Cash, Credit or Debit?

REDNOSE

Cash is often the quickest way to get through a checkout line. It's anonymous, so there's no risk of identity theft. And you're less likely to get mired in debt. But cash lacks the benefits of a credit card, like extended warranties and rewards, or the protections. So when choosing a payment method, ask yourself:

What am I buying? Do you need the protection of a credit card? Carmen Santiago, 59, a certified credit counselor for the nonprofit InCharge Debt Solutions, uses her debit card for most everything, pulling out her credit card only for airline tickets and online purchases, where she might need to dispute a charge.

Can I handle credit? While Latinos use credit less often than the general population, they're more likely to run up a high balance and incur hefty interest. "Especially Hispanics who have recently come from countries where credit is rarely used can find themselves over their heads," says Colombia-born Beatriz Hartman of Consolidated Credit Counseling Services.

Can I get special deals? You will not get cash back or points for purchases using greenbacks, but you'll often get a sweet deal with credit cards and, sometimes, debit cards. Santiago shopped around and found a debit card where, she says, "I get $40 to $50 back every month." And some store credit cards offer instant discounts — sometimes 10 percent or more off all purchases on the day you apply.

Bottom line: Use credit if you manage it well and pay off balances monthly. Otherwise, stick to cash or debit. Whatever method of payment you use, says Hubert Rivera, vice president of outreach for InCharge Debt Solutions, you may need to budget.

That's just what Zaragoza is doing.