Plastic over Paper
Marc Valero | Highlands TodaySEBRING - It's not a cashless society yet, but many shoppers this holiday season and year-round carry little dough as they pay for just about everything with either a debit or credit card.
Published: November 25, 2012
Published: November 25, 2012
No fumbling for bills and change in your wallet, pocket or pursue — the exact amount needed for your purchase is a swipe away with that little piece of plastic.
Credit Union Times reports that 53 percent of consumers plan to use either their debit cards or cash for holiday shopping and one out of three shoppers will use their credit cards to pay for gifts of more than $100, according to a survey of 500 consumers released recently by Litle & Co., a Lowell, Mass.-based payments processing company.
Shopping at Lakeshore Mall recently, Todd and Jackie Harris said they didn't have any money with them.
What if their two boys (age 8 and 5) want a piece of candy?
That's in the pocket change in the cup holder in the car, Todd said. Most of the time they use a debit card for purchases. It's easier to track debit purchases with the bank statement.
Jackie added, "It comes straight from our account; we don't have credit cards. If we don't have cash for it (in the bank), we don't buy it."
They had paid off most of their credit cards and they decided not to reopen the accounts, she said.
For bill payments, Todd pays online or pays by phone through the company's 800 number, but he still pays some with a check.
They noted a few restaurants accept cash only so that's about the only time they carry cash.
"We even tip on the debit card because we don't normally have cash on hand," Jackie said.
Javelin Strategy & Research reports that cash is no longer king for retail. Debit cards lead with close to a third of all in-store purchases, followed closely by credit cards. The remainders pay with cash or by paper checks, prepaid cards, gift cards and through mobile phone payments.
Cindy's Hallmark & Engraving owner Mike Cowan said years ago many people used checks for purchases at Christmas time.
"We were filling up deposit books with checks and nowadays it's all debit cards, which is great because we don't have any bad checks," he said.
The majority of people are getting away from carrying cash around so they are using debit or credit cards, Cowan said.
Do you still accept checks?
"We take checks and traveler's checks just for the convenience, but we don't see too many," he said. The older generation still hangs with checks, but the kids have nothing but a debit card. They will buy a 50-cent item with a debit card.
The owner of the company they get a lot of their engraving materials from would like to see the day when there are no cash registers and when people use scanners or their phones or whatever to pay for something, Cowan said.
A sales associate can do the whole sales transaction without going to a cash register, he said.
"The way technology is you really have to stay up with the times with marketing with Facebook and Web and Internet," Cowan said. "Wow, things are changing so fast."
But Credit Union Times reports that consumers apparently are not enamored yet with using their mobile devices at retailers. The survey found 71 percent of consumers have never used a merchant's mobile device swipe service such as Square, Google Wallets or PayPal.
Also, only 8.6 percent of shoppers with smartphones think mobile wallets are going to change the payment world, according to the survey.
Christine Merrick of Sebring prefers using cash, while her daughter, Nancy Strickland of Fort Lauderdale, uses a debit card.
Waiting to enter the Sebring J.C. Penny on Black Friday, Merrick said cash is easier.
"I know what I am spending; I don't have to worry about tracking it right away. I got what's in my purse," she said.
Strickland noted she uses a debit card for exactly the same thing.
"I know my limit; I know what I can use and I don't have to worry about anyone taking my wallet," she said.
Wes Linscott commented on Facebook, "I use my debit card for most things and rarely carry more than a few bucks. Usually cash is for things like a haircut.
"I pay most bills online and use only a couple checks each month. Have a credit card with no balance on it, which is just for emergencies. I am debt free and it is a great feeling."
Lauren Henry-Drouin commented that she uses "plastic 99 percent of the time."
Carol Cian-Davidson carries paper and plastic.
"I use cash and card … pretty much evens out between the two," she said.
Investopedia states that one of the drawbacks of credit and debit cards is that they encourage you to spend more than you intend to by giving you easy access to more capital.
With cash, spending more than you intended requires going to a bank or ATM to get more and then going back to the store to complete the purchase. For most people, this provides time to reconsider whether their budgets can handle any extra strain.
Sweden is a leader on the path to a cashless society.
Cash and coins account for only 3 percent of Sweden's economy, compared to an average of 9 percent in the Eurozone and 7 percent in the U.S., according to the Bank for International Settlements, an umbrella organization for the world's central banks.
The International Business Times reports that the elimination of cash is more of a process than a decision and it seems we're all sliding in that direction, but it's slowed by one important fact: The need for cash varies by country.
As long as there are paper bills in use somewhere on Earth, cash can't become fully obsolete, according to IBT. So although physical money is increasingly uncommon in developed countries, we've still got a long way to go before it's completely out of the picture.
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