Why is it better to pay with cash than with a card? Which is better: cash or credit card
Over the year, the share of Russians paying for purchases only with bank cards has grown by more than a third - from 11 to 15%, a study by MasterCard has shown. The share of those who are ready to pay only in cash has also sharply decreased: from 54 to 38%.
Actively use bank cards, paying for purchases once a week and more often, 59% of the population of Russia (growth - 13% per year). Among the main incentives to pay more often without cash, cardholders list convenience, high speed of payment, security and the opportunity to receive a discount or bonus, the study says. Most often, cards are used in super- and hypermarkets, convenience stores and online stores, the survey showed.
The MasterCard survey involved Russians aged 25 to 45 living in cities with a population of 250,000 or more. The sample was 1021 people.
This trend is confirmed by the statistics of the Central Bank. In 2015, the number of payments by individuals using cards increased by 27.8%, and the turnover on them - by 11.9% in terms of volume, according to the annual report of the Central Bank. IN total transactions using payment cards, the share of non-cash payments in 2015 increased by 7.3 percentage points to 74.7%, in the total volume - by 6.1 percentage points to 39.5%. These figures include information on payments by legal entities, but the Central Bank clarifies that the bulk is payment for goods and services by individuals.
Banks also confirm the growing popularity of cashless payments. “People pay more with cards, because financial literacy is increasing, the acquiring network is developing, salary projects, loyalty programs. As a result, people get used to the cards and stop being afraid of them,” says a Home Credit representative.
An important factor is the development of infrastructure for accepting cards not only in major cities, but also in the outback, notes Nikita Ignatenko, head of the development of card products of the Binbank group: “Cards today are already accepted by many small stores located in medium-sized settlements". The development of the card infrastructure was also facilitated by legislative changes- the obligation of merchants to accept cards, he recalls.
The convenience of making payments leads to an increase in the frequency of purchases, a Sberbank representative agrees. A card with additional features gives customers additional income or bonus ( accumulative cards, spacemap, cashback), adds Alexey Golenishchev, Alfa-Bank's e-business monitoring director.
Considering that people's salaries do not increase, and prices are rising, bank customers are increasingly using credit card limits, Golenishchev points out, “it is more profitable to pay by credit card in a non-cash way, since for withdrawal loan funds any bank charges a fee at an ATM.
People aged 25-45 are the most active in paying with cards, residents of large cities with a white salary above the average, says Ignatenko.
The share of customers using the card only for purchases has grown from 25% to 73% over the past five years, says Aleksey Shchavelev, director of the cross-sales department at OTP Bank. He points to two main reasons for this growth: financial literacy of the population by acquiring experience in the use of financial products and increasing the share of service and trade enterprises that accept plastic cards to pay for goods and services.
Bank cards and other electronic money are gradually replacing the good old cash. This is a global trend. Using electronic money is fashionable, modern and convenient. BUT! Cash (or in other words, “cash”) has several undeniable and powerful advantages that we don’t know about or have safely forgotten about.
Personal history
I remember how I opened and received my first bank card. It seemed very cool to me. Then, with the growth of earnings, banks began to offer me “status” cards. I thought, "oh, how cool!" gold, platinum, black edition cards! So solid and beautiful, so many free things, so many bonuses and privileges! Why do banks need this?
When I found out “why” - I decided to get rid of the cards, but this step took me a couple of years - I “grown” to them so much 🙂 Therefore, I dedicate this article to unfashionable, outdated, non-status, uncomfortable paper cash! Let's see why cash is so cool and why people all over the world still say "cash is the king!". So cache...
Saves 20-30% or more in stores
According to numerous , we spend on 20-30 percent or more more money in stores when we pay with cards. Plastic doesn't hurt. Parting with paper money earned “by blood and sweat” is much “more painful” in moral terms. This was the main, but not the only reason why I switched to cash.
Helps you get the best price
Merchants often also give a better price because cash doesn't count for taxes, and also because the merchant pays a fee to process money paid by cards. In both cases, it is cheaper and faster for the seller to receive cash.
Stops from loans, debts, fines and commissions
You cannot spend more than you have when you use cash. And everything changes when you have credit card. Why wait when you can buy what you want right now?! In addition, using the cash, you will not pay the bank a commission for opening and using the card, for SMS informing, for cash withdrawals, for insurance, etc., as well as fines for late replenishment, for overspending on the card, etc.
Simplifies budgeting and cost control
Helps you learn to delay gratification
Children want everything now. Immature adults want the same. Both are not accustomed to waiting, postponing and achieving goals. Why wait when you can get a card or take a loan?! And yet, the ability to save pleasure for later is one of the most important skills in finance and in life. Not only will you not spend more money and not get into loans, you will much more appreciate the thing in which your time, effort and anticipation of a purchase are invested.
