Cash vs Plastic

Plastic has become the preferred method of payment for Americans in almost every retail situation. We are all familiar with the convenience of credit and debit cards. They also offer protection by requiring a signature, and often times a picture, from the card carrier before completing a purchase. Credit card fraud is usually covered at 100%, making worries about false purchases or identity theft trivial.

There’s no denying that the case for using plastic is strong. However, there are still a few situations where opening your piggy bank and using cold hard cash is preferable. Here are three instances where cash money just may be a better choice:

Cash for a budget –

There have been many different studies that compared plastic and cash spending behavior. The findings are uniform in their decree that EVERYONE spends more when they use a card. The strongest theory for explaining this is the disassociation factor; most people don’t feel as if they are actually parting with their money when they swipe a card, especially if the bill isn’t due for several weeks.

Paying cash to stick to a budget is like counting calories to maintain your weight. It forces discipline by making you immediately aware of where your money is going.

Cash for mom and pop or farmers market -

There is a growing trend in America to shop and dine locally, and many small grocers and restaurant owners are feeling the benefits. For some of us, motivation to populate local businesses is fueled by a desire to support the ‘little guy’ before the larger corporations. If this is your drive, using cash will only strengthen your purpose. Banks impose fairly steep fees on merchants that accept plastic. For the smaller businesses, these fees can really add up. In some cases more than 3% of your purchase is going to the bank instead of your local deli’s bottom line. Using cash will ensure that your entire purchase goes to support your local shopping and dining establishments.

Cash for returns

Really like those towels but not sure they will match your bathroom colors? Buy with cash to avoid waiting for transactions to clear on your credit card. If you have to return the towels, paying with cash will guarantee you get your full refund right away.