I’ll be the first to admit that this post was inspired by the results of a recent poll I found in my favorite personal finance magazine, Money Magazine.
I’m sure you’ve seen the credit card commercials where everyone swipes their cards for payment and then one guy pulls out cash and the whole entire business grinds to a halt. I don’t know if it is just me, my generation or everyone in general, but cash seems to become less and less popular every single year.
I personally use my credit card whenever I can to earn cash back or rewards but I do normally still carry a little bit of cash on me. Why?
Reasons To Still Carry Cash
There are still some businesses that refuse to catch up with the times and will not accept credit cards. Others will put a minimum spending amount for a credit card transaction. These realities almost requires us to still carry cash around.
*Drifting off the path* Why do some merchants not accept credit cards? Credit cards charge businesses fees in order to accept them. The consumer probably ends up paying for the fees through increased prices, but very few consumers realize this. *Back to the article*
There are other situations where cash can come in handy. Chances are that if you’re conducting a private transaction such as at a flea market, farmer’s market or with someone on craigslist, the person will probably only want to be paid in cash. They probably wouldn’t have the capability to be paid by credit card and they definitely wouldn’t want to accept checks because who knows if it will clear or not. Everyone knows that checks began phasing out well before cash started to become unpopular, if they’ve even seen a check.
Other Reasons Cash Hasn’t Died Yet
Cash is still a very popular form of payment for tipping both in restaurants and in other situations. I know when we go on cruises we prepay most of our gratuities, but if someone goes above and beyond while serving us they might find some extra cash headed their way. Cash allows us to tip people that we wouldn’t pay for any other reason, such as porters who take your bags. Good luck getting them to run your credit card for a tip.
There are some less than savory reasons why cash is still pretty popular these days too. Cash is, for the most part, untraceable. By being untraceable, some business will take advantage and not report their cash earnings on their tax returns to cheat and save some money. It isn’t right and I suggest you pay every penny in taxes you owe, but it does happen.
That’s not all, there are many illegal activities that rely on cash for the fact that it is untraceable. I won’t name anything in particular, but I’m sure you’ve thought of at least 3 types of activities that will only accept cash for these reasons.
Finally, another reason to use cash and the fact that it is untraceable is bribes. Bribing is illegal in most places, but in some countries entire processes almost require bribes in order to get anything done.
How Much Cash Do You Carry?
So now that I’ve gone over some of the various uses of cash, I want to know one simple thing. How much cash do you carry on a regular basis?
In case you were wondering what the results of the poll were in Money Magazine, here is a brief summary.
- 42% of people surveyed carry only $1 to $40 of cash.
- 30% of people surveyed carry $41 to $99 of cash.
- 17% of people surveyed carry $100 to $199 of cash.
- 11% of people surveyed carry $200 or more of cash.
Personally, I normally fall into the $1 to $40 range but occasionally will bump up into the $41 to $99 of cash if someone pays me for something in cash. I can only think of a handful of times I’ve ever had $200 or more of cash.
Let me know how much cash you normally carry in the comments below!