12 Times Paying with Cash Is a Big Mistake

You’ve heard that cash is king, but not always. Sometimes there's a case for using cash, like tipping the doorman a few dollars.

But most times, you want a record of your purchases. Especially when credit card transactions often double as receipts. The computer-logged transactions are like epitaphs, memorializing every impromptu shopping spree.

Whether using a cash back credit card , check, or other non-cash method, here are 12 things you should never pay for with cash.

1. Business purchases

For work-related purchases, you need a paper trail. Paying by credit card ensures you have a record — critical for your business or your work’s accounting department. Plus, you can take advantage of cash back and other perks with business rewards credit cards.

2. Electronics

Purchasing a television or other electronics on a credit card can come with great perks, including interest-free financing, cashback rewards, and extended warranty benefits. Some credit cards offer additional protection to extend the claim period or coverage limit.

3. Travel purchases

Airfare, hotels, and travel expenses are best paid for with a credit card, particularly travel credit cards , as they can pay outstanding points, miles, or cashback rewards. Strategic card users can regularly bank enough points or miles to score free trips.

Many credit cards provide coverage for trip cancellation, interruption, illness, injury, or lost luggage. Plus, you can report a card lost or stolen and get a replacement — without being on the hook for fraudulent charges. With cash, it’s gone for good.

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4. Auto repairs

Paying the mechanic with a credit card can be a smart move that offers protection if you discover the service work wasn’t properly done. Many cards offer purchase protection on car repair work.

5. Home repairs

Similar to car repairs, putting home repairs or renovations on a credit card can offer you additional protection. If you encounter any issues with the contractor’s work, you can dispute the charges.

6. Event tickets

Many finance experts believe you should always purchase concerts, sports, or other event tickets with a credit card.

Increasingly, fraudulent sellers are peddling fake tickets and bilking consumers out of big bucks. Credit card companies offer consumer protection so you can recover those stolen funds.

Credit cards may offer you coverage in the event a show is canceled or postponed, and some even provide black-tie concierge perks, like access to presale tickets and first dibs on popular shows.

7. Car rental

Your next car rental is another smart purchase to put on your card. Many car rental agencies even require it, so they’re protected (they know your card is good for it) if you damage the vehicle.

A credit card protects you, too, often by offering additional insurance coverage, including protection for collision or theft.

8. Groceries

Putting groceries on your credit card can help you score great cashback rewards, with many cards offering up to 5% cash back for this category. It’s also an easy way to track your grocery spending month-over-month.

9. Rent

While you usually can’t pay your rent on a credit card without racking up some hefty fees, paying the rent in cash is a bad idea. You want proof of payment. Instead of cash, pay by check, Venmo, or some other traceable method.

There are, however, some online payment services you can use to pay your rent (among other bills) via credit card, which can help you earn rewards and gain flexibility in managing your finances.

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10. Utility bills

Using a credit card to pay your utility bills can be a smart way to put some of your finances on autopilot and turn a routine bill into another opportunity to earn cashback rewards.

Setting up bills on autopay means there will be no disruption to your services. Just make sure to check your statements each month to look for any unusual charges or spikes in usage.

11. Monthly subscriptions

Like your electric bill and other utilities, paying your monthly subscriptions with a credit card can ensure uninterrupted service and great credit card rewards. Some cards are even designed to offer rewards for streaming services, meal kits, and other monthly subscriptions.

12. Restaurants

Dining out, or ordering takeout, is another spend category to put on your credit card. Many rewards credit cards offer double or triple rewards, or even more, for charging restaurant purchases.

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Bottom line

Cash isn’t always so convenient. Many of us never keep it on hand anymore. While sometimes cash is the best payment method, credit cards generally offer you more security, better record-keeping, and points or perks so you can earn rewards for your everyday spending.

And even if you love paying with crisp green bills, keep in mind that businesses are increasingly going cash-free and will only accept digital or electronic payment. So prepare yourself financially , and take along a credit card just in case.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).