It’s a common money quandary: When should you bust out the plastic and when do you break out the benjamins? As it turns out, there’s a right and wrong time for both—and choosing the best payment method can actually result in not just dollars, but aggravation saved. Here, a guide so you never second-guess your choice at the register again.

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Use Credit If It’s a Situation Where You Can Earn Points or Cash Back

News alert: It is possible to pay for a vacation entirely in credit card points. That’s why it’s smart to use the right card (aka one that guarantees rewards) in situations where you can really rack them up. For example, the American Express Blue Cash Preferred card will earn you up to 6 percent cash back on groceries bought at any U.S. supermarket (maxing out at $6K a year). And the Chase Freedom can earn you 5 percent back (up to $1,500) in rotating categories—gas included. Just be sure to pay your monthly balance in full so you don’t gain points but lose dollars on interest.

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But Pay in Cash for Tiny Purchases (Especially at Local Businesses)

That $10 minimum you see at your local bakery or mom-and-pop coffee shop? That’s because smaller vendors typically have to pay a processing fee—to the tune of $1 to $2 per transaction—to run your card. If they don’t charge a minimum, they’ll often tack on the difference, which means paying in cash will help you save.

Pay With a Credit Card to Protect Against Fraud

There’s a reason it pays to use your credit card (instead of your debit) when shopping online: If a transaction goes awry—or you get hacked—your credit card company has you covered with methods in place to efficiently dispute a charge. In general, it’s smart to use a credit card for all online purchases, but if you prefer to use a debit, do your best to avoid it with vendors you aren’t 100 percent sure you can trust. (We’re talking to you, Ebay guy with not-so-great reviews.) It’s not to say you can’t recover funds lost from your debit account; it’s just that it isn’t always successful—and can take a lot longer.

Use Cash If You’re Trying to Make (and Stick To) a Budget

So you *really* want to keep tabs on exactly how much you’re spending each week. Cash is king—and the best way to be mindful of surprising wallet drains. As an example: If your grocery budget is $100 per week, withdraw and head to the store with that exact amount. It’s easier to stick within it.

Pay With Credit If the Card You’re Using Offers Price Protection

OK, so this can be a bit of a hassle because in most cases you have to register your purchase after you buy it, but a lot of cards—MasterCard, Citi, Chase—offer the option to track items you bought online for price drops, then will refund you the difference within a certain time period and up to a certain amount. It’s definitely a perk when shopping for high-ticket items like a TV or travel like airfare or hotel rooms.

Use Cash (Always) When Tipping is Required

Sure, your nail salon is sometimes OK with you tipping on the card, but keep in mind: Paying in cash means employees get to take home their gratuity right away instead of waiting until the end of the week or month. In addition, there’s that whole transactional fee thing—some small businesses will charge you an extra $1 to cover a tip on a card.

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