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One of the more important topics to discuss is when you should pay in cash and when you should pay with credit or debit cards. If you go overboard with credit, there is a chance you can go bankrupt. People think they can treat credit cards like they are unlimited supplies of currency, but they are spending real money.

It’s also hard to know when you’re able to pay cash for certain items. Can you pay cash for a car? That’s a lot of money to give out of pocket. Taking out a loan on a big item might be the better choice for some people if they don’t have a ton in their bank account.

Many people don’t know what debit cards are. Debit cards are used like credit cards, but they aren’t loans. Debit takes the money out of your checking account immediately. It’s important to use so you don’t overspend, but it is also not ideal to always use your own money up front. Loans are imperative to healthy financial habits.

Do: Use Credit Cards For Some Bigger Purchases

Credit cards are very helpful when it comes to purchasing semi-large items. While vehicles and houses are too expensive to use credit cards because most people don’t have a line of credit big enough, a pair of shoes or a new gaming console you buy for Christmas might be something you can use your credit for.

Taking out a loan is sometimes the best way to make sure you can pay for large items while also keeping your checking account full enough to pay for other things. Using credit cards is a great option for items between expensive and cheap. You need to be careful to pay back your credit card loans on time though, as your credit score impacts everything from your auto insurance to your cellphone bill..

Interest rates on credit cards aren’t friendly from every bank, so try to shop around. You should also look for a credit card that will give you cash back and bonus points for vacation and travel expenses.

Airfare, hotels, and other expenses while going on an adventure can be quite expensive. Getting discounts by using a credit card that caters to traveling is very smart. Capital One and BECU both have good travel cards novice credit holders can use easily.

You could also think about taking out a couple of cards so you can allocate the expenses by topic. Have a credit card that is strictly for necessities. This means rent, gas, food, or other things you have to buy to live would be good for this card.

Then have a card for entertainment. Maybe apply for a smaller limit on this one so you don’t overspend when going out for drinks and movies. This is especially important if you know you have a bad habit of being credit card happy on Saturday nights with your friends.

Don’t: Send Cash Through the Mail

There are a lot of different ways to spend your money, but one of the biggest no-nos is sending it through the mail. Under no circumstances should you send a credit card, a debit card, or cash through the postal service. The first two options are not something many people think about doing. Cash, on the other hand, is a frequent gift item for Christmas and birthdays.

If you want to send a relative a couple of 20s, make sure you do it in person. You never know whether a thief is going to go digging through your mailbox. Think about buying a lockbox, or you can get a post office box if you are still concerned about theft in the mail.

Keep your gift money until you see your loved ones in person at a gathering. This will guarantee that the intended recipient gets what you want them to. The same thing applies to paying bills. Never send cash payments through the mail for insurance, heat, or water.

Do: Use Cash to Pay for Groceries

Cash is best used for smaller purchases throughout the day. Buying your groceries and getting a coffee from Starbucks are great opportunities to use cash for payment. If you use credit cards at these places, you may find you don’t have enough credit left when it’s time to pay for larger things.

Get a receipt every time you use cash in the grocery store or other shops so you know where it was spent. Using cash doesn’t tell you where you spent it when you look at your bank statement. Using credit or debit shows you where you spent the money.

It’s a small thing, but you should never flash hundreds of dollars in bills at other people in public. When you are paying for your groceries, only take out the amount of money from your wallet that you need. If you take out a huge wad of cash, you never know who might try to steal from you.

Don’t: Use Debit With Unfamiliar Clients

Debit cards should never be used when you don’t know the trustworthiness of the receiver. Buying with debit from an unfamiliar store online gives potential thieves or hackers the opportunity to steal money from you. If they guess your PIN, they would be able to withdraw money from your account.

Use debit in places where there is a trust factor between you and the receiver. Big companies are not likely to steal your information if you use debit cards. Small businesses that have a good reputation in your area are also probably trustworthy. Never give out debit card numbers to individuals unless you know they have your best interest in mind.

Hopefully, you have seen it is good to use all three of these payment options in the right place, and at the right time. It is a skill to understand what option is the best for each scenario, and you will learn the more you use all three.

Even if it might seem tough to figure out which to use at first, it’s valuable to have the ability to spend your money with all three of these options.

Shawn Laib

Shawn Laib writes and researches for the auto insurance comparison site, He wants to help people understand how to manage their money in a fast-paced society.