There are lots of things that people still pay for in cash. But it’s important to note that the trend is shifting towards digital payments and, in many places, electronic transactions. The widespread adoption of digital payments and electronic transactions offers numerous advantages in terms of convenience, security, efficiency, and financial inclusion.
While paying in cash has its own advantages, there are still certain things that you should never pay with cash. Here are a few:
High-Value Purchases
High-value purchases, such as cars or household appliances, often come with financing options that allow you to spread payments over time. Using cash may limit your ability to take advantage of these financing offers.
Also, you can earn points/cash back while purchasing with cards, which effectively reduces the overall cost of the purchase. Plus, with the cards, it’s easier to claim extended warranties or dispute the charge if something is wrong with the item you bought.
Online Purchases
Using a card for online purchases is always better because it provides better security and automatic benefits such as extended warranty and time-limited insurance.
However, it’s better to pay in cash when buying something from reselling marketplaces like eBay and Facebook.
Digital Products and Services
Most buyers usually expect immediate access to the purchased item or service for digital products and services such as streaming services, software subscriptions, and online memberships. Paying by card or digital wallet allows users to download or access the product instantly without delays.
Aside from a seamless checkout experience, users may also earn rewards points, cashback, or other incentives using a card or digital wallet for digital product purchases.
Business Bills
From small to large, all businesses need to maintain accurate financial records and track their various business expenses, including utilities, office supplies, and services. Being cashless simplifies your business accounts and taxes and saves you from a lot of hassle.
Investment Transactions
As an investor, you want to capitalize on market opportunities without waiting for traditional bank transfers to clear, right?
Whether you want to deposit into investment funds or transfer money to your brokerage or investment platform, digital transactions are the way to go. These transactions are typically processed electronically, meaning funds are transferred almost instantly to the investment account.
Large Donations
Most charities accept cash donations if offered, but many charities and nonprofit organizations now prefer online donations, especially for large amounts. Online donations eliminate the need to handle large sums of cash or write physical checks, streamlining the donation process.
Also, donors may get rewards, cashback incentives, or other benefits for online donations.
Travel Expenses
Regarding traveling, there seems to be an ongoing debate about whether using cash or credit is better. You may need to carry a little cash, but credit cards are the way to go. From earning points to getting access to exclusive airport lounges, using a credit card can help you save money and elevate your travel experience.
Carrying large amounts of cash can make you susceptible to pick-pocketing or theft in some locations.
Bills and Utilities
The good old days of paying bills and utilities with cash are over. Beyond the convenience and accessibility, paying bills online saves you from a lot of trouble.
With a credit card, you can set up automatic payments or schedule payments in advance to avoid the hassle of manually paying bills each month. However, be mindful of paying off the entire bill in full at or before the end of the month to avoid interest rates.
Legal Fees
Legal fee financing can be a significant concern for many. Paying in cash is fine if you can afford to pay the full amount upfront. Still, you miss out on the convenience of settling invoices or retainers quickly and easily when you don’t pay your legal fees with a card.
Even if you aren’t paying it off immediately, paying with a card makes it easier to keep track of your legal expenses over time.
Concert or Event Tickets
When buying tickets to concerts, sporting events, or festivals, you should use payment methods that come with protection, so steering clear of cash is your best bet. Using a credit card for ticket purchases ensures that you have some recourse if the tickets are not as promised.
Even with some credit cards, you can earn up to 4% cash back on entertainment purchases or enjoy other perks associated with your card.