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More and more people are using credit cards and debit cards instead of cash. The average American has at least four credit cards in his wallet and many have more than ten. Moreover, paying with credit or debit cards offers lots of benefits to consumers that must be taken into account when analyzing why more and more people are turning to plastic payment and why credit cards are beating cash.

Consumers are fond of various things: rewards, money savings, time savings, flexibility, financing, etc. All of these things and more are provided by the use of credit cards and debit cards instead of cash. But merchants also benefit from these forms of payment. They don't have to wait for the money as if they where to offer financing by accepting checks and they can get the money right away by offering financing for those who would have to postpone the purchase till they raised the money to pay in cash.

Different Reward Programs

Most credit cards offer reward programs. This way they obtain customer fidelity and make sure that the client won't prefer to pay with another credit card. There are many different reward programs featuring all kinds of rewards. The whole idea is to make presents to the client according to the amount of money he spends with the credit card.

As stated above, there are many different reward programs. For example, you have credit cards that accumulate miles that you can exchange for airline tickets and travel for free. There are also credit cards that accumulate points that you can exchange for certain presents, like house appliances, personal goods, computer stuff, etc.

Money and Time Savings

Purchasing with credit cards saves you time for many reasons. But the most important one, due to its consequences is the fact that when you don't have to wait to raise the money in cash, you usually get better prices. This is especially true with airline tickets and rebate offers that only last for some time and otherwise, if you can't raise the money sooner, you may loose the offers.

Purchasing an airline ticket today can save you 50% on the price of the ticket compared to what you would have to spend if you had to wait two or three weeks to raise the money. This is due to the fact that prices rise as demand rises and demand rises when people actually get to cash their pay checks.

Flexibility and Financing

But perhaps the most important characteristic of credit cards is that they provide both flexibility and financing. When you purchase with a credit card, for starters, you'll only have to pay when the pay day is due, which is usually by the end of the month or the first days of the following month. Moreover, you don't need to pay the whole balance in full. You can pay only part of it and finance the rest.

This is an excellent tool if you have some months with high expenses and others that are more moderate. You can avoid making sacrifices and purchase all you need. Then, you just paid the amount you can afford and finance the rest. However, don't forget never to miss the minimum payments or your credit score will drop as this is considered a delinquency that will be recorded into your credit report.

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