America is loosening its grip on its centuries-old affair with money.
Whether it’s getting a handful of cash at a restaurant or casino, or just getting some coins in your pocket at the hardware store, the old ways of consumer payments are giving way to new ones — and at an accelerating pace.
Consider a recent Pew Research Center survey that showed 41% of Americans say so no one of their purchases in a normal week are paid for using cash. This is up from 29% in 2018 and 24% in 2015.
“Conversely, the share of Americans who say all or nearly all of their purchases are paid for using cash in a typical week has steadily declined, from 24% in 2015 to 18% in 2018 to 14% today,” the report stated. . However, nearly six in ten Americans (59%) say that in a typical week, at least some of their purchases are paid for using cash.
Is cash on its way out?
Most Americans still like to have cash on hand when they walk out the door.
The Pew survey reported that nearly 58% of Americans like to have some cash with them in public, compared to 42% of consumers who don’t care whether or not they have cash with them when making a purchase.
Certainly, Hurricane Ian points to the fragility of electronic payments in a natural disaster.
“When the electricity goes out and the computers don’t work, we still need cash to conduct business transactions, whether to buy essentials, buy gasoline for a generator or start a business,” said Gerard Felite, senior advisor to The Lawfare Project. “It is also worth remembering that not all disasters are natural; wars and domestic instability demonstrate the need for cash (preferably denominated in US dollars) as an essential asset for survival.”
Other push experts point to the dark shadows of the US economy, especially financial fraud. In those scenarios, cash is paramount over digital payments.
“One of the fastest-rising crimes that is growing even faster in America is identity theft,” said Oak View Group Certified Public Accountant Levon Galstian, a Certified Public Accountant at Oak View. “It is closely related to the increased use of electronic payment methods and the storage of financial information online.”
Galstian noted that the strongest defense against identity theft in some financial transactions, and perhaps even with some businesses, is cash payments.
“The benefit of using cash is that there are no paper trails,” he said. “Cash largely eliminates the possibility of identity theft because no information is left to the seller or merchant, even while it may reduce the chance of recovering a defective or substandard good or service.”
Cash also protects consumers who worry about transactions in a world where consumers increasingly monitor (and monitor) their daily spending.
“Whether it’s a personal indulgence that one wants to keep a secret, or a medical procedure that is prohibited by some (but not all) countries, there is a certain level of comfort in being able to live at least part of your life in relative privacy,” Feletti said.
How much cash should you carry?
While the digital payment sector is making significant headway for cash in commerce, American consumers who value filling a wallet or pocket with cash may be wondering how much cash they really have to carry these days.
After all, you never know when a merchant might want to get paid for digital payments.
On a daily basis, $20 is a good number for a small “spend” like pick-up at a yard sale, plus tips after 18 holes of golf or after your nails are done. Depending on your lifestyle, target what you really need – for example, $100 or more in cash if you tend to have a higher income and tend to spend more money.
“I always make sure my wife and I have $100 in cash on hand at all times,” said Childfree Wealth founder Jay Zygmont. “It may be old-fashioned but having cash can help you in an emergency, and it may give you bargaining power.”
For example, a storm destroyed the credit card machines at the local gas station, but they were still selling gas for cash, Zygmont said. “Having cash on hand meant we could get gas for our cars and generators, while others couldn’t,” he told TheStreet.
It’s not just about having cash on hand. Having a few bills at home also makes sense.
“It is safe to carry between $100 and $300 in cash in your wallet,” Galstian said. “But also keep a backup of about $1,000 in your home. A few hundred dollars may or may not be enough to cover your daily expenses, depending on your spending patterns. So, have $1,000 to $2,000 in cash if banking is suspended due to an accident. sudden like a disaster or a national emergency.”
Cash hasn’t gone down yet
Historically, cash worked best at a yard sale or on a big city street, like getting a sausage from a vendor.
“Partly because the cash transaction provides a measure of reassurance that your daily life won’t be disrupted if your card number or bank account is compromised,” Feletti said.
In this regard, criticism is far from dead.
“Whether it’s a few hundred dollars in a wallet for occasional matters or a few thousand dollars in a safe for real emergencies, there is still great value in having cash on hand,” Feletti noted.