What Makes Credit Better Than Cash?


These days, you’d be hard pressed to find a Canadian consumer who doesn’t own at least one credit card. In fact, it would be a lot easier to locate a Canadian consumer who only uses his/her credit card to make purchases. For many years, our nation has been moving towards being a cashless society, as many shoppers don’t even carry cash on them anymore.

There are so many benefits to paying for purchases with credit cards over cash that it almost makes no sense to use cash at all. This isn’t to say, of course, that cash has no value. Of course it does! However, for the majority of Canadians, credit is simply better than cash.

Credit cards allow shoppers to make bigger purchases.

Cash is limiting. You can only spend as much as you have on you. The very nature of credit, on the other hand, is that it allows shoppers to spend more than they have at the moment. By using credit cards, shoppers know they can make purchases they can pay for in the future. Their credit card issuers allow them to make instalments on those payments by due dates each month. This enables big purchases to be made when they would otherwise be unaffordable.

“With cash, your spending is limited to what you have on hand,” affirms LaToya Irby on TheBalance.com, “Credit cards, on the other hand, provide you with additional purchasing power without the risks that come with carrying the same amount of cash…Studies have shown that people tend to spend more with a credit card than with cash.”

Credit cards allow shoppers to earn rewards.

One of the top reasons so many shoppers prefer their credit cards over cash is because they receive benefits for every dollar they spend. What paying with cash can’t do is earn you reward points that can be put towards such freebies as airline tickets, hotel stays and car rentals. And as credit card holders are well aware, the rewards for spending on their cards far exceed travel benefits alone.

“Many credit cards allow you to earn valuable rewards for your spending in the form of points, miles or cash back,” notes Discover, “The more that you use credit cards for all of your regular purchases, the more rewards you will earn.”

Credit cards offer purchase protection.

When you pay for a purchase with cash, you have no protection against the loss, theft or damage of the item. By putting the purchase on a credit card, such protection is made available. As Irby points out, federal law and credit card fraud protection policies limit your liability for fraudulent charges made on a lost or stolen credit card.

“Not only do you get fraud protection when you use a credit card, you also have protection against items you purchased but never received or items you received that were damaged or not delivered as promised,” she explains, “With cash, your only option is to resolve these issuers directly with the merchant. Credit cards give you the ability to dispute transactions if the merchant isn’t handling an issue to your satisfaction.”

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