5 Important Reasons Why a Credit Card Is Better Than Cash
Getting a credit card can be a daunting prospect. When that plastic's in your pocket, the possibility of overspending, crippling debt, or some nefarious hacking hangs over your head. It's a lot to worry about, unless you're careful about your spending habits.
For many, a credit card actually helps its owner along the path to financial well-being by teaching them fiscal responsibility. That—and the convenience it brings to their lifestyles—makes it better than cash, in some respects. You know that paying with plastic is for you when these features work to your advantage:
You can plan your spending better.
When you're financially independent, big purchases are unavoidable—whether it's upgrading your phone, replacing your old laptop, or going on a trip overseas. In these cases, the ability to pay in installments with a credit card is a real lifesaver.
You can plan around making that small monthly payment, while still keeping a little extra in your savings account for emergencies. From there, planning comes naturally: As you develop the habit of setting money aside for different things, you learn to control your spending.
You don't have to carry around wads of cash.
Making big purchases with cash is its own set of problems. Imagine buying any of the new flagship phones with cash. Do you really want to be walking around with P80,000 on you? Where do you keep it? In your wallet? Your bag? A paper envelope? The fanny pack that kids these days love to wear? Not likely.
How long is the line at the ATM, and how secure are its surroundings? With a credit card, these are things you simply don't need to think about anymore. All you have to do is swipe and go.
Shopping online is easier (and safer).
In the age of data privacy, using your debit card for an online purchase poses a huge risk because it gives third parties access to your savings. In the case that you run into a fraudster, it'd mean an amount deducted from your account right away. With a credit card, it'd be the bank's money gone, not yours. You need only report it and have the transaction disputed—something you can't do with debit.
If you decide to do away with cards on your online purchases altogether, it can be tedious making sure the seller accepts cash on delivery. If they don't, that means going through the process of heading to a bank, filling up a deposit slip, lining up at the tellers, making the transaction, and then finally sending proof of payment before heading back home. It defeats the entire purpose of shopping online: Convenience.
You can keep track of your expenses.
Your monthly card statement contains an itemized list of every purchase you made with your credit card. The more purchases you make with the card over cash, the easier it is to pick up patterns in your spending habits. How often do you splurge on food? How much did you spend on groceries? Did you actually shell out P5,000 on milk tea last month? Because if you did, my man, then I regret to inform you that you have a milk tea problem, and it's time to cut down and find a support group.
All the information on your card statements gives you a very good picture of how much you ought to spend on the things you actually need, versus how much you ought to cut back. It’s a great tool for figuring out a budget for your expenditures every month.
You get extra perks.
Unlike cash, credit cards often give you additional benefits when you use them regularly. These can come in the form of discounts at restaurants or access to sales. Other cards, however, give you the ability to earn rewards points. The Metrobank Titanium Mastercard is a good example of a credit card that does just that. You already get one reward point for every time you spend P20 anywhere, and double the points when you use your card at a dining establishment, a department store, or for an online store or service.