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Six reasons to use cash

August 23, 2018
Cash is cool, and it's one of the 6 reasons Neil Swidley of the Boston Globe offers to encourage consumers to use it more.
Viktoria Dijakovic

“We should all take this moment to remind ourselves of the massive amount of control we have ceded to the big financial institutions — not to mention nefarious hackers — in exchange for minor convenience on our march to credit card servitude.” – Neil Swidley

Boston Globe journalist Neil Swidley tackles the issue of the appearance of credit cards, American debt and the benefits of using cash in an engaging and enlightening article that everyone should read. “Put away that credit card. You need to use cash more” is not a backward-thinking manifesto for a return to life in the sticks. On the contrary, it’s a careful analysis of the balance sheet of most American households and the culprit for their unsettling debt.

Citing the struggle small shop owners face to keep afloat when competing with the giants such as Amazon and Walmart, Swidey unveils the difference cash payments can make on their already meager profits. Furthermore, with the recent wave of marijuana legalization in many US States, another issue has appeared: the impossibility of these entrepreneurs to own a business bank account and accept credit card payments. This very real issue is yet another reminder of the power financial institutions have achieved to the point of refusing customers on any ground they please, moral or otherwise.

Admitting to being a regular card user himself, and therefore not a cash-only partisan, Swidey simply explains why it’s important to preserve both paper and plastic as viable and complementary payment options.

His six-point list includes:

  1. Cash supports the little guy. As mentioned earlier, smaller merchants find it difficult to cover the 3 to 4 percent fee that each credit card transaction imposes on their profits. An example that speaks for itself is the Common Ground Food Co-operative in central Illinois where customers have been asked to pay in cash. The co-op spent “more than $133,000 in credit and debit card fees in 2017, with plastic accounting for 86% of the sales”.
  2. Cash payments can result in lower prices, because some merchants offer a discount for cash payments as a means to avoid credit card fees.
  3. Cash gives you control. By choosing, for example, to give your full tip to the waiter and not shaving off a percentage for Visa or MasterCard.
  4. Cash protect your privacy. No targeting or re-targeting marketing schemes and no fear of credit card breaches.
  5. Cash offers peace you peace of mind. You can rest assured that, with cash, you are perfectly prepared for the next natural disaster, blackout or cyber hacking of the nearest power plant.
  6. Cash is cool. With it, you can keep track of your spending and avoid debt. Look at the Germans who use cash 80% of the time and have 2.5 times less debt than their American counterparts.

A 7th point could be that cash helps you manage your budget and spend less. You might have experienced it in your personal life, but there are also studies that support this argument. For example, MIT Economist Drazen Prelec found that “people were willing to spend up to 100 percent more on a product – in this case, Celtics playoff tickets – if they were using their credit card rather than cash.” The professor added that “It’s very likely that debt would be lower if credit cards did not exist”.

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