Helps to eat healthier
He is welcome everywhere!
In many countries, in many places, they still prefer the good old cash or put a limit on credit card transactions. Also, many sellers add 1-2-3% to the price of the goods if you pay by card.
It's harder to steal
It's easy to steal money from a card. When I used the cards, they stole enough from me 3 times large sums money (thousands of dollars) from the cards, provided that I am sooooo careful in terms of money and cards. I managed to return the money, but I know many stories when bankers did not return money or swindled people through the courts. Stealing cash is more difficult because usually people don't carry thousands of dollars in their pockets.
Indispensable in emergencies
Helps you enjoy shopping more
You will not only spend less money in the store and get a better price with cash, but you also get more morale from cash purchases.
This is also confirmed by research conducted by the Journal of Consumer, which has shown that the use of cash increases the psychological "pain" of parting with money, and therefore strengthens the "connection" with the purchase. This makes you appreciate the purchased item more and gives you more moral satisfaction.
More private
No wonder criminals prefer cash! 🙂 Cash transactions are difficult or impossible to trace. How can this be useful to ordinary citizens?!)) Well, firstly, there are fewer card transactions, less risk of exposing your card and becoming a victim of scammers. And secondly, data about your shopping preferences and purchases cannot be shared or sold to anyone if you use the cache.
It's easier to say no
It is what it is! It's much easier to say no to yourself, your spouse, kids, and anyone else when you run out of cash and can't spend what you don't have. This stops you from overspending and unnecessary purchases. It is a completely different story with cards when you have the opportunity to buy on credit and not wait.
Conclusion
Electronic money is replacing cash, which people have been using for thousands of years. However, you have to pay for the convenience of using electronic money - we spend more, borrow more, lose the ability to wait and achieve financial goals, expose ourselves to additional risks and, most offensively, get less pleasure from shopping.
Call to action
If you want to ✔significantly reduce your expenses, ✔repay loans faster, ✔learn how to control your expenses more effectively, get rid of (at least for a while) from all of us bank cards And electronic money (possibly, except for one debit card for receiving a salary and paying for purchases on the Internet). You can return to the cards at any time if you do not get the results you want.
Might be useful!
Giving up the cards is one of the many steps allowing you to improve your financial position. If the amount of your debts goes off scale and is not limited only to credit cards (for example, you also have a mortgage, car loan, consumer loans, debts to friends or relatives, etc.) and you cannot cope with debts on your own, check out the 2-week I will teach and show how to repay (all) loans and debts 2-3 times faster than the term and save on interest, as well. 2-3 times.
The course consists of 15 video lessons, passing which you will not leave your debts and a trace! Investment in this course will pay off from 60 to 80 times (!), which can be verified mathematically!
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3️⃣ Like, repost and write your honest comment
This way I will know that you like what I do and I will create more useful content! Thanks a lot in advance!
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👋 And I wish you well-being in finances, family and in life!
Timur Mazaev was with you, aka MoneyPapa, an expert in family finance.
The debate over which is better - cash or a credit card - has been going on for a long time with no clear winner. There are strong arguments for each option, and the answer depends on who you ask.
The Go Banking Rates website described why some people prefer to use cash and others prefer credit cards.
Credit is still a fairly new concept in the history of finance, which is why many people prefer to use paper money rather than pay with credit cards.
Here are some compelling reasons to always pay cash:
- Accepted everywhere. You won't hear "sorry, we don't accept cash here" anywhere. You can pay with money everywhere, except for the Internet. You can always make a purchase wherever you want. And here credit cards not accepted everywhere.
- visible expense. Many people choose to use cash simply because when they make a purchase, you can visually see how much you have left and how much you have spent.
- No interest or fees. The great thing about buying with cash is that you pay the cost of the item, and that's it. There are no interest payments or fees at the end of the term. Paying with cash makes shopping much easier and cheaper overall.
- freedom from debts. Using cash, you will not be able to owe creditors.
- Safely. You will never be a victim of hackers and your data will not be stolen. You don't have to worry about the security of your personal financial information when you spend cash.
Credit Card Benefits
The average American household has $7,817 in credit card debt, according to WalletHub's 2016 Credit Card Debt Survey.
Here are some of the benefits of credit cards:
- Major purchases. Imagine that every time you need to make an expensive purchase, you have to put off a few months or wait for a paycheck until you raise enough money. This is tolerable when you decide to upgrade your TV. But what if your car needs a new transmission or your roof is leaking? You can't afford to wait that long. With a credit card, you can make purchases and then spread the cost over a longer and more manageable period of time. Many credit cards offer extended warranties with purchases. This means that if you use your credit card to purchase a product with a guarantee, the credit card will extend that guarantee for up to 3 years.
- Tracking expenses. You can track and then analyze the spending of money. In this case, monthly and annual map reports will help you. With cash, this cannot be done if you do not keep receipts.
