I want something that costs about \$5000. I have the money in the bank (more than required) and it would be a good use of our money, but I have a hard time letting go of money. So, if I do make this purchase, should I buy it in cash or finance it and then pay it off quickly (to lower the finance charges)? The benefit to using cash is that I can’t accidentally or foolishly spend the \$5000 as it sits in the bank. The drawback is that if there is an emergency, then I won’t have that \$5000 cash on hand. But I do have a high-limit credit card, and if there is an emergency then I shouldn’t feel bad about using the credit card, right? What do you think?

By Kevin Lawver

Web developer, Software Engineer @ Gusto, Co-founder @ TechSAV, husband, father, aspiring social capitalist and troublemaker.


  1. I’d pay for it in cash and keep the card for an emergency.
    The benefit is that you’d only generate finance charges IF there was an emergency. The other way around, you end up paying the finance charges no matter what happens. It’s what I’d do (and who doesn’t want to be more like me?)

  2. Charge it and save the money.
    Then shop around for a card that will allow you transfer the balance.
    There are tons of them out there which are letting you transfer, no fee, with little or no interest for up to 12-16 months.
    But whsatever you decide – enjoy the purchase.

  3. It depends on the finance terms. I know my credit card company has no fees and no APR for one year on cash advances. You will make more of a return investing the $5,000 in something you can get 3% or so back on in a year and pay back your cash advance piecemeal within the year. But make sure you can pay it off in a year because when the APR kicks in it is nasty. Chris and I have done this several times.
    But if the only finance terms you can get are equal to or more than what you could get by investing the $5,000, then I would just pay cash.

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