Updated: May 30, 2023

9 Reasons Why Cash Is No Longer King and Your Faith In Plastic Will Be Restored

Cash is dirty, costly, and not always very convenient to get. Here are 9 reasons why cash is bad for you.
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Cash is bad for you. That might sound blasphemous, but if you’re one of those people who swears by cash and cash only -- as in actual dollar bills -- you might be harming yourself more than you know.

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Cash is great when it’s used properly and definitely has benefits. Carrying cash won’t get you into debt like swiping a credit card might, for instance, and it won’t make you overspend. Plus, some businesses only take cash. But there are plenty of reasons why cash is bad for you. Here are nine of them:

1. It’s not easily recovered.

If cash is stolen or misplaced, good luck recovering it. With credit or debit cards, you can call your financial institution or bank immediately and prevent yourself from losing a big amount of money. In fact, if you report an ATM or debit card missing before someone uses it, the Electronic Fund Transfer Act says you are not responsible for any unauthorized transactions. If you report a lost or stolen card within two business days after you’ve learned it’s missing, you’ll only be on the hook for paying up to $50 of any unauthorized transactions. But if you only carry cash, chances are you’ll never see that money again unless you’re really lucky.

2. Less cash, less crime.

Researchers at the University of Missouri, St. Louis, recently studied what having less cash in circulation might mean for crime rates. Researchers examined Missouri to see how crime was affected when the when the state switched from handing out welfare checks to using an Electronic Benefit Transfer system. Findings show that overall crime decreased by 9.8 percent and that the rates of burglary, assault and larceny fell as well. Yet another reason why not carrying much cash with you might be wise.

3. It’s not convenient for big purchases.

If you’re making a large purchase, carrying cash is simply not a viable option. There’s only so much money your wallet can hold. And if you carry around a big briefcase or bag with cash, be careful you don’t lose it or become a victim of a theft. If you can responsibly use a debit card, it’s a great alternative to cash.

4. It’s costly.

Swiping a credit card is certainly costly if you have to pay interest, but cash is certainly not free. According to a study conducted by researchers at Tufts University, some 2.1 billion fee-carrying ATM transactions occur each year in the U.S., incurring about $3.85 in fees. Moreover, the study found that consumers spend an average of 28 minutes per month traveling to the ATM -- precious time that could be used for more leisurely activities.

5. It’s dirty.

It’s no surprise that cash is dirty. After all, it gets passed around frequently. But it might surprise you to find out just how dirty it is. Researchers from New York University recently conducted the first comprehensive genome study of the DNA found on money and findings reveal that there were 3,000 types of bacteria on a set one one-dollar bills. Among the microorganisms found on the bills: species that cause acne, gastric ulcers, and food poisoning. Yuck.

6. You can’t use it online.

Online shopping is a convenient time saver, but you won’t be able to make any purchases over the Internet without using some sort of online account. Whether you have a debit or savings account or utilize an e-commerce business like PayPal, if you want to shop online you’ll have to deposit your cash somewhere.

7. You lose out on benefits.

It’s not like having money is a bad thing. But someone who wisely invests their cash and properly manages their finances is more likely to end up better in the long run than someone who hoards his or her greenbacks. A wise money manager will put money away for retirement in either a 401(k) plan or an IRA and enjoy the benefits of compound interest.

But someone who is scared of investing might keep their cash under a mattress, where it won’t accrue any interest. Someone who is responsible with money might open a credit card and enjoy the benefits and rewards that come from shopping at certain retailers and dining at specific restaurants -- benefits that a cash-only consumer would not be able to experience. Plus, having a credit card and using it carefully will help someone build a credit history.

8. It won't give you extended warranty.

Many credit cards offer warranty for purchases you make on the card for a defined period of time, oftentimes for a year beyond the manufacturer's warranty. If you can responsibly use a credit card -- and sign up for one that offers the extended warranties deal -- you don't necessarily have to purchase store warranties. It's a good safety net in case you purchase bogus or defective merchandise. Paying with cash, unfortunately, means you won't enjoy its benefits.

9. It's not as easy to track.

Unlike a credit or debit card, purchases you make with your money can't be examined online. The only way that you can keep track of how much money you're spending if you're using cash is by counting it out and keeping a detailed log. With a credit or debit purchase, you can log onto your financial institution's website and see how much you've spent over a period of time, allowing you to adjust your spending habits.