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9 Reasons Why Cash is Still King, Even Today

Written by prositesfinancialNov 25 • 5 minute read

cash is king

It’s no secret that we live in a digital and debt-driven society. With more aspects of our lives being financed, monthly payments are becoming a huge chunk of most budgets. First it was housing, then it was cars, then college education. Now it’s everything from computers to smartphones, clothing and even food. Credit cards and loans dominate almost every aspect of modern life, but they don’t have to.

There are still a lot of reasons why you might want to get away from using so much plastic and incorporate more cash into your day to day spending habits. Whether you’re trying to reduce your dependence on debt, curb unhealthy spending habits, or get a more visceral handle only your finances, using cash can be beneficial. Here are nine reasons why cash is still king, even in the 21st century.

1. It’s Accepted Everywhere

Believe it or not, there are still a lot of small merchants and vendors who either do not accept cash at all or who strongly prefer it over cards. For example, barbershops and some salons will only accept cash. They may rely on a team of independent employees and want to be able to efficiently distribute proceeds and tips at the end of a workday or workweek. Perhaps they like the fact that people are more likely to give tips if they use cash. Either way, if you want a haircut in many areas, you need cash.

A lot of farmer’s markets and street vendors also only take cash, so if you want to pick up some fresh veggies or bread on your Saturday stroll, you might want to bring along some cash. Most sellers on online classified sites like Craigslist or Facebook Groups only take cash as well. They want to ensure they can depend on the payment being real and prevent being scammed with a bad check or a fake money order.

2. It Can Get You Discounts

There are a lot of sellers who may even offer significant discounts to customers using cash. Some gas stations will post two price lists: one for cash customers, and the other for card customers. This practice is relatively common, and a lot of businesses will give you a discount if you use cash. This is because debit and credit card processors charge fees, and companies don’t like those fees because they eat into their profits. Cash helps both parties avoid fees.

3. It’s Immediate

Cash transactions are instantaneous. You either have the money in hand, or you don’t. There are no pending transactions or late transactions that hit your account several days after a purchase. You don’t have to manually check whether you have the money in your bank account or inspect your check ledger before making a purchase. You can look in your wallet and see if the money is available. It’s quick and straightforward.

4. It Speaks Volumes

There’s still something about cash that speaks to people. If you are trying to make a big purchase such as buying a used car, there is no comparison when it comes to negotiating power. If you can whip out a fan of $100 bills and hold it in your hands in front of the seller, they won’t want to walk away from that.

If you have to go to the bank, take out a money order or a cashier’s check, and come back, the power of the moment is lost. If you have to fill out a loan application, it’s even worse. Now you’re at the mercy of the lender who can charge you fees and interest rates, and who may overcharge you because they know people routinely spend more using loans and credit than they do with cash.

Cash gives you more power as a buyer because sellers are often willing to accept a bit less than they would with any other payment method. The immediacy of cash seems to give sellers a feeling of security and profit in the transaction.

5. It’s Anonymous

We’re not talking conspiracies here, though if you’re worried about authorities knowing about your transactions, cash is your friend. It’s no secret we live in a world where corporations create and maintain customer profiles and sell them for profit. They use them to create targeted ad campaigns and to keep track of what you buy and when. Do you want to give them all that information so that they can turn around and sell it to companies who will pepper you with telemarketing calls and junk mail?

When you spend using plastic, you create a permanent, traceable, location-specific record of every transaction you make. It creates a digital file of where you shop, what you buy, how much you spend, and how often. If you pay using cash and don’t give out your personal information, you can maintain some sense of anonymity and control over your purchase history and location information. That can lend some peace of mind and maybeweed out some of the marketing ads and phone calls.

6. It’s Not Complicated

We all hate fine print. Yet every debit and credit card comes with pages and pages of it. Credit cards especially come with tons of jargon and industry legalese describing all their various terms and conditions, interest rates, repayment plans, and timeframes. It is doubtful that any of us understand what we agree to when we sign up for these things. Cash is free of fine print, no strings attached. It is what it is, nothing more, nothing less.

7. It’s Physical And Tactile

Cash physically leaves our hands, and it eventually runs out. This may seem like such a simple thing, but it can have a profound effect on your finances. When you have to give cash to someone physically, you are more likely to think twice about spending it. Once your wallet is empty, you know it’s time to stop spending. This tends to work better with human psychology than electronic forms of payment using plastic.

8. It Encourages Discipline

When we pay using a debit card, we don’t seem to have that same feeling of loss that we do with cash. We tend to overspend and are more likely to overrun our budget. This is even worse with credit cards, where we don’t even need to have the money at all to spend it. While debit cards can lead to overspending, credit cards can lead to lasting interest-laden debt, which is even worse. Cash helps you live within your means and stick to your budget, which has a positive impact on every area of your finances.

9. It Encourages Generosity

Last but far from least on this list, cash encourages generosity. Most of us drive by poor and homeless people every day, yet we rarely if ever have anything to offer them. Debit and credit cards have made our lives convenient while removing our ability to help those in need easily. If you spend using cash, you’ll almost always have some spare change or a few dollars to give to a homeless person or buy them a meal. If you use cash you may be more likely to leave a generous tip when dining out or getting a haircut or a cab ride. The readiness of cash seems to make it easier to be liberal than the complexity and technology overhead of plastic.

Can you think of any other reasons why cash is still king, or areas in which it is particularly beneficial? We’d love to hear them, so feel free to share them here in the comments below!

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