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Cash or Credit

Pumping and paying for gas can already be a painful experience. Cyd encountered this first hand when she relocated to the U.S. (you can watch her newest venture on Tipitoe USA). New Jersey is the only state that doesn't allow customers to pump their own gas — anywhere. There's always an attendant on duty to pump gas for customers at these full-service stations. Oregon is the only other state besides New Jersey with a full-service law. However, Oregon’s laws are far less strict and allow certain parts of the state to have self-service gas stations. The gas attendant near us isn't always cheerful. On early mornings when you ask him how he is doing, he'll tell you that he doesnt know yet!. At the drop of a dime, he rants about a notice he's squarely and vividly displayed that reads "Won't accept $100 bill." This becomes the subject of discussion: Cash or Credit?

Many small businesses prefer cash rather than credit. Part of the reason for this restriction is merchant fees that store owners pay for billing credit card companies. Fees range from per transaction fees (usually a percentage or a few cents on each card processed) to monthly or annual maintenance fees that can range from a few dollars to a few hundred dollars. While debit cards are treated like cash in many circumstances, if a merchant refuses to run a card for a small transaction, you will need actual bills to complete this payment. A fool and his money are soon parted.

“Many small businesses prefer cash rather credit."

Interestingly here in NJ and not too long ago, a coffee shop alongside three other businesses received notices of violations of the state’s Consumer Fraud Act (CFA), which requires merchants to accept cash payments and also to disclose any credit card surcharges or fees prior to customers placing orders. It appears that they forgot the adage, "he who pays the piper calls the tune." The coffee shop, Hidden Grounds Coffee, has agreed to pay a $2,000 penalty for not accepting cash.! No more highway robbery.

If you plan to use only dollars... you risk loss if your wallet is stolen.

If you plan to use only dollar bills, there will be a few challenges. You will need to make more frequent trips to the bank and ensure you have small enough bills to prove correct change for friends or small vendors. You also risk loss if your wallet is stolen. On the other hand, when making payments for utilities, income taxes or car registration, you may notice a convenience fee for the use of a credit or debit card. In many cases this fee can be avoided when using a check or an electronic fund transfer. Confusing to you already?


The march toward a cashless society, it seems, is unstoppable. Whenever you have to pay for something, there is a very good chance you can do it with your card, phone, or even watch. Cash has gone from the primary form of payment to third place. Fewer Nordic banks are using cash in their branches. India recently scrapped 86 percent of its banknotes. Korea plans to stop minting coins by 2020. Online payments are booming. Young people especially, as well as the better off and better educated, are increasingly at ease paying by card or mobile phone. The M-Pesa mobile payment service took off in Kenya because there was one dominant mobile operator, Safaricom, in a country where few people had access to a bank. In 2014, Charles Graeber, spent 10 Days in Kenya with 1 Phone & 0 Cash. He exposed some benefits of mobile payments, along with the opportunities for personal connectivity that mobile payments create. Mpesa is now bread and butter for Safaricom or it's cash cow. Just glance at it's latest annual report.


There's a huge debate on whether governments are engaged in a war on cash. That their goal is to eliminate the use of hand-to-hand currency, so that governments can document, control, and tax everything - that cash becomes chicken feed!. In just the last few years…

  • Italy made cash transactions over €1,000 illegal;

  • Switzerland has proposed banning cash payments in excess of 100,000 francs;

  • Russia banned cash transactions over $10,000;

  • Spain banned cash transactions over €2,500;

  • Mexico made cash payments of more than 200,000 pesos illegal;

  • Uruguay banned cash transactions over $5,000; and

  • France made cash transactions over €1,000 illegal, down from the previous limit of €3,000.

Before we call it a day, I'll leave you with one last intriguing money thought: Check your $2 Bills — They could be worth upwards of $4,500. Certain $2 bills can fetch $4,500 and up on the collectibles market, according to the U.S. Currency Auctions (USCA) website. Just about all of the really valuable ones were printed in the 19th century. But even bills printed within the last 30 years might be worth hundreds of dollars — if you have the right one. That $2 bill can help you bring home the bacon.


Digital currencies may be the next stage of the journey. As people use less physical cash and alternative currencies such as Bitcoin gain ground, many countries are looking at issuing their own central bank digital currencies (CBDC). Bitcoin is not cheap either. It costs an arm and a leg to purchase it: 1 bitcon = 24,205.00.


There are benefits to be considered with either cash or credit. By the way, our shop accepts credit. You can find computer accessories, mugs, wireless chargers and external drives. Evaluate your needs and choose the option that works best for your lifestyle. Get Your money’s worth. beep, buzz, go. From cha-ching to beep-boop.


Disclaimer

This blog is written for educational and informational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. They author may or may or may not have positions in Financial Instruments discussed in this blog. Future results can be dramatically different from the opinions expressed therein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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Cyd Nzyoka
Cyd Nzyoka
Apr 03, 2023

Cash indeed is KING….Many are the times l have gone to a gas station and the sign stated $2.98 if you pay cash and $3.07, if you pay with a credit card. Gosh l rarely have cash on me, so annually imagine how much l could have saved if l just paid by cash…..l bet l am not alone on this ha ha….l’ll try carrying cash around.

This was a very enjoyable and informative read.

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