How often have you heard about a credit card fraud? People freak out over using credit and debit cards. Many consider cash to be safer and convenient. Cash is considered safer because of anonymity. However, the same anonymity makes it a risk. If cash is lost or stolen, there is no way to retrieve it. If you lose your debit or credit card, all you need to do is pick up the phone and report the same. You can also freeze the card, and you will not be held liable for unauthorized transactions so long as you have reported them to the issuer.

Convenience
With credit cards, you enjoy a higher spending power since you are not carrying cash. There is a higher credit limit when making purchases through a credit card because it allows you to buy now and pay later. When it comes to cash purchases, you need to pay for them immediately. You do not have to pay interest on such purchases; however, If you manage to repay the balance in full before the end of the grace period, you do not have to pay interest on credit card usage as well.

Increased purchasing power
With cash, your purchasing power is limited to the amount you are carrying, while with credit cards, you have additional purchasing power and can spend more.

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Higher level of security
In the event of an identity theft, your liability remains limited. If you have lost your card, you need to report it to the issuer. He or she will freeze the account and replace the card at no cost to you. Moreover, you enjoy protection from fraud in case of a credit card; this is not the case with cash. If you lose your cash, it is gone forever.

Rewards
The biggest benefit of credit cards is the rewards you can earn. You can earn while you spend. Reward programs allow you to earn hotel stays, cashback, and miles, which you can use in the future. Reward programs are also available on cash purchases, but they are retailer specific.

Building Good Credit
Using a credit card in a disciplined manner helps you build a good credit score. However, financial discipline cannot be overemphasized in this case.

Credit cards are easier to use and help you build strong credit, while cash does not. Although credit cards have their own pros, you should use them wisely and make rational financial decisions to make the most of the pros. You need to consider your financial condition before choosing credit cards over cash. Ultimately, it is your choice and depends on the risk you want to take while managing your finances and ensuring they are at their best.

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