Don’t Pay With Cash Unless You Have To

Do you pay with cash or swipe a card?  Some will swear that paying with cash can save you money.  After all, you’re only spending what you have on hand.  This is definitely true, but that doesn’t mean cash is king.

Why We Don’t Pay With Cash

For our spending purposes, we rarely pay with cash.  The only times we do is when we have no other choice.   We don’t think paying with cash is necessarily a bad idea.  It just seems that using a card works better and offers us a few more advantages.  Here are a few.

Credit Card Rewards

We do most of our spending on three different cards. They all provide different rewards.  We pick the card we use in order to maximize our rewards.

credit card rewards
Reward credit cards can give you freebies.
  • Costco Cash Back Visa Card.  We use this card primarily for gas, restaurants, travel, and Costco shopping.  The reason is simple.  It provides 1% for all spending, but provides between 2-4% cash back on all of those categories.
  • American Express Blue Everyday Card. This is the card we use mostly for grocery shopping.  Same deal as the Costco card, in that it gives 1% on everything, but for grocery shopping you get 3%.  With our family of four that includes two very fast growing children, that extra amount adds up.
  • Southwest Visa Card.  Most of our other spending goes on our Southwest card.  This gives you one mile per dollar spent.  I’ve done the math, and at least last time I checked, the standard ‘cost’ of a flight using miles works out to be about 20% cheaper than paying in cash. We took an anniversary trip to Cancun a couple of years ago with no cost whatsoever.

Good Discipline

One of the drawbacks of using credit cards is that it opens up the possibility of spending more than you would otherwise.  While this is often tempting, I think we are pretty disciplined.  I would confidently state that we rarely buy anything we wouldn’t otherwise just because we’re using a card.


We pay our credit cards off every month.  No exceptions.  This is critical if you use your cards. Otherwise, the interest charges would surely erase most if not all of the rewards you got from the card.  But, by paying off the credit cards every month, our interest charges are exactly $0.00.  That means that every single reward we get from our credit card is at little or no cost.

Tracking Spending

I track our spending pretty religiously.  When you pay for things on the credit card, it’s easy to log on and match up every charge with an assigned spending category.  With cash, it doesn’t work.  You can write it down or use an app, but that’s just extra steps.  Honestly, the built in tracking that you get by swiping a card is very valuable to me.


If I were to lose my wallet, I am at less risk of getting stuck for a loss with cards than with cash.  If I drop cash, that’s pretty much assured to be gone.  With a card, I can cancel it as soon as I realize it’s missing, and work with the card company in the event of any fraudulent charges.

Readers, do you use credit cards or do you still find cash is the way to go?


6 thoughts on “Don’t Pay With Cash Unless You Have To”

  1. Like you, I do almost all of my spending on my credit cards — also for the rewards. Mostly I use the Citi Double Cash card unless my Chase Freedom has a 5% deal on a specific category. I transfer money out of my main account as I spend it, then make weekly payments to keep the balance sane.

    Personally, I’ve never found that cash helps me spend less. If anything, credit card spending has more of an impact because I have to go home and transfer the money out, meaning I see the total I’ve spent twice in a very short time period.

  2. We do the same for the same reasons. We have a good rewards card and have been able to travel exclusively off the points we earn on everyday spending. When I have cash for some reason, it takes forever before I need to go to the atm again…several months, sometimes.

    One great side benefit is that I no longer need to carry a purse. My credit card and drivers license fit in a pocket on the back of my cell phone. As a former purse-carrying person, this has been a revelation.

  3. It is true that if you lose your cash, it’s probably gone for good. But consider this…

    Is it worth having your bank/credit card company know what, when, and where you buy everything? Then selling/distributing that data to who knows who? Or if there was ever a hack?

    • Interesting point. There are definitely pros and cons to each. I think it just depends to what variables you consider most risky, and what your tolerance is to that risk. This is different between people.

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