In years past, it wasn’t uncommon for someone to pay for groceries or gas with cash. These days, almost everything is paid for with a debit or credit card. While a debit and credit card serve two completely different functions, they may foster dangerous spending habits that could be rectified by using cash instead.
Here are 4 benefits of using cash.
You Have An Emotional Connection To Cash
One of the best reasons to use paper money instead of a plastic card is because you have to physically part with it when buying something. When you have to reach into your wallet and hand it to a cashier, you are much more cognizant of how much you are actually spending.
The transaction becomes more than just a number on a balance statement at the end of the month. Therefore, you may be less willing to spend more than you absolutely have to when at the store or at a garage sale.
Cash Doesn’t Come With Interest Rates
When you make a purchase with a credit card, you could be subject to interest if the balance isn’t paid off by the end of the month. If you use a debit card to pay for a transaction, you could be subject to insufficient funds fees if you overdraw your balance. Even if you have overdraft protection, you could still be charged a fee for each day your checking account is overdrawn.
Your Cash Can’t Be Compromised
No one is going to be able to link a cash payment to your financial institution or to anything else that identifies you. Even if someone finds money that you dropped on the street, it can’t be used to steal your identity or make purchases in your name. While it may be impossible to get cash back if you lose it, at least you are only on the hook for whatever you lost and nothing more.
You Won’t Be Compelled To Spend Too Much Online
If you only use cash to pay for items, you won’t be doing a lot of shopping online where many purchases are simply impulse buys or items that you don’t genuinely need. By sticking to cash, you only buy the things that you need or at least take the time to compare prices before you decide to make a purchase.
While it may not be the hip or trendy thing to do anymore, it may be in your best interest to carry cash in your wallet. It comes without interest or fees attached to it, can’t lead to your identity being stolen nor can it be used to engage in online retail therapy.
All of these attributes help you to control your spending and keep your debt to a manageable level.