Cash vs Credit vs Debit

I temporarily lost my credit card over the weekend, which resulted in a short but intense panic. However, even had I lost it for good, it occurred to me how much better it is to lose a credit or debit card than cash.

Had I lost cash, it would probably have been gone for good. While there are kind souls out there who might try to return the money, how do you differentiate your bills from those that belong to other people? Other than knowing the individual serial numbers of every bill in your wallet (which, really, who would do that?), a $20 is a $20. I’ve heard of instances in which people were able to prove their loss by knowing the exact amount, but I’ll be honest, I have no idea how much cash is in my wallet at any given time. And that still depends on someone being exceptionally generous. I guarantee you there are more people who would just keep the money than those who would even attempt to return it.

Similar to losing the money, what happens if you get mugged? That cash is gone. Even if you report the crime to the police. Even if they manage to catch the mugger. Even if they still have the cash in their possession. What’s to say you’ll recover the money? How can law enforcement officers know you didn’t lie about how much was stolen?

Yet another possibility of losing money, a house fire would absolutely destroy paper bills. Insurance policies usually have a way to try to recover losses, but I doubt that includes cash money. Again, what insurance agent is just going to take your word for the amount of money you had stashed away? Like with numerous other maladies, the cash is gone.

Credit and debit cards have protection against these unfortunate circumstances. Fortunately, I knew that my card was within one of very few places, each of which were removed from the public. Even if I dropped my card in a parking lot or store, I could just call and cancel it as soon as I noticed its absence. Most credit card companies are willing to refund purchases made soon before and after a card is reported stolen.

Instead of just losing it, what if my card is stolen? Again, I’m not likely to be held responsible for any purchases made if I call in a reasonable time frame. Furthermore, any criminal who makes purchases on the card is going to be tracked down. Some may argue that the criminal could steal your identity, but credit card numbers can be easily changed with the help of the company. Some vendors like Visa are even allowing stores to update the card number automatically by pushing an update of some sort out. I don’t know the details, I just know it’s an awesome idea.

Even beyond the security benefits of credit and debit cards over cash, a statement can serve as a record of transactions. I have a notoriously bad memory, and I forget transactions soon after I make them. Unless I keep receipts, I may have no idea how much I spent, and where. Fortunately, I can look at my credit card statements and see exactly what I spent, often as far back as the entire time I’ve had a card.

Additionally, I keep an alternate card to make purchases in the event that my main credit card is unavailable. Nobody keeps alternate stores of cash, at least not in the same vein. I keep a backup $20 stored in a hidden flap of my wallet, but I don’t keep a backup wallet with any sort of significant amount of money in it. I could have gone several days or weeks without finding my card or receiving a replacement, and I still wouldn’t have been significantly inconvenienced.

Obviously, I am a big fan of credit or debit cards over cash money. People who insist on using exclusively or mainly cash puzzle me. I’d be more than willing to try and understand the logic, but nobody has yet given me a convincing argument as to why cash might be the superior option. In any case, I’ll hold onto my credit card a little tighter next time, but I still won’t sweat it too bad if I do happen to misplace it.

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