Paper or Plastic?

No, I am not asking about your preferred tote from the market; hopefully, by now, you are reusing bags, not demanding a new one with every trip. Instead I am referring to how you pay for those purchases, and your gas (if you are still driving), and your bills. The idea of a *cashless* society has been around for years; let’s look at the advantages that remain today when we use cash or check, rather than plastic credit or debit cards.
• From a rebellious perspective, the best thing about cash is that it directly robs banks of profit. It does this in three ways:
o Banks charge merchants every time a customer uses plastic. Fees are different for different banks, and for different purchases, and for different types and brands of cards. But typically a merchant gives up 3% of the sale just to have the payment processed electronically. This is one big reason why financial sector profits now exceed 40% of all corporate profits in the U.S.; historically, banks represent less than 10% of all profits. Even direct debit payments cost money to process, paid for by the merchant.
o Another big reason banks are so profitable is due to the fees they charge for insufficient funds or debit card overdrafts. It seems counter-intuitive that in this age of instant communication that a debit card transaction can’t determine at the point-of-sale that there are insufficient funds and reject the payment immediately; however, banks don’t want to do that as they crave charging overdraft fees. Paying with cash saves you money in fees even as it blocks banks from collecting them.
o Banks can only lend based on the amount of their reserves. Removing your funds in the form of cash, and keeping that cash at home (where you might want it in a prolonged power outage when no form of plastic works to buy food and supplies) deprives the banks of the ability to leverage your money into their profits from interest payments made by borrowers.
• You just might be able to keep more of your money if you keep it in cash rather than as a few, easily confiscated or manipulated bits in the bank’s mainframe. Other than security, you gain little by leaving your money at their disposal since they haven’t paid interest to speak of in years. Being a creditor of the bank, and you are just another creditor should the bank go bust, can turn out badly for you. And leaving funds in an account might leave you vulnerable to being *Cyprused*, all assurances by government and regulators and even the FDIC to the contrary.
• You might also save cash because it seems psychologically more difficult to pay for something with dollars that come from your pocket or pocketbook, rather than by swiping a piece of plastic. Just as keeping a diary of every amount you spend for several weeks leads to a desire not to have to write down this potential purchase, we find we just spend less of the green stuff than the plastic stuff.
• I grant that you may not care about this next point if you are shopping at a nationwide chain; you will assume that the cost is built into the price already, and who cares if they send that 3% to a massive corporation that is not a bank, rather than to a bank? However, if (as I sincerely hope) you are shopping at a locally-owned business, leaving the 3% charged by banks for plastic processing in the hands of your local proprietor can be huge, and keeping that extra money in our community rather than sending it away to some corporate headquarters on the other coast can have visible, tangible benefits for you and your neighbors.
• To branch off of that point, there are times when using plastic keeps us isolated, processing our business inside a solitary cocoon, devoid of human interaction. We pump our own gas (jobs lost!) after sending our 3% tithe to the banks through the pay-at-the-pump mechanism, and we rarely go inside where the lone employee sits to purchase anything other than gasoline. When you use cash, you give the owner reason to continue to employ a person to take money, even if only at minimum wage. If enough of us paid with cash, maybe that wage could go up! By the way, this idea of self-checkout is insidious: stores and banks need fewer human staff as more and more of their business processes themselves and pays with plastic. Avoid market self-check lines and ATMs whenever possible, if you value your contribution to giving neighbors gainful employment. I even use the human checkout counter at my local library, trying to ensure that the staff maintains their opportunity for employment, rather than use the self-checkout machine to do the work myself. You can even be so subversive as to chat with the bank teller about why you are only cashing the check, not leaving most of the funds in the bank account, with the cashier about why you pay with cash, or with the librarian about why you enjoy the service they provide!
• It may well be that you have come to terms with how increasing our debt is so problematic on so many levels of our society; but for the personal perspective, if you still use plastic of the credit variety then switching to cash might also make it easier to wean yourself from spending more than you earn. Continually *borrowing-by-swiping* further indentures you to the system, requiring you to maintain the kind of job that pays wages in the fiat currency that allows you to service your debt. Too many Americans can only service their debt, not pay it off. I understand that wages have not gone up even as prices have; that makes living within our means more difficult than ever. The conversation we need to have with ourselves is this: “Does shopping and consuming really give me a thrill that is worth the agony of working until the day I die? Do I really need to spend my future to take this item home, right now, today?” We will never get off the debt wheel until we make the hard choices; until we find our satisfaction in life in ways that don’t require borrowing, or until we are able to plan and save for those big-ticket items and avoid credit for *stuff* that lasts hardly a day or week before it is gone, used up, eaten, or thrown aside.
• And lastly (for today’s discussion), there is the small matter of surveillance. Cash is anonymous. You’ve seen the police shows on TV when the officers visit a small shop and ask to see the credit card receipts… it may not quite work that way today, but using plastic leaves a trail that points directly back to you. And as I have mentioned before: even if you have done nothing wrong, under the rules of the surveillance state today your innocent purchase can be suspect if you are even accidentally contacted by someone who is rightly under suspicion. Innocent until proven guilty? LOL! It is only prudent to leave as little trail behind you as possible.


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