Cash or card?

[AnalyticalEngine]

I'm curious what you all use to buy stuff: cash or credit/debit card? It seems like almost everyone has switched to card these days but cash still has some distinct advantages. Cash is far superior if you're concerned about privacy for example. But card is more convenient and has fraud protection. I know you can also get travel points from credit card, but I've honestly always struggled to have high enough spend for that.

So which do you all prefer and why?

[Chris]

you can also get travel points from credit card, but I've honestly always struggled to have high enough spend for that.

I think for most people around here (self included) the only feasible way to really reap rewards from travel credit cards is through sign-up promotions, not through daily spend. An airline card might net 40-60k points for spending $2-3k in the first 3 months. That's enough points for a long-distance round trip. The spending requirement isn't too hard to hit if planned correctly. Just make sure you batch up any larger spending into that 3 month period: annual home insurance, car insurance, gifts, pre-pay utilities, rent, etc.

After the sign-up bonus is achieved though, it's gonna be a long haul to generate an appreciable number of points when spending at ERE levels (most cards are 1 point per dollar spent). The best bet for everyday spending would be the instead use a cash-back card that that can be redeemed in smaller increments.

[Hristo Botev]

In a perfect world I'd opt for cash, exclusively (or even personal checks); but I don't think that's even a possibility for our recurring, monthly expenses. And for our other, variable expense categories like groceries, gifts, restaurants, etc., I think it'd just be too messy for our family of four to keep track of where everything is going. That said, I'd love to just take out a set amount of cash each month with the understanding that this is it for all those variable costs; but the reality is that doing so would be adding an inconvenience to what is already a pretty hectic lifestyle. Credit cards are just too convenient, unfortunately.

I'll add that we finally gave up on chasing cards that incentivize spending and that have sign-up bonuses, as lo and behold, we spent more and had more credit cards when we played that game. I know some people make those cards work for them, but we aren't those people. Now we just have one card from the same bank that has our saving and checking accounts, and it makes it easy to see everything in one place.

Of course we are really big spenders, relative to par for this forum. If we were a couple Jacob spending levels below where are now, it'd be easier to keep track of cash expenditures.

[intellectualpersuit]

No credit card here, but will probably get one soon like a friends that gives back 1% on all purchases and 2% on gasoline which is a benefit if you keep it payed off every month. I use a bank card for most things, cash is preferred for small purchases and alcohol and similar.

[Salathor]

Travel points are basically worthless, especially at ERE levels. Like someone else said, sign ups can be slightly rewarding, but are kind of a hassle.

The biggest advantage I have found was with the price protection feature some credit cards offer. If something goes on sale within X days (often 30), you can get reimbursed. I saved something like $400 with that feature last year.

[bostonimproper]

Credit card for everything. Easier to track my spending that way. Also, my purchase history isn't that exciting (care less about privacy in this aspect of my life).

[take2]

I’m just waiting for @2Birds1Stone to join in and school us on CC sign up bonuses. It may very well be his full time job soon

I use CC for everything possible for both tracking and cash back reasons. Cash gets tracked as it’s own category and it’s usually ~5% of my total.

[classical_Liberal]

Right, wheres 2B1S?!

I'm a card guy. I only do one new card a year to collect the bonus, and use a 1.5% cash back on everything card the rest of the time. So, yes, I'm strategically getting the new card when I know i"ll have some lump sum spending, and I'm spending a few minutes researching the card with the best bonus I think I can hit. Maybe 30 minutes of thought, other than that, it's no work at all. I make $500-750 year on average. This is nontrivial for anyone near ERE spending.

[GandK]

Personal card for Costco, gas and groceries.
Business card for G's business expenses and any bills we can expense.
Cash for all others.

Basically if we get paid enough for using a card, we do. If not, cash, because hacking & tracking concerns. And "points" do not equal getting paid enough for us.

Edit: if it were just me, we'd be a cash only household. G handles the card stuff.

[IlliniDave]

I use a cash back card most of the time. Sometimes use cash when I'm concerned about possible fraud (e.g., the one or two times a year I might find myself inside a bar, or in touristy places).

[OTCW]

One credit card for in person purchases
Separate credit card for online/Amazon/Ebay purchaes
Small amount of cash
Never give or use my debit card for anything other than a trusted ATM.

