Cash might seem like a convenient way to make purchases, but it’s not always the smartest financial choice. From unexpected perks to added protection, using credit cards, digital wallets, and contactless payments can often be a better bet. Read on to know which 12 things you should never buy with cold, hard cash.
Utility Bills
Simplify your life and boost your savings by ditching cash for utility payments. Autopay with a credit card ensures timely payments, preventing late fees and service interruptions. Many cards offer cash back or rewards, turning ordinary bills into potential earnings. Remember to regularly review your statements for any irregularities while enjoying the convenience of automated payments.
Risky Transactions
Paying with cash can be a financial gamble when purchasing products or services that involve significant transactions or potential risks. Credit cards offer essential consumer protections in case of undelivered goods, damaged items, or unfulfilled services. Whether it’s a big-ticket purchase like furniture or a service-based transaction like moving, using a credit card provides a safety net if things go wrong, allowing you to dispute charges and recover your funds.
Digital services
Digital downloads and purchases are safer with a credit card. Unlike cash or debit cards, credit cards offer protection if something goes wrong. Whether it’s an undelivered e-book, a faulty game download, or a missing ringtone, your credit card can be a lifeline, helping you dispute charges and recover your money.
Home Rent
Never pay your rent in cash. While it might seem the quickest option, paying rent with cash leaves you vulnerable. Without a paper trail, proving you paid your rent can be a nightmare if disputes arise. Opt for checks, online payments, or digital transfer methods instead to protect yourself and maintain a clear financial record. Given that a staggering 22.4 million U.S. households now allocate over 30% of their income to rent, with 12.1 million spending more than half, having a clear record of rent payments is crucial for financial stability.
Home Repairs And Renovations
Home repairs and renovations are better off charged to a credit card. Not only does this provide a paper trail for potential tax deductions, but it also offers consumer protections. If the contractor’s work doesn’t meet expectations, you can dispute the charges and recoup your losses.
Vehicle Purchase
Buying a car with cash might seem like a smart move, but it’s often not the best financial decision. Dealers are more likely to negotiate better deals when customers finance, and you can earn higher returns by investing your cash elsewhere. Consider financing your car and using the cash as a down payment on a rental property for long-term financial benefits.
Car Rental
Most rental car agencies prefer credit cards and for good reason. Using a credit card can often unlock extra perks like complimentary insurance coverage for theft or damage, potentially saving you hundreds or even thousands of dollars in case of an accident. Credit cards offer better fraud protection and dispute resolution than debit cards. So, next time you plan a road trip, remember that a credit card can be your best companion for a worry-free journey.
Car Repair
It’s wise to pay for vehicle repairs with a credit card. It offers financial protection in case the service work isn’t performed correctly. When you pay with a credit card, you can dispute charges and potentially recover your money if you’re dissatisfied with the repairs.
Event Tickets
With the rise of ticket scams, paying with cash is a risky gamble. Credit cards offer essential fraud protection. If you fall victim to a fake ticket, you can dispute the charge with your payment provider and recover your money. Between January 2022 and February 2023, the Better Business Bureau received 16,884 complaints regarding ticket sales, including concerts and sporting events. So, don’t be a statistic and use a credit card for your next event.
Groceries
Groceries are a common category for earning credit card rewards. On grocery purchases, many cards offer generous cash-back percentages, ranging from 2% to 6%. For example, the American Express Blue Cash Preferred Card provides 6% cash back on up to $6,000 spent at U.S. supermarkets annually. The Citi Custom Cash Card gives you 5% cash back on $500 spent in your top spending category each month, including groceries. This can mean significant savings over time. Plus, using a credit card helps you track your monthly food budget, making it easier to identify spending patterns and areas to cut back.
Travel Related Expenditure
Travel purchases are a prime candidate for credit card use. Not only do travel credit cards offer valuable rewards like points and miles for free trips, but they also provide essential protections. Credit card coverage for trip cancellations, interruptions, and lost luggage can be a lifesaver. Additionally, the convenience of replacing a lost or stolen card compared to the irreversible loss of cash makes credit cards the clear winner for travel expenses.
Business Expenses
Credit cards are essential for business purchases. A digital record is crucial for expense tracking, tax filings, and financial management. Business rewards credit cards offer additional perks like cash back and points, transforming business spending into potential savings. Document Challenges Account for a 21.3 % productivity loss. By using a credit card, businesses can streamline their finances and potentially boost their bottom line.
Dining Out
Many credit cards offer increased rewards for restaurant purchases, turning your favorite meals into points or cash back. Plus, using a credit card provides a detailed record of your dining expenses, making tracking your spending and budget easier.