Yahoo Finance 5 Purchases That You Might Save Money on by Paying With $50 or $100 Bills Instead of Credit
Credit cards can either be your best friend or your worst enemy. On the one hand, they are great for providing a solution to bigger purchases — you buy what you want now and pay it off later. On the other hand, interest rates, missed payments and hidden fees can make your credit card a nightmare. And keeping cash on hand is just not feasible. Or is it? There are some businesses and transactions where it might actually behoove you to pay using larger bills — such as $50s or $100s — instead of putting the cost on a credit card.
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“While credit cards certainly have their place in modern financial transactions, there’s still something to be said for the power of cash — especially when it comes to larger bills,” said Daniel Meursing, founder and CFO of Premier Staff. “By strategically using $50s and $100s in certain situations, savvy consumers can potentially unlock significant savings and negotiate better deals.”
GOBankingRates checked in with Meursing and some other financial experts to see five places where you might save money paying with bills instead of credit.
Home Renovations
Home improvements are an example of a scenario where the use of cash, particularly in large denominations, can be very advantageous in the opinion of Ariful Islam, CEO at Sterlinx Global.
“Cash payments are often preferred by contractors and builders as it assures them of instant liquidity to their operations,” Islam said. “In some instances, this preference can lead to homeowners getting discounts or better offers if they pay for cash.”
From a consumer viewpoint, Islam stated that “…paying cash can enable people to avoid problems that come with home improvement loans such as high interest rates and long durations for repayment. This is especially important when dealing with big projects which can easily overrun the initial budgeting.”
Islam pointed out that using cash allows homeowners to spend only what they have, which reduces the chances of being in debt.
If you’re planning a home improvement project, Meursing shared the pro tip that it might be a good idea to set aside a fund of cash that is to be used directly for this purpose.
“Having the money on hand can give you more negotiating power and potentially lead to significant savings,” Meursing said.
“Work may commence immediately without having to wait for loan approvals or banks releasing funds. This is highly relevant in time-bound projects or emergency repairs that need immediate attention,” Islam said.
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Local Small Businesses and Artisans
When shopping at local small businesses or purchasing handmade goods from artisans, paying with cash can often lead to a better deal, according to Meursing.
“These vendors may prefer cash transactions to avoid credit card processing fees, which can eat into their already tight profit margins,” Meursing said.
“I recently experienced this firsthand when shopping for a custom gift for a high-profile client,” Meursing said. “The artisan I was working with offered me a 10% discount if I paid in cash, as it allowed them to keep more of the sale price. By having larger bills on hand, I was able to negotiate an even better deal, as the artisan appreciated the ease of the transaction.”
Meursing advised consumers that when shopping at local artisan stores or mom-and-pop businesses, “…don’t be afraid to ask if they offer a cash discount. You may be surprised at how much you can save just by asking!”
Jewelry Purchases
Having cash on hand is especially useful when you are looking to buy a rock, a ring or a custom-made piece of jewelry. That’s because lots of jewelers prefer getting paid in cash, making it easier to reduce the costs of processing card transactions.
“Sometimes, this favor is demonstrated through the giving of discounts or additional value for the purchaser,” Islam said. “In the case of buying jewels, it is financially sound to pay in cash rather than taking up debts. Certain pieces of jewelry, especially the high-class ones, can take a lot of your money before you get them. In such cases buyers who do not want to have a long-term debt burden from loan repayment or credit card interest pay upfront amounts that provide value for their money.”
“Large-scale purchases are frequently exposed to fraud including stealing sensitive financial information,” Islam went on to explain, adding that cash provides a sense of security and finalization on the transaction.
High-Ticket Purchases
Meursing highlighted that in the world of luxury purchases, paying with cash can sometimes be advantageous, even with the most notable and exclusive brands.
“While high-end retailers like Louis Vuitton or Bentley dealerships are more than equipped to handle credit card transactions, offering to pay in cash can sometimes lead to additional perks or incentives,” Meursing said.
Meursing gave an example of working with a client who was looking to acquire a new Ferrari: “We were able to secure a complimentary racing experience package by offering to pay a portion of the purchase price in cash. The dealership appreciated the certainty of the cash transaction and was more willing to throw in added benefits to seal the deal.
“When making a high-ticket purchase, don’t be afraid to ask about potential cash incentives or perks,” Meursing said. “While it may not always result in a direct discount, you may be able to negotiate added value in the form of extras or upgrades.”
Real Estate Transactions
This is especially true for buyers looking to get in on a hot property in a competitive market where there might be lots of competition.
“Sellers may prefer all-cash buyers because it accelerates the closing process and wipes out the dangers of a deal collapsing due to financial constraints,” Islam said. “Occasionally, this inclination may however result in reduced purchase cost which translates into great savings for the buyer.
“Those who pay cash for real estate must ensure that they have all their financial documentation in order and work with a reliable lawyer or realtor to ensure that everything is legal and transparent,” Islam noted. “Doing so will protect your investment as well as your interests.
“Of course, it’s important to always consider your own financial situation and never compromise your budget or security for the sake of a potential deal,” Meursing concluded. “But by being strategic about when and where you use cash, you can potentially stretch your dollars further and come out ahead in the long run.”
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This article originally appeared on GOBankingRates.com: 5 Purchases That You Might Save Money on by Paying With $50 or $100 Bills Instead of Credit
