Don’t pay for these items with cash

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Paper money, or plastic?

Cash remains king in America, despite credit and debit cards, mobile wallets like Apple Pay and peer-to-peer money transfer apps like Venmo providing more payment options than ever. In fact, about a quarter (24 percent) of Americans still use cash for all day-to-day purchases, making it the most-used payment method, according to the Global Cash Index. Americans dropped more than $2.3 trillion in cash in 2015 and about two-thirds prefer using cash for anything $10 or less.

Discover’s summer travel survey released Mondayalso found that the youngest vacationers are the most likely to use cash. More than one-third (35 percent) of Gen Zers (ages 18 to 21 in this report) pay in cash while away, compared to just over a quarter of Millennials and Gen Xers. “I’m certain that age is a big factor here, since many in their teens and early 20s may not have a credit card yet,” suggested Emina Dautovic, Discover’s senior marketing manager.

But once you get a credit card (or two), when and where should you use them? While research shows people often spend less when paying with cash versus credit, financial experts told Moneyish that using cash for travel expenses and big-ticket items can cost you big time in liability and lost rewards. So Kim Palmer, credit card expert at Nerd Wallet and Greg McBride, chief financial analyst at Bank rate, break down when to pay cash and when to swipe your card.

Cash

Pros:

Bills are accepted almost anywhere
Especially small business, which will appreciate cash over credit because it saves them on processing fees from running your card. So if you’re frequenting a local coffee shop for your morning joe or lunchtime sammie, pay them in cash. When traveling, local artisans and smaller vendors may only take cash.

It keeps you on budget
Research shows people spend more money up to 83 percent more in some cases when they mindlessly swipe credit and debit cards than they do when parting directly with their hard-earned cash. “If you struggle to stick to a budget, or you feel tempted to overspend, then it can be useful to use cash instead,” said Palmer. “If you can only afford to spend $50 grocery shopping, just bring that with you and you don’t run the risk of overdrawing your bank account or going over budget.”

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