Why You Should Ditch the Cards and Use Cash

Man holding cash

Everybody has heard the term “cash is king”, but have you ever really thought about the benefits of using cash? We have become connected to our credit and debit cards, and sometimes we don’t realize that we have some bad spending habits. When we don’t actually see the money leaving our hand, we tend to spend more than we want. You should still have a credit or debit card for emergencies, but I’m going to give you some reasons why you should primarily be using cash.

Avoid Transaction Fees

Card readers are not free for companies to use. They pay someone else to process the cards, and that comes with a fee. Have you ever been hit with a fee at an ATM? It is essentially the same thing. The issue is that some companies, specifically smaller companies, will pass that fee on to you. They are often referred to as convenience fees, and can either be a set amount like a $2 fee, or a percentage of the total cost. Carrying cash with you can save you money at companies like this.

Not Every Place Accepts Cards

This is not as common in larger cities, but after moving to a tiny town of 3,500 people this past year, the one thing I have learned is that not every place accepts cards, so you better have some cash on you. This could happen on a road trip or vacation and it is always just better to be prepared. I’m not recommending that you carry thousands of dollars in your pocket, but a couple $20 bills should be enough for an emergency.

You Spend More When You Pay With a Card

You may not know it, but when you pay with a credit or debit card, you statistically spend more money than when you pay with cash. According to Value Penguin, people are willing to spend up to 83% more when paying with a credit card. Many think that this is because you don’t feel the same connection to the money in your account as you do the money in your wallet. It is the same reason why many restaurants leave off the dollar sign next to the price.

Cheeseburger – 8

Cheeseburger -$8

Little things like this can subconsciously have an effect on your spending habits, and spending with a card has the same effect.

You Set a Spending Limit

If I walk out the door and only have $40 on me, then I can only spend $40 right? Most places will not give you something unless you pay, that’s pretty obvious. Limiting yourself to cash will force you to save money and spend wisely. You should still have some kind of card with you because emergencies do happen. But you should make it a habit to only use your cash if you can.

Cash Can’t Be Hacked

When you use cash, you don’t have to worry about someone stealing your information. Credit card theft is a huge problem, and they are getting sneakier with the hidden card scanners and hacking techniques. When you use cash, there is no way for your information to be taken. Obviously you can still lose your money or get it taken, but I would say the chances of that are far less likely.

You Get Change

One of my favorite parts about spending cash is that you get back change. I use it almost as an extra savings account. When you get your change back you can throw it into a cup. Basically, it is there and not there at the same time. You have it if you really need it, but you do your best not to touch it. After time it will really add up. With the amount of Americans that live paycheck to paycheck, your change can be a good way to have some money in the case of an emergency.

Thanks for Reading!

I hope you enjoyed this post! Let me know in the comments if you prefer cash or card, and whether or not you plan on using cash from now on. Obviously there are certain times when you should use a card and certain times to use cash, they both have their own pros and cons.

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