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Advantages of Using Cash vs. Credit

We’ve all had this moment – You’re checking out at the grocery store, and the cashier asks the immortal question: “Cash or credit?”

For once, you’re actually carrying cash. On the other hand, you have a credit card that gives you reward points with each purchase. Should you use a card to pay, or shell out the cash in your wallet?

Let’s explore the pros and cons of each payment method...

Credit Card Pros & Cons

Let’s start with the easy stuff. Many card issuers, banks, and credit unions (like us!) offer rewards programs. These can take the form of points that you can redeem for everything from cash back, miles, electronics to travel experiences.

Our UMe Visa Credit Card offers rewards for every dollar spent. Talk about a deal! This credit card also comes with a secure checkout process and purchase protection to keep your money and your personal information safe. 

If the worst should happen and you find there are fraudulent charges on your card, rest assured! All UMe Visa credit cards come with Visa’s Zero Liability Policy, which protects you from being held responsible for those unauthorized charges if you report the unauthorized charges promptly.

So, rewards are definitely a pro; what are some others? And what are the cons?

Well, we don’t really think of them as “cons” so much as misconceptions. And actually, those misconceptions are more like pros in disguise. 

Okay, let’s explain what we’re talking about so U can feel more confident about using your credit card.

Avoiding taking on credit card debt should be your goal. You hear warnings about getting into debt and declining credit scores. However, a card used wisely can be a great asset!

When you pay your bills promptly, you are building and improving your credit score. When you have good credit, you can get better interest rates on all other things requiring credit checks – auto loans, mortgages, personal loans, and more. You know… fun #adulting stuff.

Moreover, you can avoid paying interest when you make the payments on your bill in full and on time. If you do need the luxury of time to pay for something you need, your UMe Visa Credit Card carries a low, fixed rate that stays with you the entire time you have it! So, the interest you would pay using your UMe card would be lower than most other cards and fixed.

Cash Pros & Cons

Okay, so what if you decide to pay with cash? 

There are a few benefits to going the cash (or debit card) route. You can avoid the interest payments that come with a credit card bill, for one thing. But you can also make that happen using your credit card, if you pay it off each month – and that brings with it some important bonuses that may help you get more financially fit.

Cash is an effective option if you are trying to be more disciplined in your spending habits. It’s easy to lose track of your spending when you’re ‘paying with plastic’ because you don’t see or feel the effects immediately. Cash payments don’t carry over outstanding balances, and you’ll be less tempted to splurge on that cute little splurge that catches your eye in the checkout aisle, when you’re accounting for every dollar you’re spending.

On the other hand, when you stick with cash, you’re limited to what you’ve got on hand. It’s also easier to budget when you withdraw cash and use it for specific types of purchases. You see exactly what’s coming out of your account and how much you’ve got left.

Most retailers treat paying with debit cards the same as paying with cash. UMe’s Visa Debit Card carries the same Visa Zero Liability Policy as the Platinum Visa and makes paying for things while you’re out and about quick and convenient.

When you pay for things electronically, your bank automatically keeps a record. If you’re withdrawing cash from your checking account as part of a budgeting plan, you’ll have to keep track of where each dollar goes on your own.

This lack of record-keeping has another downside, too. You’re not building credit the way you are when you spend with a credit card, since it’s paying those bills that have an impact on your credit history. If that’s important to your financial goals (do you want to buy a car or own a home?), it’s something to think about!

Additionally, some places simply don’t accept cash. So if you’re sticking to cash as some sort of diet for your budget, that’s totally cool, but just know that some restaurants, retailers, and venues may be off-limits to you and your thrift-tastic ways.

Depending on where you are, you might also be on the hook for ATM fees when you withdraw cash. However, as a UMe Credit Union member, you have access to a network of surcharge-free ATMs all across the country. Find one near you with our ATM locator!

Cash vs. Credit, UMe's Got Your Back

Whatever your choice, cash or credit, UMe is standing by to support your decisions! On the one hand, you can withdraw cash from your UMe free personal checking account via ATM or with a Visa Debit card. 

On the other hand, you can charge it to your Visa Platinum Credit Card–with no annual, transaction, balance transfer, or cash advance fees –building your credit in the process. See the low rates and great rewards with the Platinum Visa!

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