Cash vs Credit: Here’s everything you need to know | Edukasyon.ph
Grown-up Guide

Cash vs Credit: Here’s everything you need to know

So imagine you’re in a bookstore buying supplies for a class project. You were at the counter, ready to pay, when suddenly, you noticed the book that you need for another class on sale! So you check your wallet, excited and hopeful, but it turns out, you don’t have enough spare money to buy the book now. Frustrating, right?

Before drowning in despair of being #broke, you saw a signage that says “We accept credit cards”. However, with all the school fees and other expenses coming this semester, buying the book will surely not be on your list until your next allowance. So what do you do now? Should you use the credit card to purchase the book, or wait until you have saved enough cash? Much more frustrating, right?

If there’s one debate that has been going on for quite some time now, deciding whether you should use cash or credit card when buying things might have already bugged you a number of times already.

But did you know that learning the difference between these two will not just only guide you on how to spend appropriately, but more importantly, how to save money wisely? If you’re on the fence about which one to use on your next purchase, here’s a look at the two payment methods and when to use them:

Pros and Cons

Cash is a widely accepted mode of payment around the world –except in online transactions where you’ll need a card unless there’s a cash on delivery option. As you make your purchases with cash, you’ll see right away how your money is running out.


When you spend cash, you don’t have to worry about thefts and frauds lurking to steal your identity and financial information. In case the money from your wallet is lost or stolen, you won’t have to deal with the further stress of changing your pin codes, reporting the incident to your bank, or spending time on card replacement application.

However, carrying a large amount of money is not advisable either because once it’s lost or stolen, it can be extremely difficult to retrieve unless someone will find and return it. In case of credit card fraud, on the other hand, you can always report and block your card immediately to minimize any damage.

Interest and fees

When you use cash, you only have to pay for the cost of the item with no additional fees and it’s not subject to any interest rates. Since you pay right away, there’s no need to worry about the upcoming bills every month that goes with purchasing via credit.

Credit cards, however, have rewards and credit score system that can help you earn extra points, cash, or freebies you can use for your next purchase. But be wary as this rewards system can a bit tricky and can tempt you to spend more than what you should —so by all means, use your card responsibly.

Freedom from debt

Credit cards let you conveniently purchase items in times you don’t have enough cash but it comes with fees and interest rates. In order to avoid any issue with these fees, you need to pay on a definite schedule. Failing to settle your credit on time can incur further charges.

The best thing about cash though is that you learn to spend only by your means. While overspending can still happen, as long as you don’t borrow from others, you are free from other financial burdens like debts from creditors and interests.


Ever had a moment when you can’t recall where all your money had gone? Unless you’re ready to keep a bunch of receipts for inventory, tracking your expenses can be hard for cash payments unlike using credit cards where you can view all your transactions online. Credit cards also allow you to analyze your expenses through your monthly statement and keep an eye on any suspicious charges.

Application Process

Before you can have a credit card, you will be required to submit a number of requirements and undergo an approval process. These requirements include having a stable income, annual fees, money deposits (for secured cards), and a whole lot more.

Now that you know the basic advantages and disadvantages of using cash or credit, here are a number of situations when it’s best to use either one.

financial literacy

Young as you are, it’s important to know the ins and outs of finances so you can be on your way to a responsible adulthood. Want to learn more tips and guides on how to save wisely or managing your finances? Visit Edukasyon.ph’s College Life blog section now!


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Should you use cash, debit, or credit?“. Business Insider. Retrieved October 4, 2018.

What Banks Failed to Mention About Credit Card Fraud”. MoneyMax. Retrieved October 4, 2018.

3 Straightforward Ways For Filipinos To Get Their First Credit Card”. iMoney Philippines. Retrieved October 4, 2018.