Comparative essay on cash vs credit card. Advantages and disadvantages

Cash vs credit.
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Every day in life is coupled up with different purchases and sales done all around the globe, as and when it is necessary. During these times, there must be monetary transactions that are done. Many people choose the mode of the transaction depending on their convenience and other factors. These monetary transactions can either be done with cash or credit payment. One striking similarity between these modes of payment is that for both, the money gets to the intended party. However, the choice to choose one model over the other must make economic sense. This paper outlines the similarities and differences between credit and cash payments.
Advantages and disadvantages of cash payments.
To begin with, both credit and cash payments are acceptable by all the business entities all around the world. This is because overtimes, different people have adopted different modes of payment and the market for the goods must accommodate all their customers. When a business starts, the management makes a provision for both the sales in cash and on credit. Looking at a case where a company deals with the sales of motor vehicles, they make a provision for credit sales more because of the nature of the business.
To add on this, the credit and cash payment methods are similar in that both modes of payment are controlled by one entity; the bank. When a payment is made to a company in cash, the company takes the cash they have collected, and they deposit it to the bank. On the other hand, when the payment is on credit, the payment is made directly to the bank. This shows that the bank is at the center of these operations and it helps to regulate the amount of cash that is in circulation. the records for all these transactions are also kept by the bank.
Cash payment is a preferred mode of the transaction by people because it does not have service and transaction costs. When one chooses to pay in cash, they pay the exact fee for the commodity, however, when they are buying the same commodity on credit, there are extra charges that are made. This makes cash transactions cheaper than credit transactions. For this reason, some companies tend to advise people to make payment in cash so that the thought of incurring more expenses on the transaction does not hinder purchases. It also makes economic sense for the buyer to make purchases in cash.
Another reason as to why people prefer cash transactions is because it helps them to know the gravity of the financial decision that they are making, either during the purchase or before the purchase. This is because, the cash is at hand, and you feel the pinch of paying the huge amount to the point where you rethink through your decision. This, however, is not the case with credit purchases. Here, you rarely get the pinch of spending lots of money because you do not physically transact. The overall effect of this is overspending on things that you could have avoided had it been a cash transaction.