6 Reasons Why You Need to Carry Cash
You all may remember when Madison hosted a writing contest here at My Dollar Plan in order to find staff writers for her site two years ago. I was one of the winners with my post The Automatic Poorhouse, where I detail how my husband and I self-inflict living paycheck to paycheck because I automate away all of our money to savings and bills. Everything is so automated, in fact, that green pieces of paper (that smell so good!) are a rare commodity in our household. By the end of the article, I vowed to begin carrying around an incidental amount of cash ($10) in my wallet to open up my spending a little and play around with it (after closely analyzing its color, fibrous texture, and overall feel since I haven’t seen cash in so long).
And you know what? This new habit has not stuck. Here we are two years later, and cash is as foreign an object to me as an iPod is to my grandmother. Rather than cash, I see printed numbers on bank account websites, on credit card websites, and I see transfers flip-flopping through all of our accounts.
I love our credit cards, especially since I can get fantastic sign-up bonuses and reward points for money I was going to spend anyway; but it can be annoying to not pay for things in cash. From my experience (the experience of someone who will do just about anything to wiggle out of having cash in her wallet), below are the most annoying parts.
- You Can’t Take Advantage of Cash Discounts. There is a small trend growing of both small and large stores who will give you a discount if you pay in cash. In Houston, Spec’s Wines Spirits and Finer Foods will give you a 5% discount, our foundation repair company promised us a 3% discount if we pay in cash, and I even passed a gas station several months ago that gives a price for people paying in cash versus paying with credit.
- Showers and Raffles at Work are a Pain. I work in an office with several hundred people and there are always baby showers, bridal showers, retirement parties, birthday lunches, and the occasional raffle auction going on. It is always a struggle to get money together for these events because I don’t carry around cash, and the donation amount is typically not worth going to an atm.
- Parking at Events Isn’t Fun. Many venues have machines where you can take a parking pass to and pay with your credit card. But I am here to tell you that several do not, and it is not fun to get stuck in a line of cars with no cash.
- Playing Toll Chicken. Have you ever had that slightly sick feeling in your stomach because you didn’t know if the toll you were about to go through (and could not avoid) accepts something other than credit cards and EZ Passes? Once when I was a teenager this happened to me and I had to go into the red brick building that is connected to many of these toll booths and fill out a form so that they could send me a bill for the toll.
- Incidental Purchases are Embarassing. It is hard to look someone in the eye when your total is $0.55 at CVS (I play the drugstore game), or $1.29 at a convenience store and you whip out your credit card to pay. Merchants have to pay a fee for each credit card transaction, and these fees can make small purchases completely void of profit.
- Meeting Minimums is Annoying. There is a cafeteria downstairs where I work and they have instituted a $5 minimum charge for credit card purchases (for the reason stated above). While I completely understand the need to do this, it is quite annoying to have to add on a candy bar, two drinks, and a muffin in order to get that bag of chips afternoon snack you really wanted. The same happens at non-chain convenience stores.
You would think that all of these inconveniences would change my habit of not carrying at least $10-$20, but sadly it has not. If I ever do change my habit, I will certainly let you know why and how!
Do you carry cash? How much?
For #6: Last I knew, it was against their agreement with the CC companies to have a minimum. If you feel like using your card, you could remind them of that.
Interesting–I will have to check the policy on that. Thanks for sharing!
It’s against policy, but I’ve read that it’s hardly enforced–people have reported merchants that require minimums directly to credit card companies, and no action is ever taken.
I’m curious to hear about any cases where the credit card company did take action.
Amanda made some good day-today reasons to carry cash.
I spent September 2005 in Mississippi responding to Hurricane Katrina. If you need to buy things in a disaster zone, cash is king.
I’m a northerner and didn’t fully appreciate this issue, having worked Midwest floods and tornadoes. A hurricane causes damage over much larger areas. That means telecommunications and electrical power go down for hundreds and thousands of square miles. Without telecom or electricity, ATMs and credit card verification don’t happen. It isn’t just natural disasters that can restrict financial access – think about cyber attacks, “bank holidays” or an unusual account activity freeze that you can’t get immediately lifted.
I tripled my day-to-day wallet cash after that experience and always carry enough cash to get home when travelling.
If you are engaged enough to be following a financial blog, you should have the foresight to plan for the unknown.
What an experience that must have been! I was in Houston for Hurricane Ike (2008), and we lost power for two weeks. Fortunately most of the merchant places and banks opened up just a week afterwards. Ofcourse, Katrina was a much larger and more devastating hurricane if I remember correctly. Thank you for sharing your experience!
I thought it was against the policy of the credit card companies for businesses to have minimum purchase requirements, no?
I am not sure. I would have to look into it–thank you for mentioning!
I am sorry, but that is really selfish. Not only do you inconvenience merchants (some of whom probably lose money on a small enough charge sale thanks to their fees), you inconvenience the people behind you who have to wait for the whole electronic process to complete before you can sign and leave. I doubt I am alone in thinking, when I’m on a line and see someone whip out a charge card to pay for a can of soda, “What a pathetic loser”. If you are mature enough to juggle all that automated bill-paying, you are mature enough to keep a couple hundred dollars in $10 bills in an envelope in your house somewhere; when you leave in the morning, shove one of them in your wallet and you won’t have this problem. But the reality is, you sound sort of proud of your affliction, so you probably won’t do anything about it.
Thank you for your opinion. I am of the opinion that people are allowed to use whatever payment they wish, so long as the merchant accepts it. Also, most places now have that if you pay with a credit card for something that is under $20, you no longer need to sign.
However, I do realize that merchants can lose out on this deal, and would like to change that.
Don’t forget if you need a tow on the side of the highway, most only accept cash only.
I do not want to go to a cash less society but it seems inevitable. You cannot even bring a $50 to McDonalds or Dunkin Donuts without them looking at you and calling you crazy. “We only accept $20’s”.
This is getting out of hand.
Great information about towing! Fortunately we have Triple AAA (which we had to take advantage of recently when our second car broke down).
Thank you for your thoughts!
We use our credit cards for everything (so we can double check our spending), but I do carry $3-$4 in quarters so if my total at Walgreens or RiteAid is less than $1 I can pay with cash.
That seems like a great solution. I play the drugstore game and often have amounts under $1.
I admit, I just don’t carry cash. I should because I find myself parking at places that only accept cash. It’s something I definitely need to work on.
I am glad I’m not alone:).
I withdraw $100 cash at the beginning of the month to carry in my wallet and cover most of the things you listed. I also have the teenager daughter who tends to come to me 15 minutes before leaving for work needing $5 to $30 for some school activity.
Weird thing is I often have $40 left in my wallet at the end of that month. Using money seems almost like a strange payment method.
Wow. I acutally use cash for most daily purchases and save my credit card for gas/groceries and big purchases. Cash makes it easier for me to keep my everyday spending under control. If my money is gone that means no coffee at Starbucks this week, but in most cases I find cash actually allows me to save money. At any moment I can open my wallet and check on my spending to decide whether I really need that $1 pack of gum today.
Other reasons to carry cash is that there are somethings you can’t buy without it, like a used car or funiture (think of the many things people post on Craigslist) Individual sellers could have something like Square, but many do not, and most people won’t take personal checks (to much fraud). What if your selected merchant is unable to take credit and debit cards due to something like a computer glitch or power outage. As they say “Money talks… ” and most of the time they mean cash.