5 Reasons to Choose Paper Over Plastic

8125974243_f6ce8726f2Image Credit: Tax Credits

If you are anything like the thousands of customers who were spooked by the recent Target security breach, you’re probably wondering if cash is back in style. It doesn’t come with the convenience of a credit card, but it does come with the extremely important ability to protect your personal information. Financial experts have noted that the majority of shoppers, although concerned about possible fraud, have not stopped using their credit cards altogether.

It has been shown, however, that at least some Americans have switched back to carrying cash at all times, and this change started even before the infamous Target breach. With the widespread, lightning speed increase of the use of technology in virtually every corner of the world, consumers have very valid fears about the possibility of having their information stolen. With the deluge of stories on the news about identity theft and credit card fraud, plenty of people have chosen paper over plastic.

Keeping your personal information safe is just one of many reasons that cash is back in style.

Money Mindfulness

Spending cash only allows customers to physically see the money leaving their hands with every purchase. For many, this means that spending dollar bills instead of swiping a piece of plastic will actually help them spend less. Sometimes that little piece of plastic can feel like magic, and can cause a denial about how much is actually being spent.

For people who really need to gain control of their spending habits, instilling a cash only policy is a great idea. It is very easy to set yourself a spending budget for the week when you’re only allowed to spend cash. Withdraw a reasonable amount of cash once a week, use only that money for casual spending, and you’ll quickly realize that you’re putting much more thought into each purchase.

Small Business Appreciation and Awareness

More and more Americans have become increasingly loyal to their local mom-and-pop stores, wanting to help small businesses succeed as much as possible. And, while this is a fantastic shift away from throwing more and more money at big-box retailers, handing a credit card over to your local mom-and-pop store owner negates your small business loyalty a bit. Remember that every time you use your credit card, around 3% of your purchase amount goes directly to the bank instead of to the store owners. Paying in cash helps small business owners avoid the outlandish fees they are charged by banks just for accepting credit cards.

Negotiating Power

While it’s true that you won’t be able to negotiate for every purchase you make, it’s much easier to haggle when you have a fistful of cash to wave around. This is especially true if you do a lot of shopping at flea markets, farmers markets, thrift stores and independently owned small businesses. Any place where the actual business owner is present is a great place to negotiate. These types of sellers are not controlled by a corporation, and can raise or lower their prices as they so desire. And, as mentioned above, they’re motivated by cash so that they can avoid those outrageous credit card fees (also known as interchange fees).

Showing Gratitude for Good Service

Whenever possible, try to bring cash with you to establishments where you know you’ll be expected to leave a tip. Some of the most common places to leave a tip include restaurants, salons, hotels, airports, and anywhere with valet parking.

Many people can and do tip using their credit card, however, this does not benefit the tip recipient nearly as much as when they get paid in cash. For example, waiters and wait staff are often required to pool their tips and then redistribute it evenly amongst the entire staff at the end of the night. Although it would require that your server pocket the extra cash you leave, if you have experienced exemplary service, it may be a good idea to give them a little kickback.

As a general rule, wages within the service industry still remain too low. Many of these workers simply depend on tips to boost their income up to a respectable level. Some locations only distribute tips that were left by credit card on a weekly basis. For those workers who are living paycheck to paycheck, leaving their shift with a wad of cash can really make a difference in their day-to-day lives.

Credit cards definitely still have their place in today’s spending world. Of course, there are pros and cons to everything, including paying with credit. We’re not saying that you should go dump all of the cards out of your wallet and cut them up; but do use them wisely and sparingly. We all know the phrase “Money talks,” but remember that you have a say, too.

6 Responses to 5 Reasons to Choose Paper Over Plastic

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