Obglatory not OP, but… When I was younger and pretty broke I preferred paying cash. It was very easy to keep track of my spending rate and there was no risk of getting declined.
Interestingly I read somewhere (from a Behavioral Economics book, I think) that people who pay in cash in average spend less than people who pay by card.
Paying cash involves literally giving out something physical which you own, whilst paying by card is just a number in a screen that you say yes to, and it’s theorized that the actually parting with something physical like cash makes people more wary of spending because of the higher unpleasent feeling of losing something.
Certainly looking at myself, actually counting and giving away €100 in notes does feel more unpleasant that merelly saying yes to a screen showing the number 100.
All this to say that for poor people it actually makes even more sense to pay in cash.
That’s exactly why I preferred cash when I was in my 20s, but there’s a catch. Completely avoiding the credit system isn’t good for longer term finance either. In the US at least, no credit can be worse than bad credit. This makes it hard to escape the poverty trap even if you get finances are in order.
There’s another catch if you’re not using a card with rewards. (As I understand it this is mostly a U.S. thing, other countries don’t do this.)
Every year when I take my big vacation my wife and I get 1-1.5 of our international business class tickets paid for by rewards on one card and about half of our hotel suites (about 10-11 nights) paid for by rewards on another card. If you’re paying cash or using a card without rewards, you’re paying for my vacation.
Places with different prices for cash and cards are vanishingly rare. Mostly because card processing companies try to penalize places that do this. So everyone pays higher prices to pay for the higher processing fees for reward cards. If you aren’t getting something back you’re just paying for people that are.
I have to wonder what kind of child hears someone say that they pay in cash rather than use a card and assume that they’re rich.
I have to imagine you are so fiscally deficient that the 2% or so card transaction fee doesn’t even register to you. Did you know that especially some Mom and Pop shops will charge less when using cash for that very reason? Gas stations even advertise cash rates for gas.
Not in my experience. There is a credit card fee, but the stores pay it. I’ve heard of places offering a cash discount for that reason, but haven’t seen it in years. If you paid cash now, you’d just be paying the credit card price.
you have never been poor, have you?
Obglatory not OP, but… When I was younger and pretty broke I preferred paying cash. It was very easy to keep track of my spending rate and there was no risk of getting declined.
Interestingly I read somewhere (from a Behavioral Economics book, I think) that people who pay in cash in average spend less than people who pay by card.
Paying cash involves literally giving out something physical which you own, whilst paying by card is just a number in a screen that you say yes to, and it’s theorized that the actually parting with something physical like cash makes people more wary of spending because of the higher unpleasent feeling of losing something.
Certainly looking at myself, actually counting and giving away €100 in notes does feel more unpleasant that merelly saying yes to a screen showing the number 100.
All this to say that for poor people it actually makes even more sense to pay in cash.
That’s exactly why I preferred cash when I was in my 20s, but there’s a catch. Completely avoiding the credit system isn’t good for longer term finance either. In the US at least, no credit can be worse than bad credit. This makes it hard to escape the poverty trap even if you get finances are in order.
There’s another catch if you’re not using a card with rewards. (As I understand it this is mostly a U.S. thing, other countries don’t do this.)
Every year when I take my big vacation my wife and I get 1-1.5 of our international business class tickets paid for by rewards on one card and about half of our hotel suites (about 10-11 nights) paid for by rewards on another card. If you’re paying cash or using a card without rewards, you’re paying for my vacation.
Places with different prices for cash and cards are vanishingly rare. Mostly because card processing companies try to penalize places that do this. So everyone pays higher prices to pay for the higher processing fees for reward cards. If you aren’t getting something back you’re just paying for people that are.
I have to wonder what kind of child hears someone say that they pay in cash rather than use a card and assume that they’re rich.
I have to imagine you are so fiscally deficient that the 2% or so card transaction fee doesn’t even register to you. Did you know that especially some Mom and Pop shops will charge less when using cash for that very reason? Gas stations even advertise cash rates for gas.
Ignorance and arrogance are a horrible combo.
I’ve never seen a shop have different prices for different payment methods in my life.
Is that an America thing?
Not in my experience. There is a credit card fee, but the stores pay it. I’ve heard of places offering a cash discount for that reason, but haven’t seen it in years. If you paid cash now, you’d just be paying the credit card price.
I only see this at gas stations and rural restaurants now in the US southwest.
Yeah I definitely have seen it as gas stations in the past, I can’t recall seeing it lately.
If you remember computer shows, the vendors there would often show a cash price and then charge more for cards.
I thought doing that sort of thing was against their merchant agreement though. But maybe not.
No, I live in New Zealand, and a 2% surcharge for credit cards is pretty common.
EFTPOS transactions are always free.
Have been. Still not rich.
Money is very physical. When you give it away you can see that there is less remaining. Helps to keep track of your expenses.