why do most people prefer to use cash for payments even if they have credit or debit cards?

Question

Most people make transactions by cash at shops eventhough they have credit or debit cards. Making transactions trough credit cards is much more easier compared to cash payments. Then why do people prefer using cash payments at shops?

If it is due to the interest rates then why don't they use debit cards which doesn't have any interest?

Answer 1

Most people actually use credit/debit cards than cash.

That said, those who use cash may be debt strapped, or afraid of high interest rates, prefer not to leave as much of a paper trail, and/or might not qualify for a credit card since most places now require at least a social security number now to get one. Some people prefer cash so they remain out of debt and/or afraid someone will steal their credit card info.

Plus, some people actually like spending greenbacks even though they could just use a credit card or cash!

Answer 2

It turns out that there is a growing preference for credit/debit cards as a form of payment over cash and checks. Almost 50% of all transactions in the US are done with credit/debit cards, a percentage that is growing every year.

Many people, especially young and low-income people, may not pay with credit or debit cards because they don't have one. If you're under 18 it can be hard to get one, and if you don't have a bank account you can't have a debit card.

Answer 3

The easy answer is cash, but only if they are banking large sums (over £1000). The banks usually charge a fixed fee for making a deposit. The next best payment method is a debit card. This costs the retailer a fixed fee of usually 35p. Doesn't matter how big the bill, the charge is always the same with debit cards. Credit cards are the worst, costing retailer 2-3% of the transaction. This is why companies selling high value goods like cars, add on the 2-3% charge. American Express costs even more to some businesses, which is why it is not accepted everywhere. Some businesses prefer debit cards as it saves trips to the bank and gives you a fixed cost per sale.

Answer 4

I would sure like to know what town that people use cash. I see most people here in down pay by debit, check or credit I think the US is not quite ready to give up cash. When they do. Banks will have to give everyone a debit card and an account. I use all methods except checks it-Debit, Credit and Cash. Sometimes people that use debit card are up their daily limit. So they use cash instead. I have seen at times where it has been faster to use cash then debit.

Answer 5

Sometimes you dont want someone to know what your spending your money on...i.e. Big Brother, the old lady....etc.

For example, It wouldn't be too good for your wife to find out by checking your statements that you've been spending all your money at Miss Lees Oriental Massage Parlor.

I think also alot of people are just used to using cash, kinda like people that still write checks at the grocery store when they can use their debit card or wirte a check to pay their bills and put it in the mail when you can do it online electronically and not have to pay for the stamp.

Sometimes you just cant teach an old dog new tricks.

Oh and by the way, if you pay your credit cards off in full before the next bill comes you dont have to pay any interest.

Answer 6

Having worked in the hospitality industry, I have a strong aversion to debit cards and don't even want to own one. So many things can and do go wrong with them at hotel front desk transactions. On a credit card, it's just way too easy to "let it ride" and not pay it off that month, even if you had good intentions. Then you are stuck paying interest and overpaying for the item or service. Better to just ante up the cash at the time of purchase and it's over with for good ... no complications.

Answer 7

I very rarely will use a credit card because of interest. There have been surveys that people will spend about 15% more when they use a credit or debit card than paying cash. People are more aware I guess.

I primarily use a debit card and I tend to be aware of what I am spending.

Answer 8

If you pay by cash, the transaction is finalised there and then and there's no problem regarding finding the money at a later date. In addition, when your pocket is empty, you know you've reached your spending limit. Paying by debit card is the next best thing, but even that can lead to overspending, as you're not actually handling cash. For many people, shopping with a credit card is fatal; they feel that they're not actually spending money; these are the people who will run their credit cards to the limit (and sometimes more than one!). Then, at a later date when the purchased goods are no longer brand new, the reality sets-in and the debts can lead to great suffering, maybe mental illness and even suicide. I find it heartening to hear that you've observed most people paying with cash, because when I lived in the UK, I observed that most purchases were credit card transactions.

Answer 9

Force of habit, and I would say this habit is rapidly changing. I know many people that use almost exclusively their credit cards or debit cards. Some people also use cash systems as a way to keep their debts in check. It is more difficult for them to spend physical money than to understand how much money they charge to their credit cards.

Answer 10

It does not make sense but some people when they use credit cards spend more than if they use cash. At least that's what they say. As to using credit card it's much easier, safer, gets you to earn points and if you lose it you can always get your money back so, those who do use it probably losing in the long run.