Deep Dive

Cash vs credit: a debate for the ages

Emma Nunes-Vaz
January 16, 2024

In our post-covid society, cash seems as ancient as flip phones, yet it still has a place in our increasingly digital world. According to the Bank of England, one in five still consider cash to be their preferred payment method and use it day to day. Cash also remains to be extremely popular while travelling.  In comparison, research by revealed that in 2022 alone, people have borrowed over £2 billion in credit and that credit forms a critical part of people’s financial lives. So it’s clear that both methods have a firm place in modern life.

When it comes to usage, there are a multitude of reasons why one might choose one over another, some are psychological and others physical. Today we dive into our take on the cases for each option.

The case for cash

Utilising cash can discourage excessive spending as for some it creates a sense of loss or pain that discourages them from purchasing the unnecessary item entirely. Alternatively, the emotions created during this transaction mean that purchasing an item with cash forces the individual to wait and make the purchase until they have enough money, creating a heightened sense of fulfilment as they’ve worked towards the purchase. What this means for the impulsive buyers out there (myself included) is that we have to be patient and save up the money, then reward ourselves later instead of making unnecessary purchases that we would otherwise commit to when using credit cards.

According to, it has been recorded that half of UK households rely on credit to purchase essential everyday items. This is why, when used well, credit cards have their benefits and as a result have such a big place in daily life. The sense of immediate gratification that credit provides people with enables them to make purchases instantly, no savings necessary, therefore, allowing them to worry about the consequences of repaying it later. However, some might argue that when credit is not managed well, it can be extremely costly to one’s financial health. The sense of detachment utilising credit creates for some people could be the reason as it may not feel like you are spending money at all, which can actually lead to overspending whereas cash provides a physical and fixed boundary for you to work in.

The case for credit

Using cash in everyday spending can be quite time-consuming because you can’t simply open an app to see how much you have or give yourself flexibility on when you buy something as you’re dictated by when you physically have the cash. You also have to actively spend time managing and calculating figures to ensure you’re in budget and control, which can often leave you drowning in a never-ending list of numbers, making monitoring quite difficult. 

Credit can be useful when it enables you to have flexibility with your finances. You can make a purchase and not have to worry about finding the money for it until your next credit card statement arrives. This flexibility is what makes credit so popular as it can be particularly helpful during those days leading up to payday when your money might be running thin. Credit also has the added benefit of, if used correctly, improving your credit score unlike cash. Similarly, it gives people the freedom to jump straight to enjoying the item rather than having to wait until they have enough money to make the purchase, which in some cases can take months or even years.

The verdict

As you can see both cash and credit can play both a positive and negative role in your finances. But it ultimately comes down to how you manage your money. At Incredible, we see the value of both methods but ultimately believe that no matter the method you choose, proper financial management is critical in achieving a positive relationship with money.