by Stephen Poulitsis

Created on: August 29, 2010   Last Updated: March 24, 2011

It isn't entirely possible to live without cash but for the majority of purchases the credit card will do nicely. It gives cash back on every purchase made and even rewards with extra bonuses. It gives extended warranties on goods and insurance. Switch cards around for air travel to get the best number of air miles and extra benefits such as concierge service and fee car rental insurance. If you have the misfortune to be blown up on foreign shores your credit card insurance will fly your body home. If you travel light for business it can save you on travel insurance.

Having a number of credit cards makes most sense as you can use one for the cash backs, one for the air miles, and one to borrow money at 0%. There are colleagues who keep an additional card for expenditure they don’t want their other half to know about for whatever reason. One colleague does so just to keep surprises well hidden as his wife is high maintenance. He lets her think he spends more than he does on her gifts by hiding the evidence on his statement. Thousands of guys keep a second card hidden to keep a second woman hidden but use different billing addresses.

Handling credit in this manner is only recommended for those who can pay their balances in full and is no way advisable for those who can run out of control on spending. Anyone who pays interest should stick to cash as cash is interest free. Spendthrifts should hide their credit card in the deep freeze.

Cash has more advantages in foreign countries where bargaining is still a way of life and discounts can be obtained for cash. It also pays to use cash in restaurants to avoid skimmers, or anywhere they want to take your card out of sight. You lose the cash back but it’s better than losing your identity to fraudsters who often gravitate to businesses with high staff turnover.

Cash is needed in many areas which don’t accept credit or charge you more for the privilege. If you don’t have cash on you in some places you could well end up sleeping in your rental car. Always take cash when venturing outside foreign cities. Cash is better for tipping too as there is more chance of it going to the person you actually tip.

Credit does indeed work best most of the time but never go out cashless. If you can’t go out with a credit card without running into debt then only go out with cash until you get a grip on your spending.

There are obvious places where plastic just won’t do as a colleague discovered when he couldn’t get a taxi in London and hopped on a local bus. Plastic just wouldn't do and he ended up walking. His total reliance on credit left him late for his meeting which lost him an important contract. That resulted in him losing his job. Nowadays he only ever uses cash. The good thing is he's never in debt on his credit card.

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