A Cashless Society
We are at a time where up to 43% of Americans can go an entire week without spending cash, according to Bonnie Kavoussi, writer for the Huffington post. An entire week without using cash is quite simple because of the use of debit and credit cards. There are negatives and positives that go with the use of cash vs. using a debit or credit card.
Although credit and debit cards are much more convenient, in the long run you end up spending more money. Without having the money physically in your hand, it makes it easier to lose track of the amount you are spending. A smart money article from 2010 explains, “Studies as far back as 1979 and as recent as 2008 have shown that consumers who pay with cards tend to spend more than those who pay cash. One theory holds that parting with cash is a vivid enough action to elicit a type of psychological pain and that card transactions are too abstract to be painful. In recent years, researchers have also focused on the biological underpinnings of impulse purchases the sensory glee that causes rational shoppers to buy things they might regret later.” This smart money article goes more in depth and further explanation as to why using debit or credit cards are much less “painful” than letting go of your cash. The Huffington post makes a great claim in saying that the banks are the ones reaping the benefits of the use of debit and credit cards. “When we pay with cards, the clear winners are the banks who collect fees every time you swipe a debit card or credit card. Of course, for those who spend more than they have–there are overdraft fees with which to contend.” Overdraft fees are a pain, but in reality it is true that instead of using the right amount of cash you end up spending more than you have and the consequence is paying more. In the end you have to ask, is it worth it?
With downfalls you will also find the positives to using a debit/credit card. One of the main reasons people use debit/credit cards is purely the convenience behind it. Trends-magazine made the point, “When people use debit or credit cards to make purchases, they don’t need to withdraw cash, carry enough for their purchases, and count their change.” Bottom line, people do not want to take time to make those extra stops. Trends-magazine also talked about how it is beneficiary to use debit/credit cards for security reasons. “Consumers have less reason to worry that a card will be lost or stolen because it is often protected by a PIN number or a signature requirement, and banks typically cover the user’s losses if the card is used fraudulently.” It makes perfect sense, if you lose a hundred dollar bill you’re not getting it back, whereas with a card it can be replaced and/or refunded.
To each their own, whether it is cash or debit/credit card it is a good to know the positives and negatives to both. You can use the more convenient route or you can save yourself the hardship of potentially having to pay off late fees.
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