Some days, the fear of losing control of your credit or debit card in a security breach can overwhelm the convenience of swiping your card to make a purchase. Should you sound the retreat and go back to paying cash? Keeping cash on hand can be a different flavor of pain in the neck. Is there an easy solution?
Let’s sort out the pros and cons of paying cash.
The pros of paying cash
- Protect your money and personal data from security breaches. You’ve undoubtedly read enough about the recent data breaches at Target and other major retailers to be permanently skittish about the security of your data and money. Suffice it to say, there’s no risk to your personal information or accounts when you pay with cash.
- You’ll never lose more cash than the amount on hand. Losing your wallet or having your purse stolen means losing only whatever cash you had inside—not a teeth-clenching death spiral that brings down your bank accounts and credit cards as well (unless your unused cards were in your wallet, that is).
- You’re better attuned to your actual spending. It’s psychologically more difficult to hand over hard-earned cash than it is to blithely swipe a card that accesses an ambiguous pool of cash or credit. When you pay with cash, you’re more acutely aware of how much you’re spending—and when it’s gone, it’s gone. No wiggle room for overspending.
- Avoid the telemarketing onslaught. When you pay with cash, it’s less likely you’ll be asked to key in your email address or telephone number to be added to yet another telemarketing list.
- Avoid personal tracking. If you haven’t swiped a credit or debit card, merchants won’t know and be able to track what you’ve purchased and where.
The cons of paying cash
- You’ll miss the convenience of apps that automatically track your spending. If you use an app to help you keep tabs on your budget and spending, you’ll have to enter cash expenditures by hand.
- Your purchases won’t be covered by additional consumer protection from credit card companies. Most credit card companies protect you from fraud and offer warranties against products that turn out to be lemons—protection you will not enjoy when you pay cash.
- You can’t get a refund for stolen cash. If someone steals your debit card and makes a bunch of fraudulent purchases, the bank will get your money back as long as you follow its reporting processes. If your cash is stolen, though, wave goodbye.
- Some merchants require credit cards. Some merchants, such as hotels and car rentals, require a credit card to secure the service.
- Automatic payment options may be limited. Many automatic payment options are linked to a debit or credit card.
Would you be better off paying cash than whipping out your debit or credit card?
You’ll have to decide which pros or cons resonate most strongly with you. Either way, as long as you take steps to protect yourself from fraud, you can rest assured that PenFed is also working behind the scenes to keep your money and personal data safe and secure.