Points:
- Even though more and more transactions are going cashless, paper money is still useful, especially for guilty pleasures.
- Szu-chi Huang, a professor at Stanford, has conducted new research that suggests using cash makes it simpler to forget a transaction even took place.
- The day of a cashless society is almost here.
Americans finally gave up using paper money during the pandemic in favor of “tap and go” purchases after years of resistance, and they now nearly fully accept contactless and electronic forms of payment. A recent PwC report indicates that more cashless transactions are likely to occur in the future.
However, there is still a secret benefit to paying cash, according to recent research, particularly if you wish not to remember the transaction ever took place.
According to a paper by Szu-chi Huang, an associate professor of marketing at the Stanford Graduate School of Business, buyers pay with credit cards to recall and cash to forget.
According to an examination of more than 118,000 actual purchases, consumers are more likely to use cash than a credit card when they are motivated to forget a purchase since using a credit card leaves a “paper/electronic trail” that “aids memory retrieval.”
Another Bankrate.com study found that using cash when making purchases is effective at keeping purchases hidden from a partner or wife. “Cash can be more anonymous,” , a Bankrate credit card analyst.
According to a different survey, more Americans than you may imagine admit to engaging in some type of financial adultery. They are frequently spending more than they believe their significant other would be willing to accept. Some people are in debt of some type, have a secret account, or use a credit card.
Benefits and drawbacks of money
On the plus side, people who are trying to stay to a budget may find that paying with cash is a wise choice.
The majority of specialists advise utilizing the “cash stuffing” or envelope method to maintain discipline. In this scenario, your monthly expenses, such as groceries and gas, are represented by envelopes that contain spending money. You are either finished spending in that category for the time being when the money in one envelope is spent.
Following this strategy prevents you from accruing credit card debt, he explained.
But when paying with cash, you forfeit the benefits and insurance that come with using credit.
While a generic cash-back card will only give you 2% back at supermarkets, other food rewards cards can give you as much as 6% back. Additionally, there are federal regulations to safeguard you when using your credit card, for instance, if you never receive the goods you paid for.
Additionally secure are contactless and electronic payment solutions like Apple Pay.
They contain a near-field communication antenna that can be used to make radio wave proximity payments. A dynamic cryptogram, often known as a code, is also used and is particular to each transaction.
This is comparable to the smart technology used in chip cards, sometimes referred to as EMV, which can handle card transactions including embedded smart chips, but it is significantly faster.