Although using a credit card can be very smart for most purchases, there are still some items you should consider paying for with cash. This could include lower-cost items or as a strategy to avoid credit card fees. Here are 15 things you should always pay for in cash.
Small Everyday Spending
Paying with cash for everyday items means you don’t overspend. ScienceDaily reports that the convenience of simply tapping our credit card makes it far easier to make purchases that we wouldn’t otherwise. So, consider keeping cash in your wallet to prevent this.
Emergencies
Emergencies are never planned, so many Brits find themselves struggling financially when they arise, and therefore, paying for them on credit cards is tempting. However, this isn’t a wise idea, as emergencies can be very expensive. Instead, make sure you save up a sufficient emergency safety net to cover for such unexpected situations.
Student Debt
By paying for student debt with cash, you can avoid added fees. For example, Go Banking Rates writes, “About 85% of universities now accept credit cards as payment—but the privilege usually comes with a 2% to 3% surcharge.”
The Doctor’s Office
There can be surcharges of up to 4% if you use a credit card at a private doctor’s office. Paying cash means you’ll avoid any of these extra fees, especially as private healthcare bills are expensive enough without them. It’s a proactive choice that helps to keep your medical costs as low as possible.
The Petrol Station
Best Life writes, “Stations will mark prices higher for card payments to offset transaction fees from banks and credit card companies.” Petrol stations have a visible price difference between cash and credit payments. It encourages you to be budget-conscious when it comes to your fuel consumption.
Your Car
If you’re purchasing a new car, then this should always be paid for in cash. It avoids additional interest on depreciating assets. Not only this, but paying for a car upfront gives you the opportunity to save for something special, making it feel like you’ve put in the hard work to purchase the car.
Private School
The IFS reports that the average annual tuition fee from private schooling for your child is approximately £15,200. That’s going to be a huge burden on your credit debt, so instead of dipping into your retirement money to send your child to private school, start saving for tuition as soon as you have your child to avoid hefty loans.
Your Summer Holiday
Paying for your summer holiday in cash will avoid any debt accumulation that can occur from having to take out a loan or putting it onto your credit card. It helps to promote saving in advance for your holiday, making it feel extra special when you go.
Your Home Furnishings
If you’ve recently purchased a new home, then there’s no doubt going to be a mortgage where you have to pay a hefty amount each month. Saving for home furnishings upfront will avoid any more debts in your name. If you need to budget, then you can even look into secondhand options.
Buying Secondhand from Online Sellers
This helps reduce the risk of fraud in transactions with secondhand sellers. It will also encourage safer in-person exchanges, as the seller won’t have access to any of your personal details. Purchasing in cash from secondhand sellers is a great way to promote privacy and financial security.
Traveling Abroad
You should always pay in cash when abroad, as there can be some hefty charges if you choose to pay on a credit card. Paying for things this way also encourages you to stick to a budget while you’re abroad and not spend more than you actually have. It keeps you disciplined and means you can plan ahead.
Dining Out
Paying by credit card when you dine out isn’t always the best option when it comes to leaving a tip. For example, Real Simple writes, “There can be a delay in processing credit card tips, so the workers may have to wait until the next payday to receive the money.”
Entertainment and Leisure Activities
If you enjoy going out for entertainment and leisure activities, then paying in cash can ensure that you still have a good time while also sticking to a budget. It avoids the accumulation of unnecessary debt, as you can’t accidentally spend more than you have.
Personal Care Services
Insight Salon & Spa Software writes, “Many small businesses, especially salons and spas, have been slow to accept credit card payments.” The last thing you would want would be to head to a salon to find they only accept cash. It also means you can tip directly and avoid overspending.
Local Market Purchases
Paying in cash at your local market helps directly support small businesses. Many market stall owners may also have minimum card spending, so this allows you to budget and stops you from overspending on items you don’t need. It helps to create mindful community engagement and spending.