That money remains one of the most important things in life is an obvious fact. It helps to survive buying things that are needed to meet the basic human needs: food, clothes, etc. Sometimes, people earn a lot of money and need to save them; sometimes, people need to make a purchase but cannot afford it. What is the best way out? The best way out is having a credit card. Credit cards have a lot of advantages over cash and vice versa, but which alternative is better? This essay is about the advantages and disadvantages of cash and credit cards.

Cash or Credit Cards?

Cash and credit cards have lots in common. They are both used to make payments for goods and services. They are money but used in different forms. Cash is limited to the amount of money currently at hand, whereas credit cards offer vast borrowing opportunities.

The main differences between cash and credit card are also related to their advantages and disadvantages. One of the advantages of using cash is that one always knows how much he or she spends. For instance, if a person has $50 in cash, which means that he/she simply cannot spend $51. With a credit card, a person can pay for goods or services and later forget where the money has gone. Credit cards allow spending more money than a person has. Everyone loves “free money”, but each credit must to be paid off. The longer a person waits the bigger the amount of money he/she has to pay to the bank. Therefore, credit cards result in debts, which not everyone can handle (Evans & Schmalensce, 1999).

If a person purchases something and then wants to return it to the store, credit cards will not allow for a full refund. The bank will charge something for its services. However, if something is paid with cash, a full refund is more likely. With credit cards, people do not need to carry a huge amount of cash or use checks. Thus, a credit card reduces the risks of losing money or being robbed. Also, sometimes, a person may not know when exactly he or she will want to make a purchase. As a result, with a credit card, the buyer does not have to run back home or go to the bank to take the needed sum of money to make a purchase.

On the one hand, a credit card can be easily stolen, like cash. However, unlike cash, credit cards are susceptible to Internet frauds. As a result, a person ought to be really careful not to be cheated. If a credit card is stolen, its owner may not understand it at once. Meanwhile, the thieves will have enough time to take all money from the card or personal information about the owner, if they need it. On the other hand, credit card owners have a special type of insurance, so they should not be afraid if their cards are stolen. Some companies offer social reward programs to those, who have credit cards, so a person can get a 1-5% cash return from the money spent on certain product and service categories or pay with a credit card in certain stores (Ausubel, 1991).

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Credit cards allow customers to borrow a certain sum of money to pay for things, but there are limits on the amount of money that can be borrowed. At the end of each month, a customer will have to pay back all or part of the sum that has been borrowed. Today, credit card owners use the Internet more often than ever before. Credit cards enable their owners to make purchases by Internet, when needed. However, here is one problem: a person who makes purchases from an Internet store cannot always be sure that the product he/she has ordered will be delivered in a good condition. In most cases, when cash is used, buyers see the goods they buy, they can touch them, smell them, etc. With cash, individuals see exactly what they want to buy (Panurach, 1996).

If a person has problems, for example, faces a life-versus-death situation, credit cards can become a saving ticket. If a person has cancer, treating it may appear to be too expensive. Insurance companies do not give money to spend it on a bone narrow transplant, as it is still believed to be experimental. However, the situation cannot wait until the dispute is resolved. If a person has a credit card, which allows borrowing money, there is a good chance for this person to stay alive. Even if, after this operation, a person goes bankrupt, he/she can take part in a different program providing assistance to individuals facing similar situations.

Additionally, if a person travels and wants to make payments quickly and conveniently, he or she will have to exchange the currency. With a credit card, this problem disappears. A person does not have to search for a currency exchange and can pay with a credit card, no matter its basic currency. Finally, it should be noted, that using credit cards can help individuals to build a positive credit history. It is very important when applying for a job or in matters involving loans and rentals. With a good or excellent credit history, a person can ask for a loan to buy a car or a house, if he/she cannot afford buying it at once (Chakravorti, 2003).


Obviously, all forms of money have their advantages and disadvantages. To make a good choice, one should first understand his/her basic life needs. For example, those who travel a lot will find it easier to save and spend money using a credit card. If a person decides to use a credit card, it is better to look for the best offer, which includes insurance or other benefits. It is wise to remember that credit card companies use different types of tricks, and that is why everyone is to be careful while using a credit card. Each credit card owner should save all checks and documents to monitor their credit card balance. As a result, it is possible to say that the decision to use cash or a credit card depends on person and his/her needs.

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