One of the things that surprised me the most about my trip to USA was how people view cash.
Its almost an inconvenience for store employees and clerks when you bring out the wallet and pull paper money out of it instead of plastic.
Even if paying in cash, many stores, specially hotels and car rental companies will ask for a credit card (just to verify). Yeas, right.
Most places have signs saying that they don’t have change for 50 or 100 USD bills. Even the ATM give money in 20s. The limit seems to be around 300 or 500 tops. Ridiculous given than in Argentina I can easily get 800 USD out of an ATM if I want.
Now, you could say there’s an easy explanation for this. Credit cards are more practical, employees don’t have to do all that hard math of figuring out how much change they have to give you back if you spend 4.99 and pay with 10 dollars, or you know, the hard manual labor of punching in the numbers and reading the right change to give.
But then again you could play the devil advocate’s game and find a couple other, less innocent reasons:
1)Using credit cards, at least when it comes to mass behavior, means people are much more likely to spend more than what they should or even actually have, sinking them even more into debt.
2)Its much easier to lie and control the economy if people use
virtual money instead of cash. A fiat currency is already bad enough when compared to gold standard times, but virtual money is so much better for both government and big companies that run them. You dont have to print your own money! Just click "edit" in the computer to create it.
3)For companies, they easily create a user’s database that goes into the most intimate detail. I mean, even the most simple program can tell how much money you spend on clothing, if they are low medium or high end, how much money you spend on luxury items, how much times you have sex based on how many Trojans you buy and what beer you prefer. All that provides a very detailed profile of you as a marketing victim … sorry I mean valued customer.
Companies can also charge you extra very much as they please, they have your information after all. If the car you rented smells like smoke you’ll get charged. You can explain that you didn’t smoke in it, that it’s a mistake, but you’ve already paid.
4) Its easy to see how a similar result to what we had after the crisis was achieved through much more subtle methods in USA:
After the economy collapsed in 2001, cash was in high demand and the government went out of its way to promote the use of credit and debit cards (which many stores weren’t even accepting by then). At the same time that accounts had been frozen and there was a weekly limit of 300 pesos to get out of AMTs, the government announced a 5% discount from the normal 21% tax on every item bought with creidt cards. 5% was pretty good, specially for people with an extremely tight budget, so it did help to promote the use of credit cards.
What has been done in USA seems to be much more effective though, it’s a pain in the butt to use cash so they win by getting you tired of all the inconveniences, nuisances and waste of time.
Don’t be fooled though, there’s a reason why they do this.
And also worth mentioning again, specially after seeing how people just aren’t used to having cash around, is the importance of having an emergency cash stash. If the economy ever goes to hell, or there’s long periods of time with no power, business will still try to stay opened and make money. That’s when they’ll look at cash with particular interest, all of them. The minimum would be having enough cash for a month worth of expenses. Even better would be that plus 1000 dollars per family member or enough to buy plane tickets for everyone in a hurry.