16 Payments You Should Always Make With Cash 

Sam Mire

Ladies and gentlemen, the cashless society is nigh. Having recently had my cash rejected at a professional hockey game, the signs of cash's demise could not be clearer. You have surely read the headlines and seen the social media videos about the death of cash, but it's not here quite yet.

While we still have the option, there are several payments you should make in Jacksons, Lincolns, and Benjamins. While you won't get points or travel miles by making cash payments for these items and services, there are even greater benefits in avoiding using plastic. 

1. Dining Out

Dining Out
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How much easier is it to order the extra serving of mozzarella sticks when you don't have to hand over cold hard cash when the bill comes due? Much easier, it turns out.

Financial advisors note average American households spend as much as $1,000 per month letting others prepare their meals. Reducing meals outside the home is one of the most common prescriptions for out-of-control finances. If you only pay for dinners using cash, you may be far more likely to eat those groceries, wasting away in your fridge.

2. Your Vehicle

Renting car
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Vehicle debt is one of Americans' most glaring liabilities. The total sum of outstanding auto loan balances hit $1.6 trillion in Q4 2023, and individual monthly payments for Jeep Cherokees have reached albatross levels.

Paying for the vehicle outright is the surest way to avoid crushing car debt. Don't convince yourself, “You'll pay the loan off before interest begins strangling you.” Pay upfront, or don't buy the Jeep Cherokee.  

3. Overseas Purchases

Traveler giving toast with local man
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“I can use my credit card in Thailand” does not mean “I can use my credit card in Thailand without exorbitant foreign transaction fees.” 

When overseas, you had better know your card's terms and conditions, such as your Social Security number. If you have any questions about whether you could face additional fees for swiping plastic outside the country, it's best to use cash. Even if you know the policy, using cash can spare surprises on the following month's statement.

4. Items You Might Need to Return

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Paying cash is your best bet if you need to buy clothing or other items with a significant chance of returning them to the store. 

Credit card companies can make it difficult for you to get a refund on returned items. At the least, you'll likely have to wait a few days for your account to be credited for returned items. If you want your money back the moment you return the items, paying with cash presents the best odds of getting cash back. 

5. Your Tax Payments

Couples discussing tax
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Generally, it's wise to pay for large-sum purchases in cash. While your taxes aren't a “purchase,” they are a financial obligation. If you make a habit of paying Uncle Sam with a credit card, there's a high likelihood you'll pay substantial interest due to the large balance you incur on your AmEx.

A debit card counts as cash for this expenditure, as the primary concern is avoiding the added credit card interest tax. 

6. Small Impulse Purchases

Woman buying sports apparel
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Those who go deep into debt don't generally realize the role trinkets play in their financial woes. Whether it's a Snickers bar, cute ceramic bowl, or any other item that falls outside the “essentials” category, paying in cash will help you realize the actual cost of your impulses.

Running out of cash is a wake-up call that you've been spending frivolously. Using plastic does not provide such a concrete backstop.

7. Sketchy Secondhand Purchases

Does buying a car help your credit

That stranger selling their road bike or used Playstation seems honest enough – from your two online conversations. However, sending money online has risks, including identity theft and fraud. 

It's generally wise to pay for questionable online purchases in cash when you can. This is the lowest-risk form of payment in a category of purchases rife with risk. 

8. When Vendors Can't Accept Cards

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This is an example of the importance of always keeping cash on hand. Whether due to technical difficulties, a business's preference, or a nationwide power outage (hey, crazier things have happened), there are some purchases you'll be only able to make with physical money. 

As more people rely solely on plastic, be the maverick always ready for an emergency (or a cash-only business).

9. Hair Cuts

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Your barber or stylist is, in many cases, operating on relatively thin margins. Though they might accept credit cards, either you or the service provider are eating a fee. 

Do your small service providers a favor and pay with cash when possible. You'll save them or yourself a 3% service fee, which is good for your financial situation and karmic repository.

10. Your College Tuition

college station texas
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At the time, working at the local pizza spot to pay for college was feasible and common. How times have changed. American students borrowed about $13 billion in private student loans in 2021-22, and they will regret that decision very soon.

Even well-to-do families often take out student loans, assuming a lucrative career will help pay them back quickly. We know that's not the case for most, and interest has proven an insurmountable burden. If you can pay tuition in cash, do it every time.  

