Despite the efforts of the major banks and technology companies to convince everyone that cash is antiquated and tech payments are the present and wave of the future, I completely disagree.  There are three main reasons for this opinion.

First, despite what technology does for us in so many other areas, it is not faster than a cash transaction.  In fact, nothing is faster.  You give your $20.00 bill and you receive your change.  Everyone has the 10 seconds it takes for this transaction to be completed.  And, once the transaction is complete, it’s over, then and there. There is no need to check a statement.  And, it’s paid for with your money not the bank’s money.  Every time you use a credit card you are using the financial institute’s money, not yours.  You have to pay them back for this privilege. If you don’t pay in full, you also have to pay interest, which brings me to my next point.

Credit card debt has played a large role in most of the financial downturns in the past four decades. Credit makes it too easy for people to end up in financial distress.  When you charge, you aren’t technically spending your money so you keep charging.  Until the bill comes due of course.  Cash forces people to spend responsibly and instead of being replaced should be the primary form of of payment for purchases under $100.  A healthy financial life and future is directly dependent on lack of debt.  I am not naive.  We need credit but only good credit so we can buy homes and cars etc.  Cash ensures that people live within their means.

Third, cash provides one thing that can never be provided by credit cards or any modern technology….PRIVACY!!! If a person wants to go out and buy a case of wine or beer, or a Channel handbag, why shouldn’t that person be afforded the privacy of paying with cash.  It aggravates me when, the very rare time I purchase something on line, I start receiving ads for similar products.  I consider it an invasion of my privacy.  I’m an adult and know very well what I like and need. Don’t inundate me with advertising.  It’s the very reason I don’t purchase anything on line. Privacy is one of the most important rights we have.  It’s up there with freedom of the press and freedom of religion.  It amazes me how many people are willing to sell that right for points or a lousy coupon.  It brings me back to Economics 101, “there’s no such thing as a free lunch.”

I recently read that VISA is offering $10,000 to fifty restaurants if they agree to no longer accept cash.  I don’t think Peter Luger’s will be accepting that offer.  While credit only for businesses is very tempting, there is also a huge caveat.  While the removal of cash will absolutely reduce the amount of cash theft and reduce the cost of money, it will also cause the banks to become greedy.  What or who will stop the credit card companies from increasing their fees to a level that will offset the savings.  Once they have the entire business, there is nothing to stop them from adding fees that will ultimately hurt the bottom line.

In closing, The next great crash will once again involve too many overextended, Americans.  Credit cards make it too simple for people to find their way in to debt.  And too much debt, and not enough savings, is a sure-fire plan for disaster. I would not be adverse to eliminating pennies which are unnecessary and would help limit the outlay of the cost of the penny and help the government raise capital.  Transactions would simply be raised to the nearest 10 cents; $8.41 becomes $8.50.  But make no mistake, Cash will ensure the economic stability and economic liberty of each and every American.