Cash vs. Credit Card: Which Is the Better Way to Pay?

Cash vs. Credit Card: Which Is the Better Way to Pay?

Credit card offers frequently tout the rewards you earn when you spend with a card, but they don't always get the advantage over the time-tested greenback. Credit cards can get you in trouble if you carry a balance from month to month, as you'll pay interest on debt you accumulate on a card.

But that doesn't make cash the obvious choice, as it has its downsides, too. Carrying cash can be a risk, and getting your hands on it -- particularly outside of banking hours -- can be a pain. Here are a few instances where it may make financial sense to use one type of payment method over another.

Cash has its place: It's accepted almost universally and makes it easy to budget. Dave Ramsey has made a career as a personal-finance loudmouth by campaigning for cash-only budgets because cash enforces a hard limit on spending, unlike debit or credit cards. His low-tech envelope budget works for the simple reason that when you run out of cash, that's it -- you're out of money to spend.

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Source: Fool.com