I read a recent article with 7 reasons why we’ll always need cash. It was less than convincing. Some rebuttals for the article’s arguments:
You need cash when dealing with the smallest businesses. These smallest businesses need to understand that being cash-only is limiting their customer base and inconveniencing the customers they do have. They need to accept that CC processing fees are a cost of business and set their prices accordingly. If they cannot compete, they must re-evaluate what makes their product, service, or location advantageous. If they don’t have a reason to be advantaged, they will not stay in business. This is why they are the smallest.
You should live off cash when you have a tight budget. I disagree with this. The worst spenders will simply run through all their cash and wonder, “Where did it all go?” and they won’t know. The answer is to use a credit card or debit card and log every receipt every day in financial software, whether it be Mint.com, MS Money, or (ugh) Quicken. No one save cash receipts, if they even get one. Then, once logged, you need to look at the numbers in front of your face and think about them. At the end of each month, run the reports that show where the money goes. Knowledge is power.
You’ll need cash when technology fails. The example given is paying via phone NFC, but the article ignores that credit card processing is much more robust. There’s a difference between BK saying “our credit card machines are down” and your mechanic saying the same. In the first case, you just drive down the road to McD’s. In the second case, there will be a manual “knuckle-buster” machine to process your card. If a business wants (and deserves) your money, they will have a manual way to get it.
You need cash in case of emergency. This one is kind of hard to dispute, especially seeing how people love taking advantage of others in trouble. However, emergency doesn’t mean you are helpless. You have options available to you. All you have to do is ask if they take credit cards. If not, move on.
You need cash when you need to remain anonymous. The article uses a quote that explicitly says “maybe as a way to avoid taxes”. I shouldn’t need to give a rebuttal.
You need cash when you depend on tips. The article again suggests that cash is good for misreporting income for taxes.
You need cash for the homeless. This is because you can’t hand a credit card to a homeless person and have them charge you a couple bucks. And supposedly also because most charities don’t accept cards when they are out on the street. However, it is possible to donate through a website or PayPal. And if you really want to help the homeless, buy them a meal or give them a blanket or clothing.
So overall, it’s not so much a list of reasons why we’ll always need cash, but more of a list of weak excuses why we haven’t completely gone cashless.