The convenience of using plastic has influenced more than 70% of Americans to use cash less often. However, it may be costing them. A study published by the Massachusetts Institute of Technology (MIT) shows that 83% more spending happens when consumers choose to use cards over cash.
This plastic indulgence versus cash savings is psychological. Science Daily backs this, sharing that using cash is ‘psychologically painful’ for many people. It has been proved that seeing money leave your hand makes you more aware of your spending habits. While this highlights the cause and effect of cash use, the truth is, there are many more reasons why cash use is beneficial.
1. Leverage for Negotiations
Carrying cash is wise, according to Mark Cuban, a Shark Tank billionaire investor and owner of the Dallas Mavericks. He shared with Vanity Fair that holding cash is the best way to carry out negotiations. It gives you leverage – on the spot - to talk people down on their prices.
For example, if someone is selling an item on the street and you only have $12 on you, but the item costs $15, more times than not, they will take the cash, and give you a discount.
2. Healthy Budgeting
You may have heard the term ‘cash-only diet’. It was coined as a reference to pulling out the cash you need for the month or week and sticking to only spending the cash you have in hand. It is a way of ‘dieting’ from credit and debit swipes. Not only does this cut your spending, but it also makes you think twice about the items you purchase.
A Journal of Consumer Research study echoes that cash helps curve impulse spending, stating that when they gave consumers cash, they purchased less unhealthy items like cookies, chips, ice cream and other processed items. Therefore, using cash can help you save money and make healthier choices.
3. Avoid Fees and Debt
With almost 50% of U.S. households carrying some type of credit card, it is no wonder that Americans carry an estimated $807 billion in debt, with the total consumer debt sitting at $4.2 trillion. These numbers are staggering. Every time you swipe a credit card, you are paying more for the product – an average of 16.6% more, according to a CreditCards.com report.
If you live in a city or small town, mom-and-pop shops, gas stations and other small retailers may charge you more for using a credit card too as they are passing their fees on to the consumer. No matter how you look at it, keeping cash in your wallet helps you save money in the moment and in the long run.
Help Customers Save & Increase Your Bottom Line
Providing your customers with easy access to cash by installing an ATM in your business has many benefits including providing the business with an additional revenue stream. But it also helps customers make the choice to swipe or use cash – to help them save money and make these healthier decisions. However, the benefits don’t stop there. Customers who use your ATM are more likely to spend almost half of the money they withdraw in your store.
Contact us today to find out if you qualify for a FREE ATM.