Paper or Plastic: Why Everyone Should Choose Cash Over Credit Cards

Visa has recently produced commercials touting the use of plastic over the use of cash in retail locations. The premise of the commercial is that everything is running smooth until some Neanderthal hands the cashier cash while holding up the line for everyone else. Who are they kidding? Have you ever been behind someone trying to use their debit card at a POS terminal for a $3.00 transaction? "Enter PIN." "Cash Back?" "Amount OK?" "Hit Enter to Confirm." "Please Wait for Cashier." The message isn't subtle, nor is the 6 billion direct mail invitations credit card companies send out each year for their products. If Visa and MasterCard had their way cash would be virtually eliminated.

Using Cash Hurts
Our family has discovered a simple truth that Visa would never admit to - using cash hurts! If we take the family out to dinner for a birthday celebration and the server brings out the check we have two options. We can whip out a credit card and place it in the tray or fork over that $100 bill that's the only thing lining my wallet. Laying "Uncle Benjamin" down in that little black coffin on the table registers a painful response, while throwing down the plastic causes no pain. We tend to swipe-and-go without stopping to think, hey, I'm going to have to pay for this stuff at the end of the month.

You Spend More with Plastic
Grocery stores and fast food joints figured this one out a long time ago. Sure, they told us they now accept credit cards for "our convenience." Isn't that nice of them? However, their marketing department was working overtime in a backroom at headquarters calculating the potential return on their new technology investment. A report by Dunn and Bradstreet indicates when patrons use a credit card versus cash they spend approximately 18% more for each transaction. Eighteen percent of six or seven dollars comes out to about another dollar per transaction. That's an extra apple pie or two, or a combo meal instead of just the sandwich, etc. Multiply that extra $1 times the "one billion" served and you can see why fast food restaurants were eager to accept plastic.

Safety
Many people are afraid to carry cash because of security concerns. These fears are largely unfounded as the average person will never experience a mugging in their lifetime. I don't have any numbers to back up this claim, but I bet pick pocketing incidents are on the decline because so few carry cash these days. All the thief would find are a bunch of maxed out credit cards! Of course, those credit cards do have some personal information embedded such as PIN numbers, and are tied to a database back at the credit card company full of your personal information. Armed with your driver's license and a little internet research they could probably take over your identity. Fortunately, there isn't anything on a dollar bill that indicates it belongs to me. As a matter of fact, the only identifying characteristic is a serial number indicating it is property of the United States government.

Paying with cash makes so much more sense than borrowing money on a credit card. Unfortunately, many in our society think they are too "sophisticated" to carry cash around. After all, that is so 1990's!