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Cash VS Credit: Which is the Better Option?

The use of a cash-only system has many benefits. After the coronavirus pandemic and subsequent widespread concerns about the spread of infection, many of us have been utilising cash less frequently than ever before. No one but you will touch your card when you insert your chip or swipe it at the cashier.

Credit cards are convenient, and there are certainly some purchases that should be made with plastic, but they also make it difficult to keep track of where your money goes. 

With cash, things are different. That helps you save money since you can watch the Rands being converted into cents. Avoiding impulse buys is more of a mental exercise when using cash. 

Although many of us now prefer to pay with cards alone, there are still situations in which it may be more convenient, and better for our budget, to use cash. Below we will discuss a few key elements to consider regarding cash versus credit.


Comparing Cash and Credit

Cash is better for small, everyday purchases

When making a minor purchase at a local shop or business, paying with cash is preferable and may even get you a discount. It’s also worth noting that some small businesses impose a charge on customers who pay with credit cards. 

It is customary to leave a cash tip for service regardless of the setting, and doing so is appreciated even at restaurants when the gratuity is already included in the bill total.


No fees attached

Payment in cash is final; there are no interest charges or debt to worry about. But using credit cards comes with the danger of paying late fees, falling behind on payments, amassing debt, and damaging one’s credit score. If you prefer to avoid bank overdraft fees, using cash instead of a debit card is the way to go.

It’s easier to save using cash

When you pay with cash, you can limit your spending. Simply keeping track of your spending is one of the easiest and best approaches to reducing your monthly budget. 

With a credit card, you can conceal your true spending habits from yourself. As a result, you’re more likely to make extravagant purchases that are above your means. Also, seeing your savings grow may inspire you to be more creative in your long-term financial planning.

It’s easier to stick to your budget using cash

Cash is king because it simplifies financial planning and budgeting. When you know exactly how much money you have coming in and going out each day of the month, you can create a more precise budget.

It’s common knowledge that people who regularly use credit cards spend more money than they have. Cash is your best option when it comes to sticking to your budget.

You’ll be less tempted to overspend and may find that you spend less than you were before, helping you stick to your budget, which is a gain for your long-term goals.

You could score store discounts

Businesses, especially mom-and-pop shops, can incur additional costs when accepting credit cards. As a result, some establishments give a slight price cut to customers who pay with cash instead of plastic. Having large amounts of cash on you might also be a convincing visual that will coax your salesperson to sell you their products at the price you prefer. 

Cash is more convenient

Few establishments, if any, really refuse cash payments. If your credit card is ever refused, having cash on hand is a safe and secure alternative. Having cash on hand is essential when travelling internationally because it saves time during the currency exchange process.

Using cash more frequently is actually good for your credit score

When you pay with cash, you can rest assured that your credit history won’t suffer. By dealing in cash, issues with repayment, payback, or repossession are avoided. Your credit history will not be negatively impacted in any way. With cash on hand, you never have to worry about a creditor calling and asking about payment.

No more annoying ads

You may have seen an increase in solicitations and annoying ads after purchasing with a credit card. This is because stores are able to keep tabs on customer spending habits, share that data with third parties, and then direct more ads to those customers. 

In addition, you may receive less junk mail if you pay with cash. There’s a strong chance they won’t realise you’re footing the bill, which will cut down on the number of promotional mailings to your inbox.

You can still shop online using cash

One of the biggest deterrents to buying with cash is the fact that many people feel they can’t use it to access a wide variety of products and services online. This is not true, as you can easily convert your cash into an OTT Voucher and use it in a manyways online. 

With an OTT Voucher, you can secure lay bys online, bet on sports, upload data and airtime, and even invest in the stock market. OTT Vouchers even reward you with access to exclusive competitions and giveaways on the Second Chance platform. 

Frequently Asked Questions

If you pay for your purchases in cash, you won’t have to worry about paying interest on your new items. Also, new transactions could collect interest charges of roughly 30%, so paying with cash may be preferable if you have triggered a penalty on your credit card.

People generally favour cash payments over alternative options because they feel it provides a higher level of security.

When you pay with cash, it’s instantly deducted from your total. When you buy something and pay for it in full, the sale is finalised. You can use a credit card to borrow money. Lenders of credit cards handle the payment to merchants when you make purchases.

If your credit card is ever refused, having cash on hand is a safe and secure alternative. Having cash on hand is essential when travelling internationally because it saves time during the currency exchange process.

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