An Ode to Cash
It seems, sometimes, like cash is a dying form of payment. At most retail outlets, credit and debit rule. There is even the promise of contactless “chip-and-pin” smart cards and more-widespread use of mobile phone payment systems like Google Wallet. Yeah, paying with a swipe is a hell of a lot more convenient than having to have your pockets filled with dollar bills and coinage, but don’t give up on greenbacks just yet.
You’re probably thinking about how sexy it would look if you carried around a gangster roll made up of 20s (or at least with 20s on the outside and a bunch of Washingtons in the middle). But the fact is that most of the world still relies on cash as a practical means of payment. I mean, in developing countries, you’d be able to find places that would accept your Visa or MasterCard, but for most day to day purchases (even large ones), a vast majority of people in these places aren’t relying on those small plastic rectangles at all. They’re using cash.
Because cash is practical.
It is also completely anonymous, so no one can trace your spending habits. And, cash is accepted absolutely everywhere. Sure, MasterCard and Visa are pretty widely accepted, but you still can’t use them at a farmers market or to tip the bohemian cutie who works at the local coffee shop. Furthermore, if you happen to find yourself in a gentleman’s club of some sort, you aren’t going to be having much fun without a pocket full of ones.
What about if you have to lend your friend 20 bucks? He’s not going to pull out a credit card processor so that you can use your Visa to make the loan. Perhaps cash’s best positive, in the age of crippling credit card debt, is that it is the simplest form of currency to budget. It’s there until you spend it, then you can’t spend any more until it’s time to make the next withdrawal. What better way to stay on budget?
And then there is the fee-filled world of personal banking. More and more people are fleeing their standard checking accounts because of all the hidden fees and other non-customer-friendly traits. There’s no better way to avoid the madness than to cash your paycheck (or withdrawal the cash that you need for the week or month). Do this and you will not have to worry about ATM fees, minimum balances, bounced checks, and overdraft fees. Yeah you’d want to have some sort of savings account and perhaps a card or two on hand for emergencies or online purchases, but cash can cover almost all your day-to-day transactions.
Some people are adopting more cash-centered habits before rising credit and debit card transaction fees start getting passed on to customers. Swipe fees are fees charged to retailers by debit and credit card processors (mainly Visa and MasterCard – but also the likes of AmEx and Discover). I’ve noticed these fees being transferred on to the customer at some gas stations and other retailers. For example, at several gas stations I’ve been to, it costs a few cents more per gallon to “pay at the pump” than to walk in and pay with cash. This two-tiered pricing is still not that widespread in the places that I’ve been, but it is noticeable, and, as banks and card companies start pinching pennies, I think it’s a good bet that it will be more widespread in the future.
This is an ode to cash, but, in an effort to be balanced, I’ll take a look at some of the drawbacks as well. If you have more than a few bucks, cash is more bulky to carry than a credit card, but, more importantly, cash is not as secure as credit. You can cancel a card if it is stolen and even have a replacement in your hand in a day or two. When cash is gone… it’s gone for good. Waive your rubber banded roll of dollar bills around in the wrong place, and you might attract stick-up artists or pick-pockets.
Despite this, though, I think cash is still a great way to pay. As long as there are processing fees for other forms of payment, there will be a people who still choose to pay with cash.
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About Josh Lew Josh Lew lives in the Midwestern US when he is not traveling. He is a columnist for Gadling and has contributed to Hackwriters and Skive Magazine.