Disadvantages of using cash for purchases

Category: Shopping


Strictly using cash for all of your spending can offer some advantages—it can make it easier to stick to your budget and keep you out of debt. But there are also disadvantages to consider as well. Even if you don’t have a debit or credit card, prepaid and secured credit cards can still offer some benefits that using cash cannot. When you just use cash for all of your purchases, you could miss out on the following:

Financial records

Keeping financial records for your purchases is a good way to track what you’ve spent, which can be good for a number of reasons, such as tax purposes and budgeting. If you use cash all the time, you have to manually keep track of where your money is going, which can take a lot of work and discipline. When using any type of card, however, these records are automatically created and stored for you. You can access this information at anytime, and it is often stored for months or years at a time.


The only warranty you’ll receive for your cash purchase is the initial warranty that comes with the product, plus any extended warranty you buy on your own. However, many credit card programs offer additional protection for their customers when it comes to large purchases, so it’s like getting an extended warranty at no extra cost.

Rewards, points, and other perks

A lot of credit card programs offer perks, such as cash back, rewards, and points that can be redeemed for free travel, dining, and merchandise. You may even be able to receive a percentage off your purchase—for example, if you’re shopping at a department store and use their credit card. But with a cash purchase, you miss out on these benefits.

Protection and convenience

It’s one thing if you’re carrying around a small amount of cash for daily expenses and purchases. For a large purchase, however, it’s not only inconvenient to carry a large amount of cash, but it can be unsafe. Once cash is lost or stolen, it is gone forever and there is nothing that can be done. Losing a significant amount of money this way can be financially devastating, but if you lose a credit card or debit card, you can just contact the bank and let them know what happened. Your credit cards will immediately be frozen and your money will be protected.

The opportunity to build credit

Credit cards have a bad reputation, but when used responsibly, they can be an easy way to build up your credit score. Good credit is imperative if you ever need to finance a big purchase, such as a home or a car. Using credit cards now and then for your purchases will give you the opportunity to build up your credit, whereas using cash only will do nothing to help it. If you’re worried about getting into debt, you can always opt for a low-limit secured credit card.


Do you need extra cash to take care of accumulating bills and expenses? If you’re receiving long-term payments from an annuity or structured settlement, Peachtree Financial Solutions can help. Contact us today to learn more about selling future payments for a lump sum of cash.


Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.

Tags: cash, credit, credit cards, Debit Cards, financial records, warranties

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