Why I’m Still Sticking With Cash

February 20, 2015

 

I recently read an article in the Delta Sky magazine that talked about the future of how we pay for things. The author summarized that cash and credit cards will soon be as obsolete as encyclopedia sets, 8-track players and typewriters.  His opinion is that new mobile technology such as Apple Pay or Google Wallet will be the preferred way to buy our groceries, gasoline and everything else because it will be more convenient and safer.  In fact, an article in Business Insider points out that U.S. consumers are using cash less than debit and credit cards for the first time.  So, will cash go the way of the typewriter?

While new technology is exciting and can help make our lives more efficient, it can also create new problems. For example, smartphones can keep us connected, but we now live in a world that feels impersonal and forever noisy. I appreciate convenience as much as the next person, but I’m not convinced that giving up cash will make life that much easier.  Here’s why:

1. Cash is tangible.  Many people prefer cash because they can touch it, hold it, and see it. It is the easiest way to understand how money works and still helps many live within their means. The envelop method of budgeting is based on the principle of putting cash into physical envelopes for different categories. It may be old school, but it works because when the cash is gone – it’s gone.
2. Cash doesn’t need electricity. I remember when a nasty storm blew through town a few years back and brought the area to its knees. The wind and ice took out the power and/or telephone lines in most of the city for almost a week. As power and phone service were brought back on, it was clear that cash was king. Many businesses had generators to power the basics but only accepted cash. Most banks were closed so no ATM. My father taught me to always have cash on me but over time, I grew lazy and reliant on using my debit card. After living through that storm and lack of electricity, I now keep cash on me at all times!
3. Cash can earn you discounts. Credit card companies like Visa, American Express and Discover charge merchants up to 3% on all transactions. Apple Pay and Google Wallet are simply fancy ways to pay for your purchases using your existing credit cards. That’s why some business owners offer an incentive for their customers to pay with cash instead of credit.
4. Cash is secure. Millions of Americans’ private credit data was stolen last holiday season when hackers compromised retailers like Target and Home Depot. These retailers do an incredible job of trying to keep their customers’ information secure, however there are inherent risks with using credit cards. While the new mobile payment companies use new technology to make those transactions more secure, it’s only a matter of time before the bad guys figure out how to hack this too. Cash doesn’t have that problem. If you are concerned about keeping your private data secure, consider paying in cash more often.

These new technologies may indeed be the norm years from now. But until the technology becomes more mainstream and proves to be more secure, I think I’ll stick with good old cash as much as possible.