I'm one of those people that does most of my transactions with my debit card.  I remember when I first got to Sedalia and I had to borrow money because the bowling alley didn't take cards.  Then I came upon other retailers that only accepted cash.  Even the Pettis County Collector's Office will add 3.9% onto your bill if you pay with credit or debit card.

I recently came across this Time article that lists five situations in which it is best to use cash.

  1. When You're Shopping at a Small Business - If you're at Walmart, go ahead and pay however you want to, but banks actually charge the STORE when you use a card, sometimes as much as 3% of your total purchase.  So it's better to pay with cash at a mom-and-pop store, because they get don't get charged for it.
  2. When You're Leaving a Tip - It depends on the restaurant, but sometimes the credit card tips don't get paid out to the servers until the end of the week.  When you're working for tips, having cash-in-hand at the end of the night can make a difference.  Plus, according to CreditCards.com, some restaurants actually make the SERVERS pay the bank charges.
  3. Anytime You Plan to Haggle - Like at a flea market, because it's easier to bargain with someone when you're holding a bunch of bills in their face.  Plus, the vendors get charged if they run a card, just a like a small business does.  Since they know they'll be charged, that could also affect how low they go.
  4. When You're on a Budget - Study after study shows that you spend less when you're paying with cash because you buy less.  One reason is because you don't actually feel like you're parting with real money when you use a card.  Another is because paying with cash forces you to keep track of what you spend, because eventually you run out.
  5. When You're Buying Something You Might Have to Return - Especially if it's a present for someone else, because if they return it and you used a card, they'll only be able to get store credit.  Even if it's something for you, you should still use cash because sometimes it takes days before a refund ends up back in your bank account.  If you pay with cash, you'll get it back immediately.

Numbers two and four affect me most often.  It seems I find myself in a "tipping" situation a lot.  That wouldn't happen if I were a homebody, but I like to go out.  And who isn't on a tight budget these days?

Think about how much money people would save it they didn't just hand their card to the bartender and say "keep it open."  What if they took the amount they planned to spend that evening into the bar and left when it was gone?  I know I've had my share of surprises at the end of the night by running a tab.  How about you?