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Your Money, Your Life: Choosing cash, credit or debit for shopping
Dec 01, 2013 | 2943 views | 0 0 comments | 13 13 recommendations | email to a friend | print

By Don Milne

Financial Literacy Manager, Zions Bank

This month is a favorite time of the year for retailers because of all the extra spending people do for the holidays. When the classic holiday movie “It’s a Wonderful Life” was made in 1946, the only way to buy things was with cash.  Now, six decades later, you can still use cash, but you’re more likely to use a debit card or credit card. What are the advantages and disadvantages to each?

1. Cash. The big advantage of spending cash is that you won’t overspend. Obviously, if your cash is lost or stolen, there is a big chance you won’t get it back. Remember what happened in “It’s A Wonderful Life” when George Bailey’s Uncle Billy lost his cash? If you choose this form of payment, don’t take out all of your money at once, only what you plan to use each day. This is a great method for paying for stocking stuffers. Because these items are usually not very expensive individually, you may spend more than you want if you don’t use cash.

2. Checks. Some stores no longer accept checks because of the risk of fraud or bounced checks. If you plan to use checks, be prepared to do so wisely by tracking each check with your check register and matching it to your bank records so everything is in balance. A bounced check will not make the season merry.

3. Debit Cards. You can use these anywhere credit cards are accepted, but unlike a credit card which you pay back later, the money is taken out of your checking account now. Using this method could help you from spending more than you have in your checking account. If the card is lost, you can contact your financial institution immediately to stop someone else from using it. 

Check with the card issuer to see your exposure to loss. One downside is you can still spend more than you planned if you have overdraft protection or a check reserve line of credit. Make sure you are aware of your expenses and current balance to help prevent overspending.

1. Credit Cards. These are convenient, and you don’t have to worry whether you have enough money in the bank at the time of purchase to pay for what you buy;  however, you have to be careful not to overspend. 

You should realize that all credit cards are different and you should find one that fits your spending habits. Some cards offer you reward points while others offer cash back.  Zions Bank offers both AmaZing RewardsЁ or AmaZingЄ cash back cards; subject to credit approval. 

To encourage shopping at local businesses in Davis County and elsewhere, Zions Bank also offers an additional program for credit cards and debit cards that are set up to give you discounts of ten, twenty, or even fifty percent cash back at participating merchants, leaving you with more money for holiday shopping.  See for terms and conditions.

Another advantage of credit cards is that if they are lost, you have protection from losses if you report the loss right away.  Of course, if you get too much of the shopping spirit, you could be out a lot of money from buying stuff you may have left on the shelves if you had used a different payment method. If you don’t pay your credit card off in full each month, you will be paying interest on all those great deals you bought, making them less of a deal.

2. Prepaid Debit Cards. These are the newest form of payment.  For a fee, you load the card with money and use it anywhere you can use debit or credit cards. You can reload the card with more funds later. You don’t need to have a checking account to get one of these cards.  

You can only spend up to the amount you load on the card so it can help you prevent overspending. The fee and your protection from loss if stolen depends on the card issuer, so read the terms first to find out if you are OK with your possible exposure to loss.

Have a safe and enjoyable time this holiday season regardless of what method you use to spend your money.


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