• Freya

Credit, debit, or cash?

What's your preferred method of paying? Do you swear by the trusted debit card, do you enjoy benefits of credit cards, or are you an ambassador for cash envelopes? I've always associated credit with debt, however, the online money community has opened my eyes to the pros and cons of different methods of managing spending money. Let's go through our options and compare.

Credit card

YouTuber Graham Stephan praising credit cards and all the benefits he gets from them. He's money philosophy is more about making money rather than white-knuckling saving money, which I think explains his preference for credit cards. There are three main benefits with credit card: you have insurance as the money taken from your credit card is actually not your money; you improve your credit score when paying your credit card bill; you can reap various 'rewards' such as cash points you can use at airlines etc.

Verdict: For those feeling confident in paying off their credit card bill in full every single month, a credit card might be worth considering. Shop around for a credit card that offers benefits that are of actual value to you, and be very wary of avoiding late payments and interest added!

Debit card

'Money-guru' Dave Ramsey is advising his millions of followers to avoid credit cards like the plague and promotes the trusted debit card. It is safe and easy, and except overdraft, there's no risk of getting in trouble like there is with a credit card. A debit card is the low maintenance option and you can't really go wrong with this.

Verdict: If safety and control is important to you, a debit card is probably the best solution. You can see the money in your account - this money is yours to spend! Also here, you should shop around as some banks are offering loyalty rewards for using their product as your main bank, it might not be anything major, but it adds up over time.


Cash envelopes keep growing in popularity, especially for those focusing on saving money. I first came across this concept in an interview with The Budget Mom, who is a strong ambassador. With cash envelopes, you simply withdraw money once you get paid, and divide the cash into different envelopes representing different budget posts; say one envelope is labelled 'restaurants' and another 'wellbeing', et cetera. This makes it easy to see how much you have left to spend on each category until next payday. The idea is that handing over cash for your goods will lower your spending as you have to physically part with your money.

Verdict: It probably takes a bit of time to "set up", but I believe this technique helps a lot of people especially of mindless spending is one of their challenges. Personally, I would not consider this method because I like spreadsheets and numbers, and I am too forgetful to remember to bring the correct envelopes which seem like a bit of a mess.

Which method do you use?

We are not certified financial advisers! The articles and information made available on Zero Time to Waste are provided for information and educational purposes only and do not constitute financial advice. You are advised to consult with an independent financial advisor for advice on your specific circumstances.

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