Money Saver India
Five reasons to stop using cash

Five reasons to stop using cash

You can’t go completely without cash, but all of us can cut down. It doesn’t get more pocket-friendly than plastic if it's used right. Just think how much you’d earn in reward points alone!

We’re so used to hard cash that it seems completely ridiculous not to have it at all times and often in large amounts. But so was going paperless about 15 years ago. We haven’t gone paperless yet, and we probably won’t be completely cashless 15 years from now, but it’s time to make the switch. It can earn and save you money in a variety of ways. Here’s how:

Reward points When you pay cash, you’re not exactly getting your money’s worth. It makes much more sense to pay for whatever you can with your card/s, just for the reward points. You already have a debit card, if not also the credit card, so you’re paying the annual charges. So why not exercise the benefit as well? Debt and credit cards offer good value when you make a purchase. You get cash back on purchases, won’t have to pay the annoying surcharge when you buy fuel and can even exchange reward points for vouchers at various departmental stores. Even the most basic debit cards offer big discounts, so you can imagine how good credit cards can be. For example, with the Citibank Rewards Card, which has no annual fee provided you use it to make purchases over Rs30,000, you earn 10 reward points for every Rs125 you spend at all apparel and departmental stores.

No loss Not that you can go without any money in your wallet, but going without big bills should make you feel safe about your wallet. The moment you learn your wallet is missing, you can call up your bank or credit card provider and simply block your cards. With cash, the moment you lose your wallet, it’s all gone. Cards, both debit and credit, also offer insurance on items purchased with it. With the HDFC Platinum Debit Card, for example, any purchase made with the card is insured for up to Rs50,000 for six months. All you need to do to avail of this is to inform the company that you’ve made a purchase and declare the value of the item. While this is less common with debit cards, nearly all credit cards offer this facility.

Analyse spending Have you ever withdrawn say, Rs5,000, and tried to keep track of where you’ve spent your money? It happens a lot, doesn’t it? Well, if you were to make most of your purchases – including your mobile phone bill, fuel purchases and food – you could keep track of your spending by simply looking at your bill statements. In fact, with a smartphone, you could even simply look at the alert trail from your bank to see where you’ve spent your money.

Bonus points When you’re out with friends, do you pay your share of the bill in cash? That’s not the way to do it. If your bill at a restaurant, for example, works out to Rs3,000 between five people, your total is just Rs600, but you’d be earning reward points on the entire amount by paying cash. If your credit card earns five points per Rs100, as the SBI Gold card does, you’d earn 150 points right there. This method would also save you the trouble of going to the ATM the next time you need money, as you’d also be collecting Rs2,400 from all your friends on that occasion. Be sure to collect the money you’re owed, however, or this trick might not work out as planned.

Forgotten offers Often, we’re not looking at the discounts we’re offered by our card provider. Banks don’t keep us informed about every new discount available on their cards. It’s quite possible that your debit or credit card will entitle you to a discount at the exact place you plan on going to over the weekend. If you have an HDFC Debit Card, for example, you’re entitled to a free latte on a bill of just Rs150 at any Café Coffee Day in the country if you pay by card. If you have an Axis Bank debit card and are opting to pay in cash right now on, pay by card instead and you’ll get a Rs1,000 discount. Both these offers are on debit cards; you could probably imagine the discounts you’re missing out on by paying cash instead of using a credit card.

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