Paying for purchases with a credit card makes good sense in many cases, especially if you are taking advantage of rewards or cash-back cards. But there are at least five instances when cash is a better option, according to many financial advisors:
- When buying gas – First off, although you may not always realize it, many gas stations offer a discount for paying cash. Second, using cash may reduce the odds of getting scammed, as criminals have been known to install malicious devices in gas station pumps in order to steal your credit card information.
- When buying second-hand – You can save big bucks by buying used merchandise, but whether you are buying through Craigslist, an online vendor, or a local, face-to-face seller, it’s not a good idea to provide a credit card or checking information to a perfect stranger.
- On goods you might return – It’s not unusual to purchase two similar items from a store knowing you will probably return one—or to buy something you are not sure you are likely to keep. In either case, paying in cash will ensure a quicker return of your money, because most stores refund your money in the same form you originally paid with.
- On goods you buy on vacation – Buying travel souvenirs is fun, but setting aside some cash is a good idea. For one thing, credit card providers may charge big fees for transactions made in a foreign country. For another, you will almost always be able to negotiate better prices by paying in cash.
- Everyday small expenses – Paying cash for small daily expenses is a good way to help you stay within budget. Not only will it deter you from making impulse purchases, it can also save you from incurring unwanted overdrafts or credit card fees.
