Facebook Twitter LinkedIn
Register for our daily updates!


Featured Advisor



Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

Click to see the full profile


Share |

It Cost $5 - Cash or Credit?

Using credit cards for even small purchases builds a credit rating, but cash is always going to be safer due to hacking concerns. 

| BY Kent McDill

Sometimes, consumers ponder the choice between paying with cash, a credit card or a debit card.

Each decision comes with consequences, including the use of cash, apparently.

A study done by Princeton Survey Research Associates for CreditCards.com shows that close to two-thirds of credit card holders use cash when buying something for less than $5.

However, the study reveals that Millennials aged between 18 and 29 are far less likely to use cash, and are more likely to use a debit card than people in other age groups. Whether it is debit or credit, the Millennials are far less likely to hand over paper money.

Among all consumers using a card to pay for an item costing less than $5, 22 percent use debit cards and 11 percent use credit cards. Among Millennials, the ratio is almost 3-to-1 in favor of debit cards, and 51 percent of Millennials use some form of card to pay for items under $5.

Even among people between the ages of 30 and 49, just over 50 percent would pay for a small item with cash, meaning nearly half are turning over a card for that pack of gum.

Among those over the age of 61, 82 percent would use cash for such a small purchase.

There is wisdom behind that decision in light of all the recent scandals regarding hacking and credit card information being stolen. But the use of a credit card establishes credit, and in many cases earns some form of payment back, where debit cards most often do not do either of those things.

Also, when debit card information is stolen, the cardholder is at greater risk than a credit card holder because there is a significant limit on a credit card holder’s liability in the case of a card being misused. 

“There certainly are some safety benefits to using cash because you don’t worry about someone running your cash through the skimmer,” said Creditcards.com senior industry analyst Matt Schulz. “(But) if your debit card information gets stolen, somebody can take real money out of your account that you won’t be able to use to make a car payment or a doctor’s bill. That money may be gone for a week or two.”ß 

Sometimes, consumers ponder the choice between paying with cash, a credit card or a debit card.

Each decision comes with consequences, including the use of cash, apparently.

A study done by Princeton Survey Research Associates for CreditCards.com shows that close to two-thirds of credit card holders use cash when buying something for less than $5.

However, the study reveals that Millennials aged between 18 and 29 are far less likely to use cash, and are more likely to use a debit card than people in other age groups. Whether it is debit or credit, the Millennials are far less likely to hand over paper money.

Among all consumers using a card to pay for an item costing less than $5, 22 percent use debit cards and 11 percent use credit cards. Among Millennials, the ratio is almost 3-to-1 in favor of debit cards, and 51 percent of Millennials use some form of card to pay for items under $5.

Even among people between the ages of 30 and 49, just over 50 percent would pay for a small item with cash, meaning nearly half are turning over a card for that pack of gum.

Among those over the age of 61, 82 percent would use cash for such a small purchase.

There is wisdom behind that decision in light of all the recent scandals regarding hacking and credit card information being stolen. But the use of a credit card establishes credit, and in many cases earns some form of payment back, where debit cards most often do not do either of those things.

Also, when debit card information is stolen, the cardholder is at greater risk than a credit card holder because there is a significant limit on a credit card holder’s liability in the case of a card being misused. 

“There certainly are some safety benefits to using cash because you don’t worry about someone running your cash through the skimmer,” said Creditcards.com senior industry analyst Matt Schulz. “(But) if your debit card information gets stolen, somebody can take real money out of your account that you won’t be able to use to make a car payment or a doctor’s bill. That money may be gone for a week or two.” 

 



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.