“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:
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”.