by Isabelle Esteves

Created on: April 22, 2009   Last Updated: January 28, 2010

With the current economy it is becoming much more common for people to use cash. If you carry a balance on your credit card, you should always pay cash and never use your credit card. In the present economy the main goal of anyone who is carrying a balance on their credit card is to pay down the amount owed and get your balance to zero.This means that you have to train yourself to pay cash. This is a hard thing to do, oit means saying no to yourself when you want to buy something but don;t have the cash.

Paying cash can mean using your debit card, especially when you want to do something like renting a car, it is important to have a card to use. Be aware though when you use a debit card to rent a car, they will put a hold on your cash and you will not have access to it. The wisest thing to do in this case is to use your credit card to hold the reservation but when you return the car, place the payment on your debit card. This will allow you to have access to the full amount of money that you have in your bank account.

If, however you don't carry a balance on your credit card you should make sure that you have a card that offers you some perks for using it. These days there are many different options. You may get a card that gives you airline miles, hotel loyalty program points, credit toward the purchase of gasoline or even a car. These loyalty cards can be a great way to earn a free vacation or even cash back at the end of the year. The best of all are the cards that allow you to use your accumulated points for your choice of perks. This saves you from having to deal directly with the airlines for free flights, the credit card provides a booking service and no airlines are excluded.

If you have a loyalty card which offers you perks for free then you may want to use your credit card for all your expenses. You should never pay a yearly fee for any perks, there are way too many free cards.  Shop around, you will find a good deal.  You can use your card at the grocery store and the gas station. Many of your regular monthly expenses can be charged automatically to your credit card. Check with your utilities company, your cell phone provider and even your town to pay your property taxes with your credit card. If you are serious about your points you can even make charitable donations on your credit card.

Another benefit of using your credit card to pay all your expenses is that at the end of the year they can provide you with a detailed spending statement which can be very helpful in filing your tax return.

In conclusion, when should you use cash? When you carry a balance on your credit card. When should you use a credit card? When there are serious financial benefits to you for using it and when you can pay off your balance, each and every month. Paying interest, even for one month will nullify the benefits that you earn by using your credit card.

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