Cash or Card?: Why the Green Stuff Should Still Have a Place in Your Wallet

Why the Green Stuff Should Still Have a Place in Your Wallet

I laid my credit card on the table in anticipation of the bill for the delicious, authentic Chinese lunch a friend and I had completely devoured. A few short minutes later, our waiter curtly told me cards were not accepted. Cash only.

I was flabbergasted – and horribly embarrassed. In our haste to sit down and eat, we had both completely ignored the signs that were posted all over the restaurant.

So while she stayed put, reassuring our waiter that I would be back after a run to the ATM – one that was at least 10 blocks away — I sprinted to get enough cash to cover the bill.

According to a survey conducted last year by Bankrate, many people would have found themselves in a similar predicament. In fact, 40% of survey respondents carry less than $20 in cash and an additional 9% carry no cash at all.

But after stomaching both the ATM fee plus the additional fee from my bank for using an out-of-network ATM, I was committed to never finding myself in a similar situation again.

If you’ve been subscribing to the all card trend, here are just a few reasons cash should still have a place in your wallet.

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Cash can’t get hacked.

In 2005, TJ Maxx stores reported that hackers had managed to steal the credit card information from 94 million customers. In 2013, Target systems were compromised and 40 million customers were impacted. In 2014, Home Depot discovered that 56 million credit cards and 53 million email addresses fell into the hands of hackers.

What’s the moral of the story? Cards come with the very real possibility that your information, money, or identity can be stolen – and that is a very scary thing.

Don’t get me wrong, I’m not saying avoid cards altogether. But if you are dealing with a restaurant or retailer you fear might not be secure, cash can at least prevent the pain of identity theft down the road.

Some vendors have a minimum charge for using a card.

Walk into a gas station with the intent to buy a pack of gum and you might just be required to purchase more in order to be able to use your card.

When merchants run a credit transaction, they are charged a fee, which can quickly eat away at the profits earned from small purchases. In 2010, retailers and small businesses banded together to get a piece of legislation allowing the establishment of minimum purchase requirements added to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

This small piece of a massive bill went largely unnoticed, but it provides a very real reason for consumers to carry at least a small amount of cash at all times – otherwise a $1 pack of gum can quickly turn into a $10 purchase.

Cash could help you stay on top of your budget.

Have you ever heard of envelope budgeting? This money management system subscribes to the idea that physically separating money into categories and putting a halt to spending once all cash in that envelope is gone, helps keep budgets on track.

With this type of budgeting you don’t need to sort through your credit card charges each month, waiting with bated breath to see which categories you went overboard with – you already know.

If you are having trouble sticking to a budget, or if you like to visually see where you are at any given point during the month, this is a great old-school approach that can actually work.

Getting cash on the fly is expensive.

Despite the fact that we are living in a digital age, not every merchant takes cards – as I quickly learned with my Chinese food debacle. And, unfortunately, when you encounter these merchants without any cash in your wallet, you will have to pay handsomely for the ability to get cash on the fly.

How much exactly? A new survey finds the average number inching closer to $5 for out-of-network ATMs – a staggering amount if you’re only trying to pull out, say, $20. Not to mention the inconvenience of finding an ATM if you’re in an area where they aren’t on every street corner.

Regardless of the situation, it will always be easier to have the cash on hand. Period.

A little bit can go a long way.

If you can’t seem to subscribe to cash for budgeting purposes, it can still be hugely beneficial to have even a small amount of cash on hand should any situation arise that credit cards can’t solve. Take my word for it.

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