Should You Ditch Your Credit Card Because of the Trending Digital Purchase Payments?
Credit cards are a thing of the past. It all comes down to smartphone tap-and-pay technology. If you're a frequent Amazon buyer, you can also use one-click checkout. Then there's Klarna, a Gen-Z favorite offering purchase now, pay later services.
All of this adds up to a cash register's worth of alternatives to shopping using a credit card.
It's something that everyone is doing. In fact, digital wallets are currently the world's most common payment mechanism. They are more common than credit cards, although the United States lags behind many other other countries in their use for day-to-day transactions.
You might feel inclined to suspend your credit card. However, before you do, weigh the benefits and drawbacks of getting rid of the physical card and switching to digital.
Upside: Digital transactions are convenient
Let's admit it: it's far more convenient to click a button or tap a smartphone than it is to carry around a credit card. Credit cards have several concerns, a s in malfunctioning chips, strange swiping problems that appear every time you buy produce at the supermarket. You can avoid all of that with digital payments.
Some providers, such as PayPal, keep your data for you. It saves you from having to fill out lengthy forms with your credit card details, home address, and billing address over and over again.
Speaking of time-consuming procedures, Cash App customers may file their tax returns directly from their account for free. Digital transactions are typically accompanied by additional benefits that make them easier to use than credit cards alone.
People would rather not be detained at the Walgreens cashier. Particularly when the manager begins talking about electronics while fiddling with the faulty card reader. Consider switching to a contactless credit card for optimal ease at the cash register.
Upside: Digital transactions are safe
Is digital purchase more secure than credit card payment? It all depends on what you employ. Two-factor authentication (2FA) is a feature offered by many digital payment companies that sends you an email or text message each time you make a transaction.
Mobile wallets such as Apple Pay and Samsung Pay are generally secure. They employ encryption and personal IDs to ensure that only you can access your cards. Some of these functions must be activated manually, so users should make certain that they do so.
Many of the security measures you'd expect from a credit card issuer are available on third-party payment systems like PayPal. Because your digital credit card is not linked to your bank account, you will continue to get notifications if your credit organization flags fraudulent purchases.
Eventually, stealing your phone and hacking your password is more difficult than stealing your wallet while standing in line for the newest iPhone. That is pretty significant.
Upside: Digital payments provide incentives
If your credit card gives 1% cash back on supermarket purchases, a digital credit card saved to your PayPal account will provide the same advantage. Furthermore, certain digital wallets, such as Cash App, provide their own discounts.
Downside: People who utilize credit cards spend less money
Credit card users spend somewhat less than mobile wallet users. That might be because having a hard piece of plastic held between your fingers at Walmart makes it simpler to feel like you're losing money.
Downside: Credit cards are more widely accepted
Some people may walk into a store with only their phones and leave empty-handed after being told that, unfortunately, their local CVS does not accept Apple Pay. On the contrary, going overseas, you may happen to only be rejected a credit card swipe.
Is it worth ditching all credit cards?
Despite the increased usage of digital transactions, credit cards remain the best option for many individuals, and by linking them to a payment system, you may get an additional layer of safety and convenience. Consider storing your actual cards in a secure location at home and pulling them out when needed. It's vital to realize that in the United States and many other countries, conventional cards are accepted more frequently than digital payments at the cashier, so prepare accordingly.