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Going Cashless

Once upon a time, cash was ubiquitous amongst common folk and “charging it” was reserved for the rich, fancy-pants type. Now, most Americans are paying less by paper and coin and more often in credit card, debit card, online transaction, and even up-and-coming mobile phone payments.

MintLife Blog writes that the future of money is the age of the cashless, as the rise of debit cards in the mid-1900s signaled the decline of paper checks and cash. Today, the fall of cash is speeding up thanks to increased credit card use and the introduction of mobile transactions via Smartphone, reports Daily Finance. Down the road, paying by cell phone may force credit cards to go the way of cash.

It’s unlikely that you’ll make a definitive lifestyle change to go all plastic, but it’s interesting to see the perks and precautions if you did decide to go all-cash instead. If you decide to go with either extreme and ditch cash or plastic, be sure to comment and let us know how it’s going.

Going All-Cash

• Perk: Imagine life without debt. If you go all cash, you can’t get in over your head with debt if you aren’t swiping more on credit than you have actual money in the bank. Plus, budgeting strategies like the cash envelope system is a simple way to keep track of expenses and restrict spending.
• Precaution: If you don’t use credit, you won’t build credit. A great credit score and comprehensive credit report is crucial for a healthy financial life because it gives access to loans, credit, and is looked at by employers, landlords, etc. Without credit, you’re limited in your financial options.
• Perk: You avoid pesky fees and sneaky banking practices. You won’t be subject to the ups and downs of the credit card industry and won’t have to worry about interest rate hikes or surprise charges if you steer clear of using plastic altogether.
• Precaution: You’ll give up some convenience. Carrying hundreds of dollars on you for every shopping trip or big ticket purchase is not only inconvenient, but can also put you at greater risk of theft. Plus, you’ll have to make constant trips back and forth to the bank.
• Perk: How would you like less stress? Cash-only means you will potentially have no debt fears looming over you, no credit card bills to be anxious about, and you’ll learn to manage money so that you are in control of it, rather than the other way around.
• Precaution: With no credit or debit card, you can’t benefit from any cash back or rewards program. If you look forward to getting cash rebates, airline miles, or rewards points for every time you spend, it may not be worth it to you to go without plastic cold turkey.

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