This is a guest post.
For many consumers, paying with cash is becoming more difficult as merchants begin to make it easier than ever before to pay with credit or debit cards. In fact, online shopping has even made it impossible to buy items with cash without first loading an account or using a debit card.
However, by paying with plastic, consumers miss out on some powerful ways to save money. For anyone who is interested in saving money on both large purchases and everyday transactions, the following five reasons will show why paying with cash is often the best financial decision one can make when shopping.
Eliminates Impulse Buys
When using a credit card, it is very easy to make a purchase without thinking about how much money is being spent. This leads to many people making impulse buys that can contribute to a higher load of debt. However, using cash makes people actually think about the money that they are spending. This can help to stop a person from making a purchase that is not truly necessary.
Saves on Interest
Credit cards are notorious for their interest rates. Many cards offer a low or zero percent interest rate when people first apply. Then, they increase the interest rate once people have begun to rely on the card. Additionally, interest rates on houses and cars can significantly raise the total amount that a person spends on a major purchase. By paying cash, consumers can avoid paying interest at all which will lead to serious savings.
Many merchants offer discounts for gaining the advantage of immediate access to cash. Additionally, cash paying customers allow merchants to avoid paying transaction fees. They will usually pass these savings on to their customers through discounted prices.
Also, when buying used merchandise such as cars from either an individual owner or through a service, consumers are in a better position to negotiate prices. This can allow them to reduce the overall price of a major purchase by hundreds and even thousands of dollars.
One of the major hazards of using a credit card is the shock that comes with seeing the bill. Because consumers tend to avoid thinking about their purchases when paying with credit cards, they can be surprised when they view their statement at the end of the month.
Paying with cash makes it easy to keep up with every transaction. Therefore, people who use cash are never shocked by an oversized bill.
Credit card purchases are often recorded in databases that can be tracked to gain information about a person’s purchases. Additionally, credit card information can be stolen and used by thieves to gain access to a person’s financial accounts.
Paying with cash is a safer option as no records are kept on cash transactions nor can a thief use a person’s cash to make unauthorized online transactions.
Paying with cash for both major and small purchases has many advantages over paying with a credit card. By paying with cash, consumers are better able to keep track of their spending, negotiate with merchants and safeguard their personal finances.