- Credit rating. IN modern society it's hard to get by without a credit score. A higher credit score can provide a better interest rate when you take out a mortgage or apply for a loan for a car, study. The only way to build a good credit score is to use a credit card.
- Bonuses. A credit card is more than just a piece of plastic in your wallet that you can use to pay for a product or service. It provides amazing opportunities to save money on purchases and earn rewards: travel, cashback, gift cards and other "goodies".
- Security. Yes, that argument was made in the benefits of cash, but credit cards have their benefits. The fact is that if you lose cash, then everything ... write “lost”. If you lose your credit card, you need to call the bank and block it, and then get a new one. In this case, you will not lose a penny.
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stdClass Object ( => 11346 => credit card => post_tag => kreditnaya-karta)
stdClass Object ( => 13992 => Likbez => category => poleznaja-informatsija)
stdClass Object ( => 20271 => cash => post_tag => nalichnye)
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Non-cash spending has long been firmly established in our lives. But still, some people, in the old fashioned way, prefer to withdraw their entire salary and pay in cash in stores. But paying by bank transfer from a card is profitable. And here are 7 reasons why.
You will receive interest on the balance
Many big banks encourage their customers to keep as much money on the cards as possible by accruing interest on the balance. For example, Tinkoff accrues 6% per annum on Tinkoff card Black, Otkritie - 5% for a Smartcard, and VTB - up to 8.5% for a Multicard. Even on the Halva installment card, you can earn if you deposit funds over the limit into your account - Home Credit Bank will charge up to 7.5% on them, depending on the amount.
The good thing is that banks charge interest on a daily basis. The client does not need to expect to keep minimum balance, as on a deposit - it is enough to continue using the money as before. You can safely spend or replenish them. All calculations are made automatically.
Flexibility in the use of funds and the advantages of a savings account make income cards an extremely popular tool.
Part of the funds will be returned in the form of cashback
To encourage customers to use the card more often, banks offer refunds. Most often it is 1-2% of the costs and up to 40% for partners. If you choose the right debit card with categories with increased cashback, you can save a significant part of the funds. And this is another argument why it is always better to pay with a card.
Good cashback programs offer:
- Tinkoff - 1% of all purchases and 5% - in user-selected categories;
- VTB - from 1% to 2% on all purchases, depending on the amount of expenses and up to 10% in the categories Auto and Restaurants;
- Ak Bars - 1% for everything, 5% - for entertainment and 10% - when paying for travel in transport;
- Alfa-Bank - 1% on all purchases if you spend more than 20 thousand rubles on the card;
- Opening - 1-1.5% for any expenses.
Often, cards with income on the balance also combine the cashback option. That is, on such cards you can both store money and spend it - as a result, the profit will be approximately the same.
Bonus system will be connected
If the bank does not return "live" money in the form of cashback, then most likely it has a bonus system. Sberbank has it, Rosselkhozbank has Harvest, VTB has Collection. You can purchase either one of the many Tinkoff co-brands to save on purchases at certain stores.
The number of accrued bonuses depends on the amount of expenses and the status of the client in the system. As a rule, you can get 0.5% -5% bonuses to your account.
You can spend them in different ways, the most common options are:
- payment for part of purchases from partners;
- payment for banking services (for example, SMS informing or monthly card maintenance);
- receiving compensation (the return of the very “live” money - in this case, the bonus program acts as an analogue of cashback).
Each bank has its own conditions. Familiarize yourself with them - it is quite possible that they will come in handy for you, and you will receive additional profit from everyday expenses.
You can fly for free
Miles are a variety bonus program. Depending on the expenses incurred, free miles will be credited to your account, which can be used to pay for air tickets, travel on railway and even hotel reservations and vehicle rentals abroad.
Most profitable programs offer:
- Promsvyazbank - Map of the world without borders;
- Alfa-Bank - Alfa Travel;
- Discovery – Travel.
As a rule, 1 mile is credited for every 50-100 rubles spent.
The cost of air travel is quite expensive, but with the help of miles cards you can significantly reduce costs. For example, by Tinkoff map it is enough to spend 600 thousand rubles on the card during the year to get a free ticket from Moscow to Sochi and back.
You will transfer money instantly
Internet banking allows you to send money in the blink of an eye. If you are a Sberbank client or Tinkoff Bank, then you do not even need to know the card number of the receiving party - you can send money to the second person by phone number.
If you use traditional cash, then you will have to look for an ATM for the transfer, enter card or account details, pay a commission, etc.
With a non-cash transfer, money is transferred instantly, in most cases there is no commission at all, and the limit for the average person is more than enough. Not every day you transfer 100 thousand rubles to your mother or friend!
You will get all the benefits of Internet banking
In general, the use mobile application or online banking will save you a lot of time when dealing with a bank.
