Are you better off using credit cards or cash? Making purchases with 澳洲幸运5官方开奖结果体彩网:credit cards can offer convenience versus paying with cash. However, in somꦿe situations, using cash has more advantages.

Learn how your financial situation and the type of 澳洲幸运5官方开奖结果体彩网:credit card you use can play a 🍌role in whether it's best to use cash or cred꧃it to make a purchase.

When to Avoid Using a Credit Card

While it may be easy to use a credit card, in some circumstances it's best to use cash to make a purchase instead. Here are a few examples of when you should likely pay in cash versus a credit card.

With a Transaction Fee

Using a 澳洲幸运5官方开奖结果体彩网:credit card to pay expenses like income taxes, mortgage, health insurance premiums, or another recurring bill may cost you, even if you earn 澳洲幸运5官方开奖结果体彩网:reward points, miles🧜, or cash back. Even if the servicer allows credit card payments, they may charge a convenience fee that may outweigh the value of any reward.

For example, the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS) allows credit cards for tax payments, but charges a 1.75% to 1.85% processor fee. You'll also pay interest on the credit card if you don't pay your bill in full by the end of the statement cycle.

In contrast, the IRS allows 澳洲幸运5官方开奖结果体彩网:short-term payment extensions for no fee and installment plans for $22 to $178, depending on certain conditions. Late payments are subject to a penalty (0.5% per month) and interest (the federal 澳洲幸运5官方开奖结果体彩网:short-term rate plus 3%), but the total might be lower than the cost of using the credit card.

Without Negotiating

Whether you are facing large medical bills or another significant expense, contact the company's billing department before you charge a credit card and potentially start a 澳洲幸运5官方开奖结果体彩网:debt cycle that can be difficult to escape.

You may find the company is willing to 澳洲幸运5官方开奖结果体彩网:offer a payment plan with more advantageous terms than your credit card. ꦬThey may even reduce the bal🍎ance.

While Getting a Mortgage

Mortgage 澳洲幸运5官方开奖结果体彩网:underwriters are wary of changes in your 澳洲幸运5官方开奖结果体彩网:creditworthiness between the time you apply for a 澳洲幸运5官方开奖结果体彩网:mortgage loan and the time it closes.

If you recently charged new debt, reducing your credit availability and increasing your credit card 澳洲幸运5官方开奖结果体彩网:utilization ratio, your 澳洲幸运5官方开奖结果体彩网:credit score could take a hit, and you may not qualify for the loan. If you're in the process of getting a mortgage, use your credit cards very sparingly or not at all.

When Buying Beyond Your Budget

Avoid using a 澳洲幸运5官方开奖结果体彩网:credit card if you cannot afford a purchase, whether it's a restaurant meal, a new outfit, or a vacation. Without the cash flow to pay the credit card balance, you will face interest charges that can 澳洲幸运5官方开奖结果体彩网:snowball your debt.

If you have credit card debt, you may want to pay down the balance before adding any new charges, or risk getting stuck in a cycle of debt. Making only minimum payments on your credit cards could mean paying for purchases for years.

Reasons to Use a Credit Card

Using a credit card carries risk, but there are many situations when it makes sense to use a credit card over cash, such a🍒s for convenience, card benefits, security, or rewards.

Convenience

Credit cards are often 澳洲幸运5官方开奖结果体彩网:more convenient ꦓand 🌟secure than carrying cash. As long as you can pay your bill in full each month, using a credit card is typically more advantageous than using cash for in-person purchases. Online transactions will likely require a credit card for payment unless you use your 澳洲幸运5官方开奖结果体彩网:debit card.

Warranty or Purchase Protection

A credit card can help you protect a major purchase, as card issuers may offer purchase protection and an extended warranty for items bought with the card.

For example, Visa will extend the original manufacturer's warranty for up to one year, up to the maximum sum insured that applies, when you pay in full for an item with your Visa card.

Stronger Fraud Liability Limits

Credit and 澳洲幸运5官方开奖结果体彩网:debit cards limit cardholder liability in the event of fraud, but credit card protection is typically stronger.

A credit cardholder's liability for fraudulent use ranges from $0 if you report the loss before any fraudulent charges to $50 if you report the loss after unauthorized use occurs.

However, with a 澳洲幸运5官方开奖结果体彩网:debit card, you 🥀can potentially face unlimited lia🍬bility. Debit card liability works as follows:

• You have $0 liability when you report the loss before unauthorized charges are made
• You pay $50 if the fraud is reported within two business days
• You pay $500 if you report the fraud more than two but less than 60 days after it occurs
• If you don't report the fraud until more than 60 days after, you face unlimited liability

Card Benefits

Co-branded credit cards typically 澳洲幸运5官方开奖结果体彩网:offer exclusive benefits speci💧fic to the brand. For example, some airline credit cards offer free checked bags to people traveling on tickets purchased with the card.

Earn Rewards

Many credit cards offer rewards programs that provide a range of benefits, from cash back to travel points. You can earn hundreds or even thousands of dollaಌrs each year with rewards returns, including everyday h꧒ousehold spending.

For example, the 澳洲幸运5官方🤡开奖结果体彩网:American Express Blue Cash Preferred card pays 6% cash back on grocery store spending up to $6,000 per year, for a potential rebate of $360. Cardholders earn a similar or smaller percentage back for other categories of spending.

Security While Traveling

People who travel are more vulnerable to fraud because they are in unfamiliar territory, where they may not know the local language. Lost or stolen cash can't be replaced, but you can report a credit card lost or stolen so it can't be used by anyone else, and you can receive a replacement card.

The Bottom Line

Both cash and credit cards offer advantages when making payments. Avoid using a credit card when you can't afford the purchases, because your debt can snowball rapidly. Focus on using credit cards as tools to get added value from your planned spending through rewards and protections.