Compare And Contrast Cash And Credit Cards (Essay Example)
Have you ever wondered if using cash is better than using a credit card? A vital factor if you decide to use cash or a card is the purpose of this essay for everyone to look at those similarities and the differences on whether to decide to choose as your form of payment on your next purchase.
There are numerous differences between credit and cash, but there are also similarities whether you prefer to use cash or credit they are both a global form of payment when you make any purchase. Also, neither cash nor credit is the value in and of itself, but the value that is assigned to a piece of paper or a piece of plastic to show the fruits of your hard work. Therefore, you can purchase your daily needs with either cash or credit not because they have any real value, but because society has assigned them a value.
When we think about cash, everyone is first. Today, currently the world cannot survive without cash. We cannot survive without money/cash, but there are many ways in which we can use money. The advantage of using cash is that you are limited to how much you spend, for example, if you don’t have enough cash in your wallet, you cannot buy the product if there is not enough cash. Whereas if you have a credit card you are more likely to spend more because you can just; insert, tap, or swipe that capital. Another advantage of using cash is you don’t have to pay bills monthly whereas for a credit card you must pay bills monthly and if you forget to pay one of your bills then you would have to pay late fees for that. Another advantage of using cash is that not all companies accept credit cards, some establishments only accept cash or certain credit cards.
Overall cash has many advantages, using cash is easier, you have the money when you need it, and you don’t need to worry about paying bills monthly but as I mentioned before it is up to the person to decide what they choose and how to spend their money.
Like cash, credit cards also have their benefits. As mentioned before credit cards are another way to spend money. If you pay your credit card bill on time this improves your credit scores. Having a good credit score has a lot of benefits. You can save on car insurance, looks good on job applications, you can lease housing effectively, and have access to cheaper utility service. However, with the cash, you cannot reap some of these benefits. When you use rewards credit cards, you can earn cashback or other incentives whereas using cash you cannot have these benefits. And finally, the biggest advantage of having a credit card is that if you lose your credit card or if it is stolen you can easily track it or freeze the credit card so that the person who has the card cannot withdraw or spend the money, but with the cash, you cannot do that, once the cash is stolen then it is gone, and you may not be able to get it back. Credit cards also have advantages like cash has its advantages. They are easy to carry around, you can spend how much money you want, you don’t have to limit your spending. You can get a lot of benefits from having a good credit score and so many more advantages
Since the start of the 21st century and as of today, identity theft is one of the highest crimes committed within the world and the United States. As the future of technology advances the more relaxed, we get with securing our identities and ourselves from hackers. Hackers can now infiltrate banking programs, social media platforms, and credit card platforms. Not only to get our money but to get personal information, and even sometimes your Social Security Number, and of course your place of residence. It should be everyone's intention to raise public awareness regarding identity theft. Unlike facial recognition and fingerprints which are unique to individuals, they cannot transfer to another for their use to get personal data Social Security numbers, bank account information, credit card information, telephone numbers, and any other valuable identifying data that can be used to profit from at the victim's expense.
If you ask several random individuals if they would prefer cash or using credit you will receive many answers some may go for the latter. The stance on using cash over credit cards varies in the aspect of the user, even though cash and credit cards have the same meaning, there are many differences and similarities between them. The debate between which is better to use on a day-to-day basis is ongoing. However, they both have valid arguments depending on the type of person you ask. With the rise of being able to utilize credit a lot easier, millennials and Generation Z are more likely to say credit, and boomers and Gen X are more likely to go with cash.
As a victim of identity theft, I know the feeling of losing valuable information for the gain of other individuals, I never once have been a victim of losing my identity through cash or leaving something behind somewhere. There have been many times throughout my life where I have assisted other individuals and found information on how to report and how to identify fraud or financial transactions that may be fraud when they lose or leave behind a credit card or their information is stolen as well. This leads me to believe that it's safer to carry cash over credit when it comes to protecting your identity; some people will carry up to four or five different credit cards at one point instead of carrying cash. If you lose cash, it's simply gone but if you lose or misplace your credit cards, you are putting your identity at risk. Now, when you have a credit card, you have the convenience of calling the bank, having them freeze your account, or disabling your card which stops whoever has your card from making a purchase. Often the bank will reimburse you when you if you have fraud protection.
Carrying cash over a credit card can also cut down your spending habits if you stick to a budget, then that budget in cash will be all you have. One of the biggest factors with carrying a credit card or depending on how many credit cards you carry is the utilization. In an article by bankrate.com, they stated that “Most credit experts advise keeping your credit utilization below 30 percent, especially if you want to maintain a good credit score. This means if you have $10,000 in available credit, your outstanding balances should never exceed $3,000.” Now there have been many reports of fraud transactions simply because individuals do not recognize something on their bill.
When you carry cash, you are less likely to spend as much money on things because you watch the money disappear with every purchase you make. When utilizing a credit card; you tend to spend more money because you don't see the money leaving your account. I have asked many of my coworkers and family members which method they prefer, and many did state that they prefer carrying cash just because it allows them to keep up with how quickly they spend their money. Another way in which the two are different is whether you pay an interest rate. Some may be high, where you spend way more in paying back that money or they could be less, but you would still have to pay back the money or the minimum at the end of the month. When you purchase with cash; you pay the cost of the item right then and there and nothing more. You do not have to worry about interest payments or monthly payments. Another big significant difference between cash and credit is that with a credit card you can make purchases with money you simply do not have. It is basically, money borrowed.
In conclusion, you can see that there are differences and similarities between credit and cash. The decision to use either or both solely depends on the individual and what they prefer. You are the one who makes the purchase; you have the power to utilize either cash or credit to buy something that depends on your lifestyle and your habits. I use both at times, but it is based on the type of investment I am making in myself, for instance, if I am paying for gas I utilize a credit card because the cost is low, but the risk is high due to the possibility of hackers utilizing scam or card readers off of the gas pump, but when I am eating out I tend to use cash because I like to see the fruits of my labor and when I tip it’s in cash. For a big purchase such as buying a vehicle or utilizing some store credit, I will use the credit card to make monthly payments to avoid having to deal with the big upfront cost or having to deal with going somewhere to make a payment every month. Cash and credit both have a value, and that value is what you decide to do with it and what you decide to spend it on yourself.
