Equifax Lists Pros and Cons for Living a Cash-Only Lifestyle

June 17, 2014

cash versus creditWith so many online retailers reporting data breaches, many consumers are choosing to live a cash-only lifestyle in order to protect their personal information. Using cash as your main form of payment can also encourage you to spend less, which is good for your financial health. According to a recent study by business professors at MIT, customers are willing to pay more for items when they’re using a credit card instead of cash.

However, living a cash-only lifestyle isn’t always possible and it’s not the perfect solution to solving identity theft problems. In the recent article

“Cash or Credit? The Risks and Benefits of a Cash-Only Lifestyle,” the experts at the Equifax Finance Blog listed several of the pros and cons of using cash.

Cons of living a cash-only lifestyle include:

  • Withdrawal Fees: If you need cash and have to withdraw money out of an ATM that isn’t affiliated with your bank, you could face fees. For example, paying a $2.50 fee to withdraw $20 is the equivalent of paying 12.5 percent interest.
  • Lost Cash: While you can also lose your credit card, you can always order a new one to replace it, usually at no charge. Unfortunately, if you lose cash, you’re out the money with no way to replace it.

Pros of living a cash-only lifestyle include:

  • You can’t spend money you don’t have. When you’re not purchasing things on credit, it’s impossible to spend more money than what you actually have.
  • You may be more mindful of your spending. If you tend to make unnecessary purchases or feel that you have a spending problem, switching your card for cash can help curb the urge to splurge. Breaking a large bill usually makes you think about a purchase much more than you do when swiping your card.

To see more pros and cons of living a cash-only lifestyle, read the entire story. You can also visit the Equifax Finance Blog for more information on retirement, personal credit, home loans and more.


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