Gone are the days when Americans were solely favoring cash or checks for most of their bills. Today, people have realized that cash isn’t always the king. In the present finance world, people seek benefits in exchange for bill payments, and cash or checks don’t offer anything as such.
Therefore, people are mainly relying on credit cards as a vital alternative. In 2023, around 41% of all payments in the United States were made using credit cards. With 28% of transactions, a debit card was the second most preferable tool of payment. The report also states that cash payments were accountable for only 12% in 2023.
With this, you are now aware that cash or check payment isn’t the only way to clear most bills. To help you adopt this practice better, we have analyzed various resources to bring you a list of certain bills that you shouldn’t pay with a check or cash.
Utility Bills
Utility bills include cable, electricity, telephone, or internet service charges, and you must pay them monthly.
Paying the utility bills in cash will require you to visit the nearest service provider branch in person. You might have to produce your bills, fill in some details, and stand in a queue to complete your payment. This would take up much of your time from a productive day, and the hassle will be endless. As most of the utility service providers are now accepting online payments, it is better to use credit or debit cards to pay off utility bills from the comfort of your home.
Business Bills
Making cash payments for business purchases or bills will deprive you of paper trails, making it challenging to track your funds. Apart from that, storing cash safely at business premises for clearing hefty bills is a hassle. Using credit cards for your business payments is the best solution.
Car Purchase
Buying a car in cash isn’t going to reap any benefits. If you still consider doing it, you will pass on the chance to build a good credit history for your financial profile. The car’s value will degrade over time as you drive it for years. So, instead of putting that much amount of cash into a depreciating asset, it’s better to invest and see that money grow.
On the other hand, you can consider financing the car purchase at low interest rates. This way, you will just have to pay a reasonable downpayment.
Appliance Purchases
Just like cars, electronic appliances are also referred to as depreciating assets, as their value degrades upon use. Therefore, using credit cards to convert the cost of appliances into flexible installments is an ideal way to save your liquid funds.
Furthermore, having credit card installment flexibility will make expensive appliances more affordable and accessible. Some of the brands selling high-ticket appliances, such as air conditioners, televisions, or refrigerators, often recommend extended warranties as well. These warranties are efficient add-ons, but you should try to avoid paying for them using cash. Instead, check if your credit card has an exclusive offer to extend the warranty on any specific appliance purchase.
Travel Expenses
When traveling, carrying all your vacation funds in cash is a risky move. You never know what can happen in an unknown country or city. Therefore, you should make most purchases using credit cards. Your hotel, food, inter-city commute, and other expenses can be covered using credit cards. You will not just be availing discount offers, but will also be having a paper trail on your expenses and get credit points to avail later.
Event or Concert Ticket Expenses
Sometimes tickets to your favorite concert or event might sell out before you access the portal. Think twice before deciding to buy it in case of a stranger or random website. There are more than 16,000 event/concert ticket scam complaints registered with BBB (Better Business Bureau) from January 2022 to February 2023.
It is always better to use credit cards to pay when buying such items from any website, as they cover fraud.
Home Purchase
Not every American will have enough money to buy a house in total cash. Even if you are among the few fortunate families to do so, it isn’t the right idea. You will tie up a large chunk of the liquid funds in the house.
Later, if you encounter a situation where you need money, you might have no funds left or may have to consider it. Buying a home in cash will also prevent you from availing yourself of the potential tax break. Thus, it’s better to apply for a home loan for your real estate purchase.
Rent Payments
If you live anywhere in the US as a tenant, paying rent in cash leaves you with no paper proof. Even if the landlords give you a receipt, you must prepare a file of that paper evidence in order to keep a tab on your finances, which is a hassle. To avoid it, you often let go of receipts, considering good faith in landlords. However, if the tables turn and the landlord decides to evict you from the house on the grounds of non-payment of rent, you will be left with no proof to counter that claim. Therefore, using credit cards or digital payment modes for rent payments is a risk-free approach.
Online Purchases
As the eCommerce industry continues to grow, many unfamiliar websites are also marketing their products. Using your cash or debit card to make online purchases from such sites might be risky.
On the other hand, using a credit card gives you protection. While debit cards offer this facility, the money will already be gone to the fraudster’s account by the time the issue is resolved. So, to avoid such stressful situations, it is better to use credit cards for the protection they provide.
Grocery Bills
Buying groceries monthly using cash will not reap cashback, discounts, or offers. You are just paying the asked amount and going home with a bag full of essentials. Using credit cards instead will help you benefit from certain cashback or discounts that the respective companies promote to attain customer satisfaction. Even if it is a small discount, a long-run calculation will make it a good save.
Insurance Premiums:
Cash or check payments for insurance premiums can be problematic, as they may not be traceable or offer proof of payment. Online payments or electronic transfers provide a secure and convenient way to pay your insurance premiums while ensuring that you have a record of each transaction for your records and potential claims.
Tuition Fees:
Paying tuition fees with cash or checks can pose security risks and may not provide a clear record of payment. Many educational institutions offer online payment portals or accept electronic transfers, which offer greater convenience and security. These methods also make it easier to track payments and access payment receipts for tax or financial planning purposes.
Medical Bills
Paying medical bills in cash can be troublesome and might not offer a dependable payment trail. Numerous healthcare facilities provide alternatives like online payments or accepting electronic transfers, which present improved convenience and security. These electronic payment avenues also simplify the billing procedure, guaranteeing accurate recording and allocation of payments.
Taxes:
Paying taxes with cash or checks can be risky and may result in processing delays or errors. Utilizing electronic payment options, such as direct debit or online payments through the IRS website, ensures that your tax payments are processed securely and efficiently. Electronic payments also provide a clear record of payment for your tax records and can help you avoid penalties for late or missed payments.