8 Times It’s Better to Pay in Cash

When you’re tipping someone 

Some credit card readers are not built for distributing tips among staff fairly or correctly, said Ren Wu, co-founder of Maniology. If you’re stuck on how much or who to tip, follow this guide on how much to tip in every situation.

“You should pay with cash [when] you are tipping someone, for example, at a nail salon or a restaurant,” Wu said. “Giving the professional a cash tip directly will confirm that the tip ends up in his own hands and no one else’s, ensuring he receives the compensation he deserves for his service.” 

At small events

We’ve all been there: you’re in line at the Saturday morning farmers market to pay for those delicious-looking peaches. You get to the front of the line and they only take cash —but all you have is a credit or debit card. Looks like no peaches for you. Small events like farmers markets, fairs, festivals, and garage sales aren’t always equipped with credit card readers we’re so accustomed to.

“While many small, mobile vendors accept plastic these days, those attending fairs, festivals, and farmers markets should still use cash. Part of this is due to convenience. After all, in temporary vendor areas the power can go out, the WiFi can go down, and software can always be glitchy. Using cash will ensure you’re able to make the purchases you need to,” said Ian Atkins, chief financial analyst of FitSmallBusiness.com.

If you don’t have access to a cash app

Cash apps like Venmo and Zelle have made it increasingly easy to transfer funds among friends—and it shows, as Venmo has over 40 million users. But some folks don’t use these apps, or have access to them if they don’t have a smartphone. 

When there are store purchase minimums 

It’s the worst when you’re at a coffee shop to get your quick caffeine fix and realize there’s a credit card minimum, forcing you to pick up something extra, like a muffin, to reach it. Small purchases like this are just one of the times you should always pay cash. Plus, you save more money when you’re forced to see those bills disappear.

When you have a credit card that’s not accepted at most places

If you have a lesser-known credit card, it’s important to have a backup plan when your card isn’t accepted. Credit companies like Discover and American Express are less widely accepted than Visa and Mastercard, said Greg Mahnken, credit industry analyst at Credit Card Insider. Thinking of getting a specific card for perks? These are 7 credit card offers you should skip.

When you want a private transaction

Suppose you’re trying to discreetly buy a gift for a loved one—the last thing you want them to see is that transaction in an account statement. This is just an example of the 10 times you should never pay with a credit card. Cash is the miracle currency that keeps you a mystery.

“If you are very fussy about privacy (don’t want your bank to know where you are shopping, don’t want possible investigation by government, legal, or political rivals, etc.), there may be many purchases and purchasing habits you want to keep private even when the purchase itself is completely legal and moral,” said Dr. James Philpot, certified financial planner and associate professor of finance and general business at Missouri State University. 

When you don’t trust the vendor

Although credit cards protect against fraud, the hassles from such fraud and identity theft are still enough that prevention is the best cure, Dr. Philpot said. “There are developing countries where I travel to but do not trust the security of the vendors’ systems and procedures. Or, a vendor might seem ‘not right’ enough that you want to avoid a fraudulent charge from the vendor. Of course, it is generally best not to patronize vendors you do not trust, but sometimes there is no good alternative,” Dr. Philpot said.  

When the vendor offers a cash discount

Vendors pay credit card companies a fee of up to 3 percent for all credit card sales, Dr. Philpot said. And sometimes they’ll even offer a discount for cash. “I was traveling and wanted to do a ‘splash and go’ stop at a gas station. I prepaid the clerk three dollars to turn on the pump. He volunteered that he would authorize $3.09 because I paid cash,” she explained. Now that you know all the times it’s better to pay in cash, read on to find out the opposite: when it’s actually better to pay with a credit card.