It may seem very old-fashioned to carry and use cash for day to day purchases, but making the decision to be unbanked (using cash instead of debit cards) is actually a very good thing. There are many advantages to using cash in lieu of a debit card or a credit card. With the state of the current economy, more and more people are making the decision to live without using plastic. These are some of the advantages to using cash over debit cards or credit cards.
Know what you are spending
When using cash to make purchases, individuals tend to think more about their purchases before making the purchase. This means that money that might have easily be spent using plastic might be saved instead. In addition, sticking to just the cash that you have in hand means that you will not be able to overspend. Additionally, in many families, more than one person has a debit card on the same account and sticking to cash will mean that overdrafts on the account because of breaches in communication will not occur because neither person is using the debit card to access money.
The common use of plastic to pay for purchases has led to a huge increase in theft, both identity and of money. By leaving the plastic at home, the risk of theft is minimized. If a thief is able to steal the money that you have on your person, they are simply limited to the money that you have in hand. However, if they are able to steal your debit card, they can easily drain your checking account before you even realize that your card is missing. Additionally, if they are able to get control of a credit card, they can max out the credit card in just a matter of minutes. Not only is gaining physical control of a debit or credit card a way of having your financial information stolen. Thieves have become savvy and card information can be stolen from just swiping a card at the gas pump if a thief has put a card skimmer on the machine.
Easier to save money
Based on the fact that individuals have to think about their spending before making a purchase when living a cash existence, it is easier to build up savings when using cash. In addition to savings by limiting spending, consumers are also able to save money on bank fees for using their debit cards. Some banks charge a fee for using the debit card. In addition to those fees, there are foreign transaction fees for using ATM machines that are not a part of their network. Finally, the fees for an overdraft on a checking account are very high and it is easy to overdraft a checking account using a debit card if a consumer is not vigilant about their record keeping. This becomes even more of a problem with a checking account where two or more people have access to debit cards linked to the account.
Making the adjustment from living a life where a person always pulls out their debit card to pay for their purchases to only using cash will be difficult at first. However, the difficulty that they face at first will be well worth it as they get used to using cash. The advantages of using cash in lieu of debit cards will last throughout the person’s life.