Cash Money: what’s the point?

Please don’t think I’m questioning the existence of money based on the title.  This is something that has been discussed my circle for years, and needs to be shared and discussed with you.

The title says it all: ‘cash money: what’s the point?’  The title suggests that we, as money loving people, should question the existence of paper money, such as cash, checks, money orders, etc.

Cash has been a part of everyone’s life for as long as we’ve been alive.  When many of us were younger, we were thrilled when we earned our monthly allowance.  I used to get $5-$10 for an allowance; that five or ten dollar bill was a prized possession which was spent on the finest baseball cards at the time.   As we’ve grown older, we learn about credit and check cards.  With this tool at our disposal, cash was no longer necessary to have on hand anymore.

With online banking becoming increasingly popular, giving each person the ability to track what they spend their money on, more people have quit carrying cash on hand.  Are people more financially responsible if they can see exactly what they spend their money on versus saving each receipt from each purchase?  It’s quite shocking for me to see how much money would go to bar tabs or eating out.  If all of those outings were paid with cash, it would be more difficult to track where my money went to.

Here’s the problem: some establishments still consider cash as the number one option.  Why?  Most rental companies require cash or check.  Chase Auto Finance essentially forces you to send in a check since they won’t allow you to pay more than the minimum online while adding on a hefty fee for online payment.  Parking lots and meters still rely on quarters and cash.  Wouldn’t life be more simple if credit/debit card was the universal method of payment?

I remember in college, every Thursday night, our group would have to make a trip to the atm to get cash; none of the downtown bars accepted credit card.  We always felt that was an unnecessary trip to take, distracting us from the ‘social networking’ we wanted to participate in.  Why wouldn’t the bars just take a card for a payment? Money has the same value whether it’s cash, check, or card.  Why not make it easier for the customer and accept cards?

Let’s take a look at the best evidence I have for my argument against cash.  In this video, we see a well-oiled food service operation.  Notice how everything is working like clockwork.  Food and plates are flying, bottles are being thrown, and the place is full of people; it looks almost chaotic.  However, everything continues to flow well because all the customers are paying with their Visa Check Cards.  All is well until our meek little friend pulls his wallet out and pulls out some green stuff.  He stops the flow, which leads to a domino effect of epic failure; the whole operation comes to a complete hault.  Meek cash guy gets his change, the next customer uses the Visa, and the operation is up and running successfully once again.

So many issues come up when cash, check, or money orders are involved.  I pay my monthly car payment via check to Chase, due every month on the 4th.  In order to hope it arrives on time, I need to send it at least five days prior to the due date.  There’s no guarantee that my payment will arrive by the due date.  If the USPS doesn’t get the payment to Chase on time, I get a late fee.  I did my part in sending it days in advance; something beyond my control made the payment late, and I get punished.  Not only would I get a late fee, it could effect my credit rating which would have long term effects on my financial future.  With online payment, you can schedule a payment for the next day, even same day for a fee (some sites allow same day payment without a fee).  Not only is online payment more instant, it’s more secure as well.

Checks are a pain to write, and also to accept.  I’m not complaining about earning a paycheck, I’m commenting on receiving a physical check every week from my employer.  My employer does not do direct deposit for his employees.  Why? Good question.  Because of this business philosophy, I have to inconvenience myself and go to a bank which is always out of the way, take time out of my day to gain control of my money. It would be green of our company to go paperless and not hand out weekly checks; everyone loves a green conscious company.  How many of you have direct deposit?  Of those who have direct deposit, who does not take advantage of that program?

The only reason I have checks: rent (when I paid in school/when I move out in the spring), and car payment.  The only reason I carry cash: parking in downtown Minneapolis.  I have had to drive around downtown Minneapolis to find a parking ramp that would accept credit cards because I did not have any cash on hand. If there weren’t any parking lots that accepted credit cards, does that mean I wouldn’t be able to park anywhere?  Who carries cash on them every day?

Some bar games are realizing what the wave of the future is; Golden Tee and SilverStrike Bowling have new machines that accept credit card payments.  Why can’t the rest of the world adopt plastic as the universal payment method?

My questions to you:

• Do you think that paper money will become obsolete within our lifetime?
• Should there always be the option between cash, check, or credit card?

~Jason Douglas

twitter: @jasondouglas