Dear everyday spender:

Cash, Credit… or debt? The difference between themWelcome to the modern world of payment choices.  To help you settle in, I’ve taken the liberty of creating a fictional narrative.  So, sit back and enjoy!

There are 3 characters: Johnny who only pays in cash, Jane transacts with her debit card exclusively, and Maurice; he utilizes a credit card as much as possible.

Johnny gets paid in cash – so his pockets are always full of loose change.  At the end of the day he dumps all the change into a jar at home.  Jane has direct deposit with her employer.  She typically uses her debit card and checks her bank statement online.

In the old days, conventional wisdom was: if you save your loose change (those quarters, pennies, nickels and dimes) for years and years, the volume of accumulation would seem significant.  Realistically, however, Johnny’s money is earning no interest, and worse yet: suffering from inflation, which will deplete the overall value.

For Jane, the debit card is a great way to budget; plus, avoid all that loose change.  But, other than learning good habits, and replacing the weight of cash, what is she earning?*

Meanwhile, Maurice’s card offers him security; every purchase is backed by a large bank that vouches for his responsibility.  This is a very important relationship: the bank’s trust in the consumer’s responsibility.  To keep things on the level, Maurice monitors his current statement.  If he notices an error, the bank will go to bat for him.  Monthly, he pays the statement balance in full, and on time, maintaining the relationship and trust he’s building.

It should be said: When a consumer uses their product, these large banks earn money; what’s called a “merchant fee” from each transaction.  And all too recently, many have become generous enough to profit-share with their cardholders. Better yet, these incentives, bonuses, cash back, points… they are all tax-free.

So, my friend and everyday spender, if you have good credit, why not be earning money from your everyday spending? Who doesn’t want extra money?

I invite you to read through this program… and start cashing in!

*Once upon a time, a certain bank offered a “Keep the Change” program, which they’d double after the first year. Super good – especially if the user made many small transactions.

Cash, Credit...  or debt?  The difference between them