People are increasingly using plastic money due to the popularity of E-commerce (credit or debit cards). By utilizing online purchasing platforms, most consumers are changing their spending patterns by ditching paper currency.

Of course, plastic money has its perks:

• It helps in building Equifax credit score to get good credit rates
• It assists in creating a good credit profile that can further aid in getting good mortgage rates

However, these are only a few. The internet is filled with stories of people who achieved financial stability thanks to plastic money.

Is the era of paper money coming to an end? Is it possible that people have forgotten about cash? Do people prefer to pay using credit cards rather than cash? Let’s find answers!

Do People Prefer Credit Cards Over Cash?

According to the statistics of Maddie Shepherd, almost 80% of consumers like to use credit cards for their payments. While only 10% of the people prefer using only cash for all their necessaries.

If you analyze the numbers, the gap is huge! It implies that 80% of the surveyed population believed in the supremacy of plastic money over cash!

Furthermore, here’s what the statistics say:

• The average transaction using cash is almost $22. In comparison, the amount rounds up to $112 for all the non-cash payments.
• 45% of the people used the stored card information for all their online purchases, which implies 45% of consumers prefer online payment over cash on delivery!
• 54% of people preferred using debit cards, while 26% opted for credit cards for the majority of their transactions.

Still, the percentage difference is a lot compared to the cash statistics, where only 10% to 14% of consumers chose to use cash for their payments.

Why Is Plastic Money Dominating Cash?

More and more people prefer using their credit cards for recurring payments like gas bills, internet, cable lines, etc. The reason is the convenience and the cashback it allows for every set transaction.

A bank surveyed its three employees as to why they prefer using credit cards over cash? Let’s read what they said:

• Employee#1: “I became a power credit user when I transformed my financial habits eight years ago. Now I have put everything on my card due to all the cash back rewards!”
• Employee#2: “I heard it’s working for so many people, so I also put my recurring bills on my credit card to earn rewards on these transactions!”
• Employee#3 “I keep my credit in check by clearing the bill on every chance I get!”

Let’s read the reasons in detail:

1.   I want to benefit from the promotions!

Laureen (employee#1) explained that using cash doesn’t allow her to earn rewards. In comparison, a credit card can offer 20% off or some other welcome promotions which you can use well.

2.   I want to track my spending without effort!

Nate (employee#2) said that using cash for purchases makes it hard for him to track his spending, which further can upset his monthly budget. In comparison, using a credit card allows an effortless tracking and management of all his spending.

3.   I believe it’s better for the long-term!

Jessica (employee#3) stated that she experienced that using a credit card can be better for long-term benefits. Moreover, she sticks to a budget, so there’s no overspending or maxing out the credit card.

Plastic money dominates cash as it allows the consumer to build a credit score without spending extra. You just have to put your daily purchases on your card!

Which Is Better – Credit or Cash?

The answer depends on who you are asking! For instance, if you ask a 21-year-old who just got his first job and wants to have financial literacy, you may get the answer as ‘credit.’

However, if you ask a 78-year-old grandpa who has spent his life and just wants to have a simple lifestyle, you may hear ‘cash.’

So, the final answer really depends on your financial situation!

When to use cash?

When you should be using cash depends on your financial habits. In general:

• If you don’t want to deal with additional deduction charges or transaction fees, you might want to consider paying in cash.
• If you have a habit of overspending, using cash to pay bills might help. For instance, if you go out to buy groceries or clothes, you’ll only spend what you have at the moment.

Using cash might help you stick to your budget as you know what you have in your wallet, and there’s no chance of overdoing it.

When to use plastic money?

If you believe you can control your financial habits for the sake of all the credit rewards, you might want to consider switching to credit or debit cards!

1. A credit card may be the best option for you if you have a steady salary but spend a lot of money on groceries, clothing, or online shopping. This way, you can get cash back and other rewards on all your transactions!
2. If you want to have a strong credit profile to buy a house, car loan, or insurance, having a credit card can help!

Of course, there are more perks to using a credit card but as we said earlier it all depends on your financial habits and money preferences.

Final Thoughts

Because of the benefits that credit or debit cards provide, most individuals choose to use them instead of cash. However, if not used correctly, it can lead to debt, interest costs, and possibly legal action.

Nonetheless, the findings do not mean that cash will be fully eradicated from the earth.

Yes, there are still people that like to have at least some cash, like $20, in case credit card services aren’t available. So, in conclusion, to each its own!

If you like using the credit card for rewards, keep doing it. However, if you prefer cash due to the simple usage process, keep using it! It’s as simple as that!