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The Frugal Handbook #7: Cash-Less For More Cash

Many people don’t think twice when it comes to making payments.

They simply use whichever method they feel like – card, QR, or cash.

After all, it’s the same amount of money being paid anyway… Right?

The straightforward answer to that would be “yes”, but technically, the answer is “not really”.

A difference arises because of the potential to earn rewards on expenses using certain payment methods, which help to reduce the total cost of the expense.

In this regard, cashless payments are superior to cash payments because they are often eligible for spending rewards and exclusive promotions offered by the payment service – such as banks or financial companies like Grab.

On the other hand, when have you ever seen a promotion that rewards you specifically for paying in cash? Probably never.

For example, if you spend $500/month and choose to pay with your Standard Chartered Cashback debit card all the time to earn 1% cashback on your spending, you’d earn $5/month.

In contrast, if you had paid with cash all the time, you would’ve missed out on this $5/month.

While $5 may only be able to get you 1 cup of bubble tea, if you scale this up to larger expenses and with higher rewards rates (as with better credit cards), this $5 will inflate in value.

And don’t forget the extra value you may receive as a result of exclusive promotions.

Over the months and years, these rewards you stand to gain can accumulate to become a large sum of money that you would never have been able to earn if you pay with cash.

Ever since I learned how beneficial cashless payments can be, I’ve minimised my use of cash and almost always opt for card (ie Visa/Mastercard/AMEX, NOT NETS) payments.

If card payments are unavailable, then I’d try the next best option – QR payments (GrabPay, Dash, PayLah!).

If I’m left with no other option, only then would I pay with cash.

Or, it’s a small purchase (a few dollars) and I have coins I’d like to get rid of – I like rewards, but I also don’t like fat wallets full of coins.

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