What’s better – cash change or credit card rewards?

This is a debate I see fairly often online and even sometimes come across in real life. Those who deem credit cards to be evil loudly chant things like “CASH IS KING” and the rest of us that know credit cards give you free money if you can use them responsibly, shrug and keep on swiping.

There are pros and cons to both choices, of course. I have been in camp credit card for a long time. I am usually the clumsy person holding up the line as I try to grab both my receipt and the handful of change that they try to hand back to me awkwardly atop my receipt, all while grabbing my bags and trying to exit as quickly and gracefully as possible. This has resulted in dropped change and/or bags more often than I’d like to admit. Credit cards eliminate a lot of that fumbling and I am a fan of cash back.

I do remember a not so distant past, though, when I used to throw the change that collected at the bottom of my purse into a jar and watch it add up. I also used to have some jingle in my pocket after waiting tables 4-5 nights a week too. Since I no longer pay with cash really and no longer wait tables, I started to wonder if I was missing out on an easy (perhaps even significant?) savings % by not saving change.

I decided to go back through my bank/credit card statements for the past three months to see everything I’d purchased. I only counted items that had an odd change amount, since even number transactions could be paid with an even amount of cash if I were actually paying with dollar bills.

I found four recurring transactions that are auto-debited out of my checking account that amount to $2.71 worth of change each month if I had actually paid with dollars. I found MANY transactions on my credit card statements and listed/added the change that I would’ve been handed back had I paid for each of these purchases in cash.

August
26 credit card transactions that equaled $11.44 potential change
4 debits to my checking account that equaled $2.71 potential change
Total spent on credit card: $713.56
Total potential change: $14.15

July
16 credit card transactions that equaled $7.70 potential change
4 debits to my checking account that equaled $2.71 potential change
Total spent on credit card: $529.12
Total potential change: $10.41

June
23 credit card transactions that equaled $11.79 potential change
4 debits to my checking account that equaled $2.71 potential change
Total spent on credit card: $491.21
Total potential change: $14.50

Total potential change I would’ve earned: $39.06

What’s interesting is that the amount charged to my credit card varies a bit each month, but the amount of change doesn’t vary quite as much.

Now, let’s talk about the credit card reward dollars I earned on these transactions. I separated the transactions that came out of my checking account because I don’t earn any cash back on those.

I earned a 1% reward with the Capital One CC I use lately:

$491.27 for June — approx. $4.91
$529.12 for July — approx. $5.29
$713.56 for August — aprox. $7.14
Total: $17.34

The amount of change one would save is double the amount of the credit card rewards earned. There is, of course, a difference in being given the money by the credit cards (only if you’re smart enough to pay them off though) and being disciplined enough to basically save your own money but I think it will still amount to extra found money for a lot of people.

It’s not earth shattering by any means, but I think a lot of us would be okay with an extra $10-15 bucks a month going to pay off a debt faster, padding our savings accounts, or going towards a vacation fund, whatever you want to do with it.

It is, after all, the little things that are done consistently that end up making bigger changes over time.

For me, I’m going to try the hybrid approach and keep charging all of my usual purchases and use an app to round up the digital change for me. I personally use Qapital to do this, but there are many other alternatives as well.

If I had done this for the summer months, I’d have $56.40 in my hand as I write this.

What do you think? Cash or credit card? Or are you utilizing all the systems and using a hybrid approach as well?

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