Cash. So old-fashioned a thought, when most of us use cash these days for only the most minor of purchases- a cup of coffee in the morning and a train fare. The rest of the time, it’s easy to exist in a cyber, moneyless world where a beautiful plastic card can buy you everything you ever dreamed of and doesn’t weigh as much in your pocket.
I know I’m potentially starting to sound like someone who is virulently anti-credit card, which is not the case. Credit cards can do good things if used correctly, rarely and paid off by the end of each month.
My problem with credit cards is that I used to use them when I couldn’t afford groceries, and paying them off at the end of the month a long-distant dream involving Lotto. So I’ve gotten my retro on and started living off cash, and was surprised to find that there are some savings in it. Who knew? Cash- the unassuming little friend of a glitzy credit card, yet it’s always the one to stand by you and will never call upon you to pay some annoying little fee.
Here’s how cash can save you money.
No transaction fees
Credit cards are wonderful, but they are also the doyen of hidden costs. Enron looks positively honest, compared to the hidden transaction fees of credit cards. Swipe the little card at Aldi, for example, and you’ll be paying a transaction fee. Utilities will also charge a fee, not just because they’re mean but also because credit card companies are charging them to use their facilities and the utility doesn’t want to carry that cost anymore. I’ve never understood the term ‘booking fee’ when you buy a ticket, but I would bet ten bucks that the booking fee would amount mostly to a credit card transaction.
How do you save money with cash? Simple. There are no transaction fees with cash. Everyone loves cash- it’s immediately there and they can use it straightaway, Totally wonderful.
How much do you save?
A couple of dollars every couple of transactions, which isn’t much in the short term but adds up to a lot over the years.
Interest. It’s not a problem unless it gets away from you, and I have a suspicion that credit cards are built to facilitate the interest getting away from you. If you’ve managed to pay off your credit cards every month, then interest won’t be a problem and cash won’t save you that much money. If, however, you haven’t managed to pay off your card, you’ll start to see the money dripping away and making the task of eliminating your debt more and more difficult.
The only interest that cash accrues is the positive kind when it’s in a term deposit.
How much can you save?
Depending on your monthly repayments, savings could be negligible through to $20, $30 or more every month.
No one ever says you get a discount if you pay by credit card. With cash, you might get discounts on everything from furniture through to your first car. Every cent accounts and your retailer, particularly if there are independent, might be willing to knock off some of the price for the pure joy of getting immediate money in their hands.
How much can you save?
That depends on what you’re buying, but you’re looking at a 5- 10% discount, which is no mean sum.