Wise Bread Picks
Lately, I've noticed more and more credit and debit cards being whipped out for transactions large and small. It's as if cash is becoming a rarity and folks don't even have $4 of the green stuff on them for a latte anymore. When I have dinner with friends, I sometimes long for good old paper money at that critical moment when the check arrives — wallets open and out come four or five different (albeit attractive and shiny) plastic cards. The result is as universal as it is tedious: cards are swiped, tips tallied, PINs entered or signatures given, duplicate receipts divided and dispensed, etc. I've refinanced homes in less time than it takes to settle the tab for a group dinner lately.
Cash seems to be on its way out, becoming merely a vestige of a simpler, more direct economy. As one of the few hold-outs who still pay the old-fashioned way, I'd like to offer the following secret and not-so-secret reasons why cash is still king.
1. It's Universal
Cash is accepted everywhere. Big chains, small mom-and-pop shops, malls or estate sales, cash is still the most direct and universally-accepted way to pay.
2. It's Quick
I don't quite agree with what the ad industry wants us to believe. Credit cards and debit card transactions take more time in most cases than having the appropriate amount of cash in hand. I've been in line behind too many folks who can't quite figure out what direction to swipe their cards, where to input their PIN, and which toe to tap while their bank is contacted for approval. Granted, it may be only seconds, but if we're looking at speed, seconds count.
3. It's Influential
Nothing speaks more clearly and directly as pulling out the greenbacks when you want to buy that used car or vintage guitar you found on Craigslist. The immediacy of cash lends itself to a bit of negotiating power, whether you're buying used or new. Even larger stores prefer cash to avoid fees that are part of most merchant credit card agreements, and that preference can often give the buyer a rare bit of leverage.
4. It's Anonymous
I don't lean toward conspiracy theories, but I do think our lives are less private than we'd like to believe. What, when, and where I buy is my business. Cash typically helps ensure that my transactions are lost in beautiful anonymity.
5. It's Simple
Credit card companies win in two ways every time you make a transaction. First, they're paid by the merchant to have a license which allows that store to accept your card. Merchants charge that fee back to all of us via a slight uptick in prices. Next, the credit card company charges you interest on your purchase if you fail to pay off your accumulated balance in full each month. And for all their trouble collecting fees left and right, credit card companies end up with loads of data about our buying history and purchasing behavior. What a deal!
Debit cards aren't much better — same vendor charges but replace those interest charges with overdraft fees unless you're on top of your game. Cash, on the other hand, supports no such fee structure. There is a single transaction with no secondary charges or supporting transactions that serve only to make guys sitting in glass offices a bit richer.
6. It's Direct
Cash is self-limiting and direct. If I start out the week with $200 in my wallet, I can toss every receipt I get and put my checkbook on ice and still know down to the dollar what's left in my budget in just a few seconds (no smart phone or computer required). Cash is tactile. It always works in real-time and seldom carries a "gotcha" at the end of the week.
I'd be naïve to suggest that credit cards, debit cards, and even checks don't serve a valuable purpose in certain situations. If you need a record of large transaction, are seeking reimbursement for multiple expenses, traveling where currency conversion is an issue or fear cash being lost or stolen, then certainly embrace other more appropriate methods. But for the day-to-day business of life, cash still offers a flexibility, immediacy and influence that can't be beat by plastic.
