On Cue CCU

I came across an interesting debate this morning, the battle between debit cards and cash. It’s a decision I struggle with every day. Should I throw this on my debit card or should I just pay in cash? What are the advantages or disadvantages of doing so? I stumbled across two authors who may help you decide. David from My Two Dollars thinks that debit cards are the future of finance while Kevin from Out of Your Rut believes that it’s time for cash to make a comeback. I’ve narrowed their arguments to match them up in three specific categories: budget, theft, and simplicity. Let the battle begin!

Cards are plastic fantastic!

Stay on budget – Online banking has made money management simple and with debit transactions being processed nearly every day by each business, you can check how much money you have available easily. Unless you’re a person who carries only cash, chances are you have a savings or checking account in addition to the cash, and thus, you have to keep track of multiple sources of finances to determine how much money you have.

Theft – If you are robbed and you’re carrying cash, it’s typically gone for good. However, if you are robbed and carrying a debit or credit card, all you have to do is call your bank or credit card and cancel those cards, telling the authorities that it was stolen. Although identity theft is more prevalent when you’re carrying things other than cash, if you act quickly after realizing your cards are gone, this too can be limited or avoided.

Simplicity – All you have to carry is a single card unlike cash where you have to go to ATM’s or banks to refill on cash. Debit cards allow you to pay right then and there. Also, although some places do not accept specific types of credit cards or checks from out of state, nearly every place nowadays will accept debit cards.

[via My Two Dollars]

Cash tried, tested, and true

Stay on budget – You will never pay for more than you can afford for anything, the way you do when you pay with credit. You will be more likely to stay on budget as studies have shown people will spend more if they pay with a card opposed to cash.

Theft – Though you can lose your cash to theft, your loss will be limited to the amount of cash you had with you, and there is zero chance of identity theft because cash carries no record of you.

Simplicity – Cash is the ultimate form of financial simplicity. You pay and you go, and there’s no chance that additional charges can be added to your bill after the fact. There are no “gotcha provisions” with cash as there are with cards.

[via Five Cent Nickel]

What do you think? Do you prefer paying in cash or would you rather swipe your card? Weigh in the debate with a comment below.