Having a sufficient amount on the card account, you will be able to:
- pay any bills without queues and the need to look for an ATM or cash desk;
- replenish the phone and the account of the Internet and TV provider remotely;
- pay taxes, fines, loans, credit cards;
- open accounts and deposits.
If you wish, you can even open a brokerage account and purchase shares directly from the card online.
All this will save a lot of time and money - after all, you no longer need to pay commissions to the teller for the work. Internet banking will do everything for you.
And another plus is templates and automatic translations. you can customize automatic replenishment your account for paying a loan or create a template with the details of your management company to pay your utility bills literally with a couple of mouse clicks.
Connect cost control
If you want to know where the money goes, and at the same time you can’t or don’t want to keep track of expenses, then cashless payments will help you. At the end of the month, your bank generates a statement that shows your main expenses both by category and by individual stores. If you wish, you can clarify the amount of expenses by day or week in order to understand how money is spent in dynamics.
An analysis of cost control for 2-3 months can help you understand where you are wasting money, and where you cannot do without these expenses. This will be followed by cost adjustments and increased savings.
Also, if you wish, you can install an application on your smartphone to maintain family budget. It will analyze SMS from the Internet bank and sort out all expenses and incomes. Perhaps the functionality of such an application will be more useful and convenient for you than the built-in "analyzer" in the Internet bank.
Conclusion
As you can see, using non-cash card spending is much more profitable than just withdrawing money and spending cash. You will be able to multiply your savings, save on discounts and cashback, accumulate bonus miles or Thank you, and also get access to remote banking services. Another convenient function of plastic is the ability to analyze your expenses in order to understand where you can save your money.
Today, it has become so commonplace to pay for purchases made in stores using bank cards that fewer people use wallets.
However, this convenience can sometimes go sideways. Many examples from life show that relying too much on cards is also far from always worth it.
Let's describe a quite typical situation. The wife went shopping with her friends, taking her husband's bank card with her. Is there any difference here with cash?
At first glance, there is not the slightest difference - except that the option with a card often looks even more preferable for some women (since you can spend significantly more). However, lawyers in such cases recommend taking cash from your spouse.
Presenting at the checkout a bank card issued to your spouse, in fact, you are thereby trying to pay with someone else's card. At least that's how it may look from the seller's point of view.
Here it can be objected that, according to the provisions of the Family Code, all funds that spouses receive during marriage are their common property. Accordingly, they belong to both of them. The same applies to the money that is credited to bank cards.
This is true, but there are also features of the application of banking legislation, which states that debiting funds from a client's account is possible only on the basis of his own order.
Without such an order, debiting funds is allowed only in certain strictly specified cases: in accordance with a court decision or an order of a bailiff. At the same time, the use of bank cards by a spouse is not provided for among such exceptions.
Therefore, refusals of retail outlets in such situations to accept other people's cards for payment are completely legal. Here is a typical example from judicial practice(according to the decision of the Central District Court of Kemerovo in case No. 2-8448/2015).
Having entered the supermarket for groceries, the citizen collected the necessary purchases and went to the cashier to pay. Starting to lay out the products in packages, he gave the cashier a bank card to pay.
The cashier refused to accept the card handed over to her, because it could not belong to this buyer - it contained female data, and the buyer was a man.
The citizen stated that the card was issued to his wife, who is disabled. Since it is difficult for his wife to walk, he buys groceries himself. The money on the card belongs to his wife, who gave him the card and gave him a PIN code to make payments in the store.
The cashier in response refused to accept the card for payment, referring to the relevant instructions of the management. The citizen, in turn, decided not to yield and refused to withdraw the required amount in cash from the nearest ATM.
The security guards of the store joined the conflict that broke out. As a result, the man was arrested and the police were called. Arriving police drew up a report on the attempted theft of products in the store.
The citizen was taken to the nearest police station, and then he had to appear before the justice of the peace. Fortunately, he was able to explain the true circumstances of the case, so the charge of petty theft was dropped and the case was dismissed.
After that, the citizen, in turn, decided to go to court, accusing the store of causing moral damage due to the refusal to accept his wife's card for payment. But the court did not support him, considering the actions of the cashier perfectly legal.
Although the law does not explicitly prohibit the use of spouse cards, the court held that the bank card is a personal payment document , the right to use which exists only for the owner of the bank account linked to it.
IN banking rules there is also a direct prohibition of the transfer of the PIN code by the cardholder to third parties, including relatives. Upon detection of the fact of such a transfer, the bank has the right to disclaim responsibility for the fate of the funds on the account.
Consequently, the law does not provide for the conduct of transactions on the card if it is presented not by the owner, but by another person.
Therefore, when visiting a store with your spouse's card, you should prepare in advance for the possibility of ending this trip at the police station.