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Exploring the Cash vs. Card Clash

Settling the paper vs. plastic debate

Part 9 | Reading Time: 3 minutes
By Ian Bin
Have you ever heard someone say, “Just Venmo me instead”? These days, cash is becoming more of a relic with the rise of Venmo, Paypal, and credit cards. People are starting to feel that carrying cash is less important now. But what’s better for you, to take some money or to use a card? That is what we are going to cover today. We will tackle the classic debate between having cash in our wallets and those ever-present plastic cards. It’s time to weigh the pros and cons in this cash vs. card clash.


Having cold, hard cash in your hand feels like a tangible budget. It can show you what you have, and it’s harder to part with those bills compared to swiping a card. Studies have shown that people spend less when using cash.1 It’s like the money is more “real” when it’s in a physical form, making you more cautious about parting with it. A study found that the human brain perceives paying with cash as a significantly more impactful action than payment by card or smartphone, which leads to a higher negative perception of paying through cash.2
financial advisor in your pocket home screen
When you pay with your card, the total amount you spend is what the place charges you. When using money, you know there isn’t a hidden transaction fee.
There is a risk of theft while carrying cash. Carrying a small amount of money is ok, but if your cash is stolen or lost, the chances of recovering it are extremely low. There is also a chance of retailers not accepting cash. Certain types of purchases won’t allow money on hand, like hotels, airlines, and even some stores, and then you are out of luck if you only have cash. Cash is also only practical for some situations. When you need a significant sum of money for things like car repairs or medical bills, it is unrealistic and risky to carry thousands of dollars in your wallet.


The sheer convenience of cards is hard to beat. Swipe, dip, done. No need to carry a wallet full of cash. Cards are also safer in some situations. If your wallet gets lost or stolen, you can report it to your card carrier and avoid any losses to your account. Also, many credit cards will offer rewards and cashback for making weekly purchases on that card. Some credit cards will help you to protect a significant purchase, as card issuers may offer purchase protection and an extended warranty for items bought with the card.3
Here’s the sneaky part – those plastic cards can lead us to spend more. It was found that people spend more when using credit cards than cash.1 The psychological disconnect of swiping a card doesn’t register the same way as physically handing over cash.2 The most obvious drawback of using a credit card is paying interest. Credit cards tend to have interest rates.
financial advisor in your pocket home screen
If you don’t pay back what you used by the end of the month, they will charge you an additional fee, which can drag you deeper and deeper into debt if you’re not careful. If you pay your balance in full every month, you won’t pay interest at all.

There's never a singular path

So, where do you stand in this cash vs. cards showdown? The truth is that there is a balance. Just like most of our blogs, there is never a singular path. Use money when you need to budget strictly and use cards at certain convenient moments. There are benefits and drawbacks to each side. At the end of the day, it’s all about finding what works for you.


1 Hurd, Erin, and Lindsay Konsko. “Credit Cards Can Make You Spend More, but It’s Not the Full Story.” NerdWallet, Accessed 16 Aug. 2023.
2 Ceravolo, Maria Gabriella, et al. “Cash, Card or Smartphone: The Neural Correlates of Payment Methods.”  Frontiers in Neuroscience, vol. 13, 2019,
3 Shon, Stella. “Credit Card Purchase Protection Explained.”  ValuePenguin, Accessed 16 Aug. 2023.

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