Why you shouldn’t carry cash

Cash has been used by humans as a form of tender for hundreds of years. The earliest paper currencies, or bank notes, were created in the 7th century by the Tang dynasty in China. Its utility and widespread acceptance were the primary reasons for its growth in commerce throughout the world. Although cash still is popular among billions, its popularity is on the wane in several countries. Digital payments, along with debit and credit cards, as well as alternative forms of payment such as cryptocurrencies, threaten the dominance of cash. Here we examine some of the reasons why you shouldn’t carry cash.

Cash is dirty

There are few recent studies on the cleanliness of cash, however, a couple large studies were performed in the early 2000s. One study published in Forensic Science International found that 92% majority of the dollar bills analyzed tested positive for traces of cocaine, along significant quantities of methamphetamine, PCP and heroin. A 2002 study that was published in the Southern Medical Journal claimed that 94% of the dollar bills tested contained pathogenic organisms – which are bacteria, viruses or other microorganisms that causes disease – along with more germs that many households would have in their toilet. It’s not hard to imagine that the old crusty bills in your purse or wallet could be host to countless germs and a shady history. Best not let your imagination run wild and remove the risks entirely by not carrying any cash with you.

Makes your wallet fat and heavy

People rarely think about the added burden of having to carry cash. Each bill may seem thin and light, but when you stack them together and carry your wads around, it can weigh you down. Each dollar bill issued by the U.S. Treasury comes in at a weight of 1 gram and a thickness of 0.0043 inches.

As many vacationers know, deciding to carry cash is helpful when it comes to getting some negotiating leverage with sellers and makes it harder for banks, credit card companies, or other people of concern, to track your spending. Many of us have carried around a stack of 100 one dollar bills, that alone is 100 grams, which is roughly a quarter pound, and adds an extra 0.86 when folded in half and stuffed in our pockets. It can be fun at times to travel and spend with a fat wallet, but try doing it for more than a day and you can be sure you’ll want get rid of that extra paper/cotton/linen ASAP.

Its prone to loss

Lose your cash? Then you’ve lost your money. Some insurance policies may provide coverage for cash losses, but since it’s hard to prove how much you have in your possession, many policies do not offer protection. Cash is prone to theft, misplacement, as well as is at risk to the elements of fire, wind, water and really anything else that threatens the integrity of paper, cotton or linen. Some countries have more robust currencies that are polymer based and thus resistant to water damage or tearing. However, they aren’t immune to loss. If you’re accident prone, then better off you don’t carry cash with you as it’s the first thing to be removed from a stolen wallet or purse. You can cancel or freeze your credit or debit cards, but you have no fail-proof loss aversion with cash.

Cash is not ecologically friendly

The United States Bureau of Engraving and Printing (BEP) is in charge of printing U.S. currency. The BEP states that U.S. paper currency is made of 75% cotton and 25% linen. This is what gives the greenback its “distinct look and feel”. Higher value bills have additional features such as special inks, security ribbons or threads, and holograms. The U.S. Federal Reserve provides an updated table for the the cost of producing each unit of currency. The 2021 printing budget is about $1.095 billion, which is small in terms of federal government spending but a substantial amount to most Americans.

DenominationPrinting Costs
$1 and $26.2 cents per note
$510.8 cents per note
$1010.8 cents per note
$2011.2 cents per note
$5011.0 cents per note
$10014.0 cents per note
Source: 2021 Currency Printing Costs – U.S. Federal Reserve

The creation of the billions of paper notes consumes energy and creates waste byproducts. Environmentalists could celebrate a small victory if they are able to convince governments around the world to reduce the amount of currency minted or printed and adopt digital alternatives.

Its inefficient to process

Anecdotally, we all know paying by cash takes more time than making a card payment. When paying for an item by cash, you have to open your wallet and find the right bill denominations. You count the bills and coins and pay to optimize the coins or bills you get back. The cashier then needs to count the exact amount of change to give back to you. You then stuff this amount in your pocket or neatly tuck back into your wallet or purse. These notes and coins bounce around your pocket and find themselves into odd corners and ends of car, couch, trains, planes or random corners of the world. It’s just a messy and not to mention, un-hygienic process that’s surprisingly still in practice today.

Its being surpassed by alternatives

The 20th century brought changes to the underlying perceived utility of cash. Here are a handful of the top five inventions that reduced the need to carry cash:

  • Credit Card – The credit card was invented by the Bank of America in 1958. The name of the card itself was the BankAmericard, and it was made of paper with a $300 spending limit.
  • Debit Card – The first debit cards in the U.S. were issued in 1966, according to the Kansas City Federal Reserve.
  • Peer to Peer Online Payments – In 1998, PayPal started revolutionizing and popularizing online peer-to-peer payments. By making these payments more frictionless, people started seeing better ways of taking and accepting payments without cash.
  • Contactless Payments – Contactless is a near-field communication (NFC) technology. It enables card payments with a tap rather than inserting a card into a chip and pin reader or a swipe. Contactless payments has improved the security and speed of card payments for low value transactions.
  • Cryptocurrencies (Bitcoin) – Bitcoin was invented in 2009 by the apparently pseudonymous inventor, Satoshi Nakamoto. It enables peer-to-peer online payments without the use of an intermediary.

Budgeting cash expenditures is difficult

Tracking cash expenditures is a nightmare. You’ve got not traceability other than relying on your memory and a note taking app or spreadsheet. No one can expect to balance a budget using such cumbersome tools. Every cash transaction means another entry into your journal. Keeping track of these expenses becomes its own part-time job. Most banks now provide budgeting features within their mobile and desktop apps. These compelling features give customers strong reasons to never use cash again.

Wrap up

The few benefits of anonymity and potential negotiating leverage are pale in comparison to the negative impacts of holding onto cash. The technological advances for payments in the 20th and 21st century have diminished the justifications for holding onto cash.