Why the Cash Versus Credit Argument is All Wrong!

This or That Why the Cash Versus Credit Argument is All Wrong!

So I just finished reading a personal finance blog with a guest poster who wrote about cash versus credit and as is usually the case with the blogosphere, this guy is advocating for using credit cards instead of cash.  In the interest of “good-will”, I shall leave the guest blogger nameless but all you have to do is Google cash versus credit and read where most of the mainstream personal finance advice lies.

Let’s hit his arguments one at a time, shall we?

Argument Number 1 For Using Credit Cards From Guest (im)Poster:

“Sure, it’s generally better to get that transaction over and done with – with a loose $20 or a charge to your checking account, but it’s a fact that some transactions are safer and more rewarding when you swipe your credit card

Why? Because credit cards are by and large a more secure way to make purchases than debit and – believe it or not – cash. Seriously – when’s the last time you received purchase protection on an item you paid for the ole’ fashioned way?”

Rebuttal Number 1:  Get the transaction over and done with – with a loose $20 or charge to your checking account; really?  First of all, when you use a debit card, you are ‘debiting’ your account and spending money you currently have, not charging it.  Secondly, how is swiping your credit card more rewarding?  This was never explained in the article (probably because it’s not explainable!)

The author also wanted to know; when was the last time you received purchase protection on an item you paid for the “ole fashioned way?”

This one completely threw me for a loop.  Did he mean purchase protection when walking in and paying cash at a retail establishment?  If so, here’s my response:  before making any purchase at any retail establishment, you should always find out what the “refund policy” is.  I call this “common sense” purchase protection for all you Amateur Consumers icon smile Why the Cash Versus Credit Argument is All Wrong!

If he meant; Do you get purchase protection from swiping a debit card? The answer to that from many banking institutions is YES!  Here are a few banks that provide protection on both consumer credit and debit card usage:




Argument Number 2 for Using Credit Cards from this Guest (im)Poster:

“Using your credit card online is advantageous to paying with debit for a few reasons, but the most obvious being that it’s less risky to use your credit card for web-based purchases since it’s not attached to your personal bank accounts. 

The more websites you spread your banking information on (via debit card use), the more vulnerable your checking and savings accounts become to identity theft. Credit cards are notoriously stronger for weeding out suspicious items charged to your card. Not to say banks are bad at signaling ID theft – they’re just generally not as quick to identify suspicious activity.”

Rebuttal Number 2:  If you checked out some of the links for banks listed above, you would see that you would, in fact, be protected the same by using your debit card for purchases as you would a consumer credit card.  Again; do your homework and know whether your bank or credit union stands behind you in the event of fraud or identity theft.

Let me add this little tidbit: the author of this blog post added; some credit card companies – like Discover and Chase – have some excellent online marketplaces where you can redeem accumulated cash back or points at discounted rates. So if you have cash back or rewards accrued on your credit card, you’ll save even more using your credit card.

Say what?  Spend more to save more?  This guy is starting to sound like he pushes credit cards – Oh wait; he does.  Keep reading icon smile Why the Cash Versus Credit Argument is All Wrong!

Argument Number 3 for using credit cards from this Guest (im)Poster:

Speaking of rewards, Mr. personal finance blogger and guest poster goes on to say; if you’re the proud owner of an airline miles credit card, you could be missing out on some seriously free miles by opting to purchase your airfare with debit or cash.

Few big-ticket items net you more rewards than airfare. Plus, credit card issuers like American Express and Chase offer excellent travel discounts when you redeem through their online marketplaces.

And finally, if you have an airline-branded credit card then there’s no reason not to use your airline miles credit card. Earn VIP status with your favorite airline by racking up the freebie miles and making travel purchases with your travel rewards card. (A no-brainer, but worth a reminder.)

Rebuttal Number 3:  This one is a little tricky.  If you are a frequent flyer; defined as flying anywhere between 25,000 – 100,000 miles a year and you are footing your own bill, then using this type of consumer credit card could be beneficial to you.  But if you’re not, stick to using cash!

Hell, if you don’t have a credit card (I haven’t used credit in over 2 years), here’s an excellent article on how to buy airline tickets with cash!

Rewards…or Regret

This guy’s last piece of advice on his guest post was using your credit card for Concert or Sport Tickets because…wait for it… some card issuers offer some serious perks when you purchase event tickets using your credit card. For example, American Express members that carry their prestigious Gold Card (among several others) are granted access to special Gold Card Events which can include preferred seating, pre-sales and discounts to some of the best entertainment and sporting events.

Really?  OK.  If you have the Amex Gold Card and you can, and will, pay off those tickets in full when the bill comes due, then go for it!  Otherwise the “spend more to get more” argument is just above the “spend more to save more” argument!”

Here are 2 Indisputable Reasons Why Using Cash is Better:

  1. By using cash (or your debit card), there is absolutely, unequivocally no way you will ever experience credit card debt!  ‘Booyah’; take that personal finance blogger boy!

Besides the fact that cash is accepted EVERYWHERE, some people have argued that using your credit card is a way of getting an “interest free” loan if you pay it off in full when the bill comes due.  As we all know, the road to hell is paved with good intentions, or in the case of personal finance; the road to credit card hell!  So without further ado, here’s reason number two of why using cash is better:

  1.  Life happens; but by using cash, you make sure “shit” doesn’t happen – as in bad!

Oh, and the author of the guest post works here.  Think he has an agenda?

Look; when advice is passed on in the blogosphere as personal finance advice when it’s truly just a “marketing message” disguised as personal finance advice, that’s when I have to call HORSESHIT!  It’s why I wrote Who Can You Trust When Taking Credit and Financial Advice.

What about you?  What are your thoughts about using cash versus credit?  Please let me know by leaving a comment below.  If you liked this post, please share it with your friends by clicking one of the social sharing buttons to the left.  Now Comment Away icon smile Why the Cash Versus Credit Argument is All Wrong!



  1. I can’t blame the guest post blogger – he believes in his product (even though you have shown how he is wrong). Of course he’s going to push the Credit is better than Debit argument, it’s his job to sell credit cards.

    Alex, I’m with you all the way! I’m going to go read your “who can you trust” article next. I think you and I may be brothers from another mother!

    PS – I love double-entenres – which is how I read the last sentence of your intro statement “the mainstream personal finance advice lies.”. Read it back to yourself with both definitions of the word “lies”. :)

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