11. Gasoline

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credit: depositphotos

Paying with credit cards is a time-tested way of falling into financial arrears. With a purchase you make as frequently as gas, the credit card bills can rise more quickly than the cost per gallon in California. 

When you use a debit card or pay cash for gas, you may take fewer unnecessary trips, keep better track of your expenses, and be less inclined to buy those Red Bulls and Gardetto's when you walk into the station.

12. Produce

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This applies specifically to those who procure their watermelon and zucchini from local markets, which is the surest way to find fresh, non-GMO, pesticide-minimal fruits and veggies (if you're into that).

Many of these vendors accept cash only. Even if they do offer card-swiping, someone typically absorbs a fee when you pay with plastic. Support local farmers by paying cash.

13. Furniture

Man fixing furniture
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This was news to me (even as a noted La-Z-Boy), but apparently furniture sellers are amenable to haggling

These stores often discount their wares to move them off the showroom floor (every inch of display space counts!). Whenever you negotiate, you must utilize every drop of leverage. The prospect of paying in greenbacks may appeal to sellers looking to avoid fees or, who knows, even keep the sale off the books. 

14. Electronics

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Americans have habitually accepted debt for certain purchases, including vehicles and cell phones. In these cases, you generally pay some added interest unless you purchase the items outright. 

If you can afford to buy the next iPhone with cash or a debit card, do so. Financing a smartphone (a depreciating asset) via a credit card or a financing program is a losing bet.

15. Gifts

Friends with gift
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We all feel pressured to splurge on Christmas and birthday gifts for loved ones. However, incurring debt (usually via credit card purchases) in the name of generosity should never be acceptable.

Many financial advisors say you should only give gifts once you're out of debt. Therefore, if you can't afford to buy a gift in cash without covering your other bills, you probably shouldn't be buying the gift at all.

16. Vacations

Woman taking vacation
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As anyone who has lived to tell the tale of the Magic Kingdom can attest, vacation spending has a way of spiraling out of control. Pack plenty of cash when packing sunscreen and bucket hats for your next vacation.

Embrace every available safeguard to thwart vacation splurging. Cash is one of the most proven safeguards to track your spending in real-time.

There you have it – over a dozen places where using cash will keep you ahead! Although the sun is setting on our favorite paper bills, cash still has a place for the budget-savvy, frugal Americans. 

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Could you use a couple of thousand dollars in your bank account to pay bills or build a nest egg? Most would say yes. Saving that kind of money may seem daunting, but it’s easier than you realize. You probably spend money each day on things that are nice to have but that you don’t need. It may seem like a few dollars here and there, but those dollars add up over time. Reducing or cutting these things out of your budget quickly adds to big savings.

16 Things to Cut From Your Budget To Help You Save a Couple Thousand

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Budgeting
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Now and again, we find ourselves discovering a useless product in our homes—an item we once believed would transform our cleaning or cooking habits from subpar to superstar. Lots of these items existed in the infamous “As Seen on TV” commercials, promising to add joy and ease into lives overflowing with mess. As these items and other random household belongings pile into the pantries, taking up crucial space, we wonder, do we need to spend this much money on nonessential items?

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2 thoughts on “16 Payments You Should Always Make With Cash ”

  1. This is great advise for people who are prone to spend beyond their means. But better advise for them is to forgo most of those purchases entirely.

    When vendors can’t accept cash or the seller is not part of an established company, I will always use cash. Likewise if the vendor wants to charge me a “convenience” fee or offers a discount of more than 2% for using cash. Other than that, I always use a credit card.

    I use a credit card for most purchases because I get points, miles, or cash back from my credit cards. I never charge more than I can cover with cash when the next payment is due and I always pay on or before the due date. I haven’t paid a penny in interest for decades.

    For me, the benefit of using credit cards is a credit score of 845 and an approximate 2% to 3% discount on most things I buy. The lesson to learn here is to not buy things you don’t need and/or can’t afford.

    Reply
    • I rarely use cash as well, and as you say it is good for people that have issues with spending. I have known many people that have also gone through Dave Ramsey courses they do not use credit cards at all. That’s not me, like you I use credit cards racking up points and miles so I can go and travel more. Not everyone has their financial household altogether so it is helpful to give them ways to minimize overspending.

      Reply

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