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Cash Amnesia

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Re: Cash Amnesia

#51

Post by dspillett »

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.

kldavis4 was meaning that everyone pays the same higher price to account for the fees present in card payment processing, regardless of whether they are paying in cash, be debit card, or by credit card.

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

I think what you are meaning is “higher card prices are a violation of the merchant agreement” – so a merchant can't offer different prices for cash payments to account for differences in processing costs or they risk losing their merchant account with the card/payment processing company.

In some places this is no longer legal¹, you'd have to check your local legislation to know what applies in that regard where you are.

Also the reverse, offering discounts for card use rather than cash², is illegal in some places because it is unfair to those without cards⁴.

--

[1] so card processing companies can't (legally) punish merchants for offering a discount for cash

[2] usually because the merchant gets a kick-back from the card payment processor, though sometimes these days it is because cash has become the minority payment method³ and vendors would rather only deal with one so want to further discourage cash

[3] it is worth noting while discussing potential costs or kick-backs for card payment processing, that for businesses the act of dealing with cash has associated admin and/or costs too

[4] which is disproportionately the disadvantaged, because they find it harder to qualify for any card, or can only qualify for one with a monthly charge that they can ill afford

Re: Cash Amnesia

#53

Post by djkivi »

Larrikin wrote: post #47
brightball wrote: post #35

Earlier quoted context omitted.

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 whil…

If you pay with cash then once your wallet is empty you’re done. I could spend far more on my credit cards than I actually have if I wanted to.

Re: Cash Amnesia

#54

Post by claytonjy »

inconceivable wrote: post #42
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…

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…

Is your ATM card not also a debit card? Mine have always been both.

Re: Cash Amnesia

#55

Post by hooverd »

mdp2021 wrote: post #20
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.

"social credit score"?

Ok, I live in the US, we don't have one of those. We do have a bunch of companies, insurers and otherwise, that want to assign some sort of risk score to you. Credit card companies will happily part way with transaction data.

*If you're wondering: I have a credit card. I don't really care if some data broker knows that I bought pants or paid my water bill.

Re: Cash Amnesia

#56

Post by hooverd »

Larrikin wrote: post #39
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.

Or just pay as you go with your credit card as there really is no upside to opening a tab or paying in cash if you have a credit card. If the bar is so busy that you think you're saving time by paying in cash, you're wasting that time else where by going to the ATM and making sure you have the right collection of bills to pay in exact change. If you're getting change even once then you're making the server spend even…

I keep a good mix of ones, fives, and tens. I also use a credit card for most expenses.

Re: Cash Amnesia

#57

Post by Larrikin »

djkivi wrote: post #53
Larrikin wrote: post #47

Earlier quoted context omitted.

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 whil…

If you pay with cash then once your wallet is empty you’re done. I could spend far more on my credit cards than I actually have if I wanted to.

If you do then you can enjoy yourself the night, and limit your purchases for the rest of month.

You also would have more money in your account if you had been getting the credit card rewards for years and could extend your night without spending more than you have.

Re: Cash Amnesia

#58

Post by chrismcb »

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.

I've never seen anyone do this. But, unless the small business is committing fraud, they are then eating the tax. I don't a small business is going to willing pay 10% (or whatever the tax is)

Re: Cash Amnesia

#59

Post by chrismcb »

EGreg wrote: post #15

How quaint. Countries around the world are gradually phasing out cash, and forcing banks to report any transactions that add up to more than $600. They want the tax revenue and ultimate control — but they’ll claim it’s mostly to prevent “money laundering”. This is like analyzing the details of how people use vinyl records to play music. It won’t matter in 1-2 decades.

America started to do this to try to collect taxes on small transactions. Not to prevent money laundering.

Re: Cash Amnesia

#60

Post by WJW »

jfim wrote: post #13
WJW wrote: post #7

Earlier quoted context omitted.

I can easily see both depending on how diligently people track their spending. I have a budgeting system setup that adds a task to my daily to-do list if my bank balance differs from what is in my hledger files (ie if I have transactions in my bank account that I have not yet put into hledger). The chances of me not being aware of on-card spending is extremely low. Cash money is not tracked nearly as accurately thoug…

That sounds like a pretty interesting setup, how do you have it work with your bank accounts?

It's extremely hacky and there is barely any automation at all. Everyday at 0500 a cronjob uses https://github.com/djc/abna to fetch the bank balance and makes no effort at all to automatically parse more than the balance. It then compares that with what the balance "should" be according to hledger and sets up a todo item if there is any difference. Somewhere during the day I manually reconcile the two and check off the todo item.

I'm sure it could be smarter with automatic parsing and whatnot, but I actually kinda like the manual action. It makes sure I'm aware of everything happening to my bank account. Time spent per day is actually quite low because it's kept updated and there is never any big backlog of transactions. I would say it takes 2-3 minutes if there are any transactions, or zero ofc if I didn't spend anything.

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