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Cash Amnesia

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Re: Cash Amnesia

#41

Post by intrasight »

kldavis4 wrote: post #37
TheRealPomax wrote: post #24

Earlier quoted context omitted.

When I first moved to North America, the idea that a credit card company was allowed to give people cash back, offer insurance, etc. for using their cards seemed like some bizarroworld "how is this legal" concept. Having lived here for decades, it still is. It's like an alcohol shop rewarding its most alcoholic customers by giving them free booze. And then if you sign up for a new card, or you cancel a card, some ran…

Furthermore, everyone, regardless of whether they are using a credit card, is paying for this in the form of higher prices (unless the vendor has separate cash prices...)

Some of my favorite restaurants give a 3% cash discount

Re: Cash Amnesia

#42

Post by inconceivable »

TheRealPomax wrote: post #24
hunter2_ wrote: post #18

> “Certain products are more guilt-inducing because they feel more like impulsive purchases, like a foam hand for the sports game,” Huang says. “Some are more rational purchases, such as books or stationery products for class.” Sure enough, they found that customers were more likely to pay in cash for harder-to-justify items like stuffed plush mascots and Christmas ornaments. Or perhaps the group of people buying har…

When I first moved to North America, the idea that a credit card company was allowed to give people cash back, offer insurance, etc. for using their cards seemed like some bizarroworld "how is this legal" concept. Having lived here for decades, it still is. It's like an alcohol shop rewarding its most alcoholic customers by giving them free booze. And then if you sign up for a new card, or you cancel a card, some ran…

no, absolutely no debit cards for me. i protect my cash with multiple layers of protection. if i lose my wallet or my phone the person who ends up with these things will have no clue where most of my money is at.

amex takes most if not all the risk in my financial life when it comes to day to day spending. one time i had my wallet stolen and the only thing they could muster was a failed gas station transaction. they didn't even try the ATM card.

i use the free points/perks that the irresponsible idiots subsidize to my own advantage. it's linked directly to my amazon account and shows up as a positive cash balance.

Re: Cash Amnesia

#43

Post by GravelRocks »

hunter2_ wrote: post #18

> “Certain products are more guilt-inducing because they feel more like impulsive purchases, like a foam hand for the sports game,” Huang says. “Some are more rational purchases, such as books or stationery products for class.” Sure enough, they found that customers were more likely to pay in cash for harder-to-justify items like stuffed plush mascots and Christmas ornaments. Or perhaps the group of people buying har…

From the article:

"Another study explored shoppers’ preference for untraceable payment methods besides cash. Half the participants were informed they had a $20 bill and a debit card linked to their bank account; the other half were told they had a $20 bill and a prepaid debit card. The researchers found that people with the debit card were more likely to use cash to make a harder-to justify purchase (in this case, a party-sized bag of M&M’s). However, those with a prepaid card used it as often as cash to buy the candy."

Doesn't that study control for specifically that counter claim?

Re: Cash Amnesia

#45

Post by kldavis4 »

AlanSE wrote: post #40
kldavis4 wrote: post #37

Earlier quoted context omitted.

Furthermore, everyone, regardless of whether they are using a credit card, is paying for this in the form of higher prices (unless the vendor has separate cash prices...)

Higher cash prices are a violation of the card-holder agreement.

I think you mean the merchant agreement. There are many gas stations in the area where I live that have different cash prices and still take credit cards, so I'm not sure if this is still a thing. And honestly the fact that they would have that lends support to the fact that all of these credit card "benefits" are subsidized by cash payers.

Re: Cash Amnesia

#46

Post by AlanSE »

MyNameIsRansom wrote: post #28

Lots of small businesses do "cash no tax". It's not forgotten when it's spent. I've fixed my car in cash (primarily to save on tax; and to not have it known by insurance). It's hard for one to "amnesia" $5000 in cash. It's a tool, just like a credit card.

As in, they use tax to avoid reporting the earnings? That works fine for the scale of a lemonade stand.

Re: Cash Amnesia

#47

Post by Larrikin »

brightball wrote: post #35
electroly wrote: post #4

Earlier quoted context omitted.

IMO, that's outdated advice from the days before online automatic bookkeeping, before credit card transactions were immediately visible online, before your bank could auto-classify your credit card purchases into spending categories, before configurable spending alerts, before budgeting apps with bank integration, etc. If you spend cash, you don't benefit from any of that and as soon as you forget about the transacti…

It's not. The point of cash is to make you more psychologically aware of what you're spending so that you're less likely to buy something you don't need in the first place. All of the online transaction tracking only helps with purchases that you've already made, so you can say "maybe I shouldn't have done that"...after the fact. Cash based budgeting works beautifully, but it requires a change from what you're used t…

It comes down to how you budget and pay your bills. If you take out large chunks of cash at a time then psychologically seeing the cash leave your wallet might personally help you if you treat budgeting as a once a month task. It's easy to get into trouble with a credit card if you never look at your transactions until the end of the month and treat the amount on your statement as a big blob you just have to pay while just glancing through your statement.

If you actually use budgeting tools like YNAB which get you into the habit of spending a couple minutes every morning to confirm and categorize where your money went you end up with all the psychological benefits of cash, it's impossible to forget a transaction, you know exactly where your money went for years, and you end up with even more money due to the credit card rewards. I also usually take that time every morning to pay or partially pay on all my cards to make it even more obvious the cash that is leaving my checking account each day.

Re: Cash Amnesia

#48

Post by AlanSE »

kldavis4 wrote: post #45
AlanSE wrote: post #40

Earlier quoted context omitted.

Higher cash prices are a violation of the card-holder agreement.

I think you mean the merchant agreement. There are many gas stations in the area where I live that have different cash prices and still take credit cards, so I'm not sure if this is still a thing. And honestly the fact that they would have that lends support to the fact that all of these credit card "benefits" are subsidized by cash payers.

Yes, I should have Googled that before using the wrong word.

I am also operating on old information, perhaps the law changed and this it varies by state now.

Re: Cash Amnesia

#49

Post by schnable »

AlanSE wrote: post #40
kldavis4 wrote: post #37

Earlier quoted context omitted.

Furthermore, everyone, regardless of whether they are using a credit card, is paying for this in the form of higher prices (unless the vendor has separate cash prices...)

Higher cash prices are a violation of the card-holder agreement.

This hasn't been true since Dodd-Frank in 2010: https://en.wikipedia.org/wiki/Durbin_amendment

"included provisions which allow retailers to refuse to use credit cards for small purchases and offer incentives for using cash or another type of card."

Re: Cash Amnesia

#50

Post by jollyllama »

hooverd wrote: post #5

Obviously you pay cash so it doesn't affect your social credit score. I always pay cash at the bar- it's an easy way to realize you're spending too much compared to just opening a tab. Plus you don't get stuck closing out if you wait too long.

Basically correct. People do this to avoid detection from surveillance. Including, for some, their spouse.
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