#208 Saying goodbye to cash

More and more we aren't using cash to pay for our purchases.  Buying gasoline, groceries, clothes, utility payments or any other purchase can be done by credit card and increasingly, by debiting our bank account.  Don't buy stock in check printing companies!  They too will soon be just like typewriter, vinyl record and buggy whip producers.   As with most advances, allowing the ease of purchase brings its own share of problems.   People have no clue whether they have enough money to pay for the purchases they made.  The AVERAGE credit card debt in the US (as of January 2012) is just shy of $16,000!  Seems like debiting your bank account may be the better way to go.

There are lots of new ways to pay for things.  We have an EZ pass box that lets us zip through toll booths in the Eastern United States.  Our checking account is debited every time we don't stop.  Another new technology that is about to revolutionize payments is near-field communication (NFC).   With a NFC set up on your cell phone you just have to pass the phone near a check out system and your payment is made.  Don't have to get that pesky card out of your wallet any more.  This technology actually sounds very scary to me.  You could be buying up everything in sight just by walking by a store!  Good news is that this new Digital Wallet isn't catching on too fast because it really doesn't help the merchant much.  They have much less control over the actual purchase verification and though it might speed up the check out, it may lead to credit issues down the road.  Lets see how this one plays out.

Every transaction that isn't cash has a fee associated with it.  Credit card fees are usually charged to the merchant.  Same with debit card fees.  I wonder how soon until you end up paying a fee for every transaction?  You know the credit card companies would love to do that.  You actually are paying for the fees even if you don't see them.  Merchants know what percentage of their sales are credit card (going up every day) and just add the 1-3% Credit card fee to the purchase price.  The average American spend $429 each year in hidden credit card fees.  Unfortunately even if you go back to cash, you will still be paying that same hidden fee.  Paying in cash does help the merchant though!  They get the same amount of money and DON'T have to pay the Credit Card company.  Thus why many small stores offer a cash discount.

I think I'll miss my check book and having to balance it.....