Methods of Payment

Methods of Payment

There are generally three methods of payments, those being cash, debit card and credit card. It can be tough in deciding the best methods of payment but it mainly depends on your needs.



You need to take into consideration your spending habits and how well you keep track of your finance.

Cash is not always the best of the methods of payment as debit and credit can prove better depending on the situation.

Cash could be unsafe to carry, you may want to build a credit score or just keep a better track on your spending.

The methods of payment come down to you and what is best. Here is a look at all three methods of payment so you can decide.

Cash

Having cash on hand can be a great way to keep from over spending. You can decide how much cash you want to spend and only have this on you. Once the cash has run out so has the spending.

However for some having cash on hand increases the temptation for spending that they did not plan for.

The one flaw with cash is that it could be stolen or you could lose it. Cash is not insured so when it’s gone, it’s gone. Debit and credit cards are protected in the case of theft and loss.

Debit Card

Debit cards are accepted by many merchants as they will have machines like those from SureSwipe, so they are able to process them, which make purchasing easy.

Debit cards also have an easy record keeping so you can always keep track.

With debit cards the money comes out of your personal checking account, so you can only use the funds that are in there.

You then have to know what is in your account so that your card isn’t declined or you incur an overdraft fee. This then forces you to know your finances and what you have and don’t have as well as how much you can spend.

You need to know and understand your debit cards security. There are some that have similar protection to a credit card. If your debit card is lost or stolen, you will need to report it so that fraud can be stopped and you are not liable for purchases you didn’t make.

Credit Card

A credit card is the best way to create and build your credit score as long as you use it responsibly.

You can use your credit card to make purchases, but you need to be aware of the repayments and interest.

Each month you are required to pay a minimum repayment on your outstanding balance. Interest is charged on any remaining balance at the end of the month.

The interest can be reduced by paying more than the minimum or you can avoid interest by paying the full balance off each month.

Rewards programs and credit cards seem to go together nowadays. You are able to earn points that can be exchanged for items or travel. There are also cash back programs, which give you a certain percentage of money back for each purchase that is made using the credit card.

If your aim is to improve or build your credit score then you need to be careful with how much you spend and also make timely repayments each month. It is a good idea to rather make small purchases at the beginning with your credit card and pay them off in full each month, so that you can start a good credit history.

Credit cards offer a certain protection on items bought.

The best thing to do is to read all the terms and conditions before you sign up for a credit card and sees if it’s the right choice for you.

There are no best methods of payment as each differs and some will find one better than the other.
You may find that a combination is best. It all comes down to your individual circumstances.

It is best to consider the benefits of each of the methods of payments before you buy, so you can keep track of your money better.