Around the globe, there has been a recent spate of security breaches, including in major companies such as AT&T, Target and eBay, which have affected hundreds of millions of individuals. Typically, databases are hacked and sensitive consumer information including credit card details and passwords are stolen. GfK Public Affairs and Communications, in collaboration with the Associated Press, developed a study that found as a result of these cybercrimes that put consumer data at risk, 37% of people now prefer to use cash instead. But how much safer is using cash or a debit card as opposed to a credit card?

In the event of consumer credit card data being breached, lending institutions offer protections that do not come with cash purchases. If your credit card information is stolen and used to make a purchase, many card providers will reverse the charge or offer limited liability. In addition, the credit card limit provides a ceiling on the maximum amount that can be spent. On the other hand, if your debit card information is stolen, the thief will have access to your bank account (as opposed to a credit limit), and you are left fighting with the bank for your money back. This is especially true for online transactions, where using a credit card is always a better idea than paying with a debit card.

If your wallet is stolen or lost, all that needs to be done is to notify the card issuer of the situation, and the cardholder is not responsible for any purchases made after that. Compare that with having a wallet full of cash, there is no way to get that money back.

Even if you still prefer to use cash, there are a few things to keep in mind so that overspending does not occur. Naturally, cash has a funny way of being spent, and usually not on the things that it was meant to buy. To combat this, make sure you follow your budget very close and only pull enough money from the ATM to cover your expenses. Overspending will mean that a compensation must be made from another budgeted item.

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