have a debit card and have a fear of credit cards after seeing my brother go into debt with them . Hub has one for business and emergencies , but it is still uneasy seeing the bank charge interest that can easily accumulate if not monitored. Good to have both for convenience as long as you maintain control of your finances and not the other way around .

- - Kasey said
  - 14 Dec 2015
    2:28 pm
Credit card can be easy to get carried away with but we mainly use ours for bills, food and the odd treat.

- - mom74640 said
  - 14 Dec 2015
    12:38 pm
Lie gs

- - mom112217 said
  - 14 Dec 2015
    8:19 am
I use cards and cash and it is a matter of not over spending with both and stay with in your budget!

- - mom166873 said
  - 14 Dec 2015
    6:27 am
I would definitely prefer to pay by cash those things have several times what is my credit card I’m not impressed paper cash if you have it we all need to be extremely careful about getting a card details to anyone we don’t know because this could happen to anybody

- - mom74640 said
  - 13 Dec 2015
    5:41 pm
Like oi

- - mom90758 said
  - 13 Dec 2015
    4:05 pm
I don’t have a credit card, but I use a debit card regularly. I find it very convenient. I use cash just for small purchases.

- - mom165081 said
  - 13 Dec 2015
    12:12 pm
Interesting list of pros and cons. Studies have shown people spend more when paying on credit vs cash. We really do have to be careful with our choices.
- mom93821 replied
  
  14 Dec 2015 , 6:47 am
  It really does go back to have a budget and stick to it!
- - mum888 said
  - 13 Dec 2015
    9:13 am
It is handy to have both . For example, if you are an online or ebay shopper, sometimes it is cheaper to buy online and I think paypal is the best and safest transaction for these types of purchases . Cash is good if you have it and can be used for essential purchases such as groceries , and maybe some certain bills. I only use credit card if I have no choice and it is really needed at the time ( eg paying an urgent bill or emergencies etc )

- - mom93821 said
  - 13 Dec 2015
    5:41 am
A combination of both works well as overspending can occur with both! Budget is more important than card or cash!

- - mum4107 said
  - 13 Dec 2015
    5:14 am
I use a combination of cash and cards