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In the age of credit and debit card convenience, many of us don't carry cash. In fact, the Pew Research Center found that only 18 percent of Americans use cash for the majority of their weekly purchases while 46 percent don't worry about whether or not they have physical cash in their wallets.

How much you carry in your wallet is largely a matter of personal preference. While some people carry $20 for the rare cash-only coffee shop, tip jars, or other small purchases, others carry more to cover their everyday purchases. With easy access to ATMs, you can always adjust how much you're carrying based on what you're doing and how much you expect to pay.

To decide whether or not you should carry cash (and how much you feel comfortable carrying), it's best to weigh the pros and cons of making purchases with cash versus card and then adjusting your payment strategy based on what you're buying.

Curb Spending with Cash

Psychologists have studied the pain of parting with money via credit card and cash. What they've found is that parting with cash is more painful, causing shoppers to actually spend less. It stands to reason that by putting cash back into your mix of payment methods, it can actually help you curb impulsive purchases.

For some, putting a budgeted amount of cash in envelopes for weekly purchases helps them refrain from overspending on things like groceries or entertainment. For others, taking out bills in large denominations is another method for curbing unnecessary spending. If you have any unused cash at the end of the week, consider depositing it in your savings account instead of finding an excuse to spend it.

Gain Security with Cards

Other than speed and convenience, people will often skip paying with cash because they can amass credit card points and use them for various rewards.

However, the number one consideration you want to make before choosing paper or plastic is security. If your wallet is stolen, you'll want to call your bank to cancel your cards, but there's little recourse for the stolen cash. If someone makes any unauthorized purchases with your card, fraud protection can help cover the expenses and get you back on track.

Certain credit cards offer price protection. This option gives credit card users the opportunity to submit a refund claim for a price difference if you find the exact same item at a lower price. You usually have a certain window in which to find a better deal and submit a claim and your credit card may have warranty benefits for items purchased with the card, too.

Consider the Item

The next time you go to make a purchase, take a few moments to decide whether cash or credit makes more sense. For example, if you're purchasing a new dishwasher and your credit card gives you the option of warranty benefits, you might be better off using that card or a credit card that gives you rewards/cashback. However, if you're eyeing a new T-shirt, consider paying in cash. You may find that committing to cash-only purchases in certain categories, such as clothes and groceries, helps rollback spending and increase savings.

If you make all of your purchases via card, you can keep doing so, but consider keeping a log of your purchases or paying off your credit card each week. Doing so gives you an up-close look at your spending habits, which is particularly helpful if you want to pay down your debt. It's a way to get that parting-with-cash pang in your wallet without having to give up the convenience and security of paying by card.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

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