If cash is king, why do we keep inventing new ways to pay for things? Mobile payments, debit cards and let’s not forget credit cards. There are a variety of credit cards such as cash back, rewards, charge cards, travel, affinity, low interest and airline to name just a few. A recent survey (Rasmussen Reports) indicates 43% of adults stopped using cash for a week. Is this the future?
Which one are you? I almost never use cash! When I owned my restaurant, I always had cash. My customers paid cash for the food and it was convenient. Now the trend in quick service restaurants is to offer credit or debit payments as well as cash. Personally, I think it is a good trend because you can expand your business. Businesses should always make it convenient for customers to pay for your products or services. Everyone offers a variety of ways to pay for goods and services using credit/debit cards including your doctor!
I do not use cash because it is inconvenient! I am paid monthly via direct deposit. In other words, it is cashless! I would have to go to the bank or ATM and withdraw cash. It just does not make sense to go to the bank so I can pay someone in cash. Although there are times when I must because that is what the business will only accept. I only use cash, if I get an additional discount. What do you do?
Have we made cash inconvenient? A long time ago, I worked for a laundry company which owned coin operated washers and dryers. They owned a lot of them and that meant we made special arrangements with the bank to handle the coin. There were lots of procedures to make sure our collectors were honest and counting the money was a huge undertaking. Cash brings out the worst in people, you know. There are lots of businesses that require cash, but it is changing.
In Los Angeles, the parking meters switched to credit or debit cards. Thanks to the recession, the fees have suddenly increased several fold! It went from a quarter for an hour to $1.25 an hour almost overnight! Cash strapped governments are looking for ways to increase revenue, so this is somewhat expected. Why are consumers moving away from cash? Is it inconvenience or are they just adding to personal debt?
I wrote an article called Cash or Credit which discusses the choice. A 2011 study says that people who use cash think about the purchase more than the person that doesn’t. Personally, I am less conscious of my purchases when I use cash. I just know I used what I had whether it was a five, ten or twenty. When I use a credit card, I am much more conscious of not going over my monthly spending limit. I think I am more conscious of my spending because I pay my credit card balance every month.
The future is here and I learned to adapt very well. I use a credit card all the time because I accumulate frequent flier miles. There are so many incentives to get credit cards and use them. I have a credit card (Costco) which rebates 3% for gas purchases and 1% of all other purchases, another credit card (Target) that rebates 5% immediately for purchases and still another (sears) rebates 1% of purchases as a discount on future purchases. Cash used to be king?
It has taken more than forty (40) years since I studied about the cashless society to finally take hold. People will always use cash, but less! Where is the incentive for me or anyone to go the ATM to get cash? I would and have used cash when I can get a significant discount. Many of you use cash to control your spending, but recognize that is not the only way. At some point, you need to find other ways to control your spending. Cash is king, but you must adapt!
Photo by: JMR Photography
Carnival of MoneyPros at Simple Finance Blog
Carnival of Fin. Camaraderie at The University of Money
Y & T’s Weekend Ramblings at Young and Thrifty
Yakezie Carnival at One Cent At A Time
Carnival of Retirement at I Am 1 Percent
Cash is king!