For Everything, Apparently There's Visa!

"That'll be $2.47," the cashier said.  The thirty-something woman who looked like she had just finished an aerobics class fumbled through her oversized shoulder bag and pulled out a credit card.  The cashier didn't even flinch as she processed the transaction.  I thought to myself..."Lady, you don't have three lousy bucks in that gargantuan bag?!"  Apparently nobody carries cash anymore.  Life does, in fact, take Visa.

Not so long ago, using plastic for a $2.47 transaction would have been looked upon with disdain.  Store managers would be summoned and fingers would wag.  Now its no big deal.  Cash is passe.

The folks at MC and Visa have achieved their goal of making card use so ubiquitous, so commonplace that nobody gives it a second thought.  Its a super deal for the card companies who double dip from consumers and retailers alike on the same transaction.  The whole idea is to make spending and purchases easy.  Ridiculously easy.

If we rewind a few years, we can see what happened when it became ridiculously easy to get a mortgage.  Buying a $650,000 home on a $20,000 income was no problem.  Through the process all the players took their cut and looked the other way.  We see where that got us.

Thankfully, consumers have been holding back on big purchases and reducing credit card debt...a little.  Personally, I despise credit cards but many aspects of American life don't function well without one.  If I had no credit card I couldn't rent a car, book a hotel, buy plane tickets, purchase anything online or over the phone, ....and the list goes on. So I have a credit card....ONE credit card.  I don't need another one.

The big problem I see with credit cards is that they're too easy to use and nobody warns you if you're spending too much.  No alarms, no sirens, no text messages...just swipe and be on your merry way...until its too late.  A non-credit card transaction goes like this...."Boy, I'd really like that new TV. The tag says it's $600. Hmm, I have a gum wrapper, half a movie ticket and $38 bucks in my wallet.  Guess I can't buy it."  End of story.  If you have a credit card..."I really DESERVE that TV.  I'm gonna go for it! I'll just put it on my card."  It isn't until three weeks later after you've been watching everything in glorious high def that the bill comes in.  "Aw, snap!  I don't get paid for two weeks.  I'll just pay the minimum for now."  Curtain rises....enter the accrued-interest-on-average-daily-balance fairy....

Although credit cards were around when I was young, society encouraged more of a cash-and-carry policy. If you didn't have the money, you didn't buy it.  Even if you did have the money, it wasn't uncommon to pull out your wad and count off the bills required to finalize the transaction.  If the proposed post-purchase cash wad was now too small, the potential purchase might be shelved.  The counting of the cash provided us a reminder...a reference point to truly measure the cost of a purchase.  Now, a purchase is just a card and a signature.  There's no reference point....no pile of currency to be handed over.  Be the purchase for $2 or $2,000, there's only the card.  Visa wants it that way.

When I go to restaurant with friends, I screw everything up.  The cash underneath the four credit cards is always mine.  I count it out and I'm done.  No paperwork or bills to contend with later.  My friends ask "Why are you paying cash?"  It's as if cash is now only used for special occasions....like trips to the strip club or playing three-card-monty on the street.  Wouldn't want to use it all up, would I?  I'd have none left for debauched activities.  Sophisticated grown-ups use credit cards...right?  I guess that's where we're headed.  Using cash makes me feel like a gangster anyway.  "Don worree'bout it yooz guys.  I got plenty a cash."  The only thing that would make that statement sound better is if I had a big fat Cohiba clenched between my teeth when I said it.  Seriously, though....cash isn't all that bad.

One recent client of ours had a Home Shopping Network addiction.  We estimated she'd spent nearly $50,000 on the stuff she saw on TV and she wasn't rich.  Let's change the scenario....Let's say she had the contents of her bank account neatly laid out on the coffee table in piles of currency and every time she decided to buy something that was on the TV she had to lean forward, count out the bills corresponding to the amount of the purchase and hand it over to someone.  What are the odds there'd be two full storage units of unopened HSN stuff and an empty bank account?

I rest my case.

Oops!  Maybe I DIDN'T need that _____ <--- Insert frivolous purchase here.