Banking Accounts

Cash Vs Debit Card in Canada: Which is best for you?

To the point This article aims to discuss whether cash or a debit card is better to help you decide which method works best for your needs.

Deciding on using cash or a debit card as a payment method can be a hard choice. There are many factors to consider.

On the one hand, cash is available to you for your day-to-day activities. On the other hand, the debit card may have more flexibility as a payment option across many channels.

Why should you use debit cards?

Although there are many reasons one would choose to use both cash and a debit card, the primary purpose of using either method is to spend money in exchange for services or goods.

Debit cards in Canada are a great financial tool with many advantages. When you open a chequing account, you are given a debit card to make purchases without writing a check. Here are some of the benefits that come with owning a debit card:


Debit cards are convenient because all you need is your card and PIN to use them anywhere they are accepted. They give you instant access to your money when it’s needed, eliminating the need for chequebooks, cash, or lines at an ATM. All you need to do is swipe the card and enter your PIN.

No debt

Unlike using a credit card, the amount you spend on your debit card does not affect things like your credit score. When you make a transaction, the source of funds is coming straight from your bank account.

It is an excellent substitute for cash, and you avoid spending money you don’t have in most cases. An exception to this is an overdraft plan.

Greater acceptance

Debit cards are widely used in Canadian society. Based on research findings by Payments Canada, here are the numbers of Canadians who use debit cards to purchase their goods and services:

  • 97% of Canadians have a debit card
  • 57% use their debit card at least once per week
  • 2nd to credit cards as the most used payment method


One of the biggest drawbacks of debit cards is the fees don’t pay when you use them. Depending on the financial institution you are with, you will generally be charged a fee when you withdraw money from a different institution or ATM. You will also be charged depending on the number of transactions you make in each month.

Debit cards in Canada are a great financial tool with many advantages, such as convenience and security. However, they are still best utilized if you know how to use them properly. With many Canadians already using them, you have more options available to you for purchases.

Why should you use cash?

The obvious benefit of using cash is that it is readily available to you anytime you need it. You also do not have to worry about credit limits or overdraft fees. It is an easy way to make or receive payments without having to use plastic or online banking.

Cash transactions are quick and simple for people on the go who don’t want to deal with checks, credit cards or debit cards.

Here are some of the benefits of using cash for your everyday spending:

Cash is cheaper

Cash transactions are the least expensive way to make payments for goods and services. You will get the best deal when you pay with cash because there are no hidden fees.

Depending on where you are accessing your cash, you won’t have to pay a fee to use it. This can be a small fee but will help you save hundreds over the years. The convenience is worth it to some people and their current financial goals.

Carrying cash avoids overspending

When you carry cash, you are much more likely to avoid overspending. Having physical cash keeps you within your spending limits instead of debit and credit cards that incentivize you to spend more than allotted for in your budget.

When you know how much you must spend, the psychological benefit it gives you is essential for your savings and personal finance goals.

Cash is still widely accepted

You will find many businesses – especially mom and pop shops prefer cash as a payment method over methods like debit cards. This is because they are charged a small fee for each debit transaction while they are not required to do so with cash.

Depending on whether you travel, many non-western countries still use cash as their primary form of value exchange. Cash is contextual in many cases and depending on where you live may be the most suitable option for payment.


Cash is highly risky to carry in large amounts. While it is excellent to help with things like budgeting and spending within your means, you are not protected the same way you would be if someone stole money from your debit account. It is important to limit how much you carry with you at any given time to manage your loss appropriately.

There are many advantages when you decide to use cash payments in place of plastic or online payments.


The choice between using cash or debit cards is just that – a choice. There can be an endless debate as to which payment method better to use. But either one would be the most convenient to use depending on the situation. People are, of course, more apt to have cash with them when they are at home, making them more aware of checking their accounts frequently and always having it ready for emergencies.

It should also be noted that debit cards can very well do much of what cash can, including tracking your spending through apps offered by your financial institution. The reality is that while most Canadians are moving away from cash, this using both payment methods can be a good long-term strategy.

To know which method is best for you, try tracking your spending using each to see if how your financial discipline changes. If you are perfectly fine not overspending with your debit card, this may be the answer for you.

Come to discuss that topic in our Facebook Group!

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