[Lucky C]

Cash for local businesses that I want to succeed in order to maximize their profit & the amount of money that stays local (e.g. I miss out on 1.5% cash back but the local economy holds on to 3%). Credit for all else because who cares if an extra percent goes to Visa instead of Walmart etc.

[Frita]

Our credit union will pay 4% interest on up to 15K as long as we have one direct deposit per month and make 10 debitcard transactions averaging $5 each. This is an emergency fund so we make those 10 debitcard purchases.

After that we use an Amazon VISA that pays 2% cash back, paying the balance in full each month. I have never figured out the travel hacks.

[Lucky C]

The rewards cards are mainly good for low spenders (ERE) only if there is an unusually high expense coming up. For example Chase Sapphire Preferred has one of the best intro rewards: 60k points = $600 cash back or $750 toward travel purchases. For the reward you need to charge $4k in the first 3 months. One time I charged tuition to the card, work reimbursed the full tuition, and so I essentially got paid the signup bonus ($400 at the time) for that semester's coursework. Then I just canceled the card a year later to avoid the annual fee. Pretty simple and you can repeat every few years.

[Riggerjack]

Card. The Costco credit card. It pays me cash back, and gets paid off each month, so no interest or fees. The cash back covers our membership plus.

Online purchases are easier, and fraud protection is handy. DW was hacked, someone charged up 3 flagship phones on our account (nearly $6k! ). The fix was to dispute the charges, maybe 2 minutes, online. Easy.

Why take miles when cash back is available, generally at equal or higher rates?

[C40]

There are many different types of credit cards, and there are some that work ok/well for even us low spenders

The cards that give a large sign-on bonus often won't work well for those of us with low spending, because we won't spend the amount needed quick enough to trigger those rewards. But, there are other types.

One that I use gives me 1% cash back on all spending, and I think 3% on a category of my choice (like groceries, gas, online purchases), which I can change pretty frequently in order to maximize cash back. It's not a big deal because I don't spend much money, but every 6 months or so, I notice I have like $150+ sitting in there to claim.

Another I use now is very good for international transactions. It uses a very fair exchange rate and charges zero foreign transaction fees. So It's basically a card I can use to make a charge anywhere in any currency without incurring any extra costs. There are also some travel miles given but I haven't paid attention to those yet.

I also have a travel-focused checking account. The ATM card tied to it can be used at most or at least many ATMS all over, and they refund all ATM fees, which can be over $6 a pop.

There are some places where I will never use a credit card. A bar is one example.

[RealPerson]

Why take miles when cash back is available, generally at equal or higher rates?

We travel a lot. The airline tickets I look for with miles typically are valued at 5 to 8 cents per mile, depending on the flights involved. I know of no such benefit in cash back programs. But it takes time to learn the airline miles rules and find the very best deals, whereas cash back is effortless.

[Forskaren]

I pay mainly with credit card or using my online bank.

Here in Sweden cash is going away very quickly. I seldom pay in cash.
In Sweden the rewards for using a credit card is more limited than in the US. I think part of that is some EU rules limiting how much the card company can charge vendors.

Many credit and debit cards in Sweden doesn’t work with Google pay in shops, but I have gotten two that does work. I pay using Google pay on my phone when possible in shops and restaurants.

What I like most about credit cards compared to debit cards is that you don’t need to check your balance before buying. If you connect your debit card to a special bank account with low balance, purchases may fail (especially when money is reserved). If you connect your debit card to your main account, paying rent may fail if your card is compromised and account drained. With credit cards it is not a big deal, since it is the banks money that will be locked up.

[The Old Man]

Mainly credit cards. Never debit cards. Debit cards are only for use at a trusted ATM. Cash is a back-up for power failures, compromised cards, merchant doesn't take cards, or very small transactions. Checks for those merchants and people that don't take cards and cash is not convenient.

Credit cards are cash-back of 1.5% and sometimes more. I also have airline cards and I use these cards to maintain the mile balances.

[AnalyticalEngine]

I'm a little surprised almost no one significantly uses cash. I guess all those news articles about the "death of cash" are correct. Not that I can talk because I mostly use a card (although I don't really do the sign up bonuses thing and just use the same card).