Many people view the Move Your Money campaign to be a huge success, with hundreds of thousands of new credit union and community bank accounts being opened over the last couple months. More money in your pocket with better bank rates and more money staying in your community in the form of loans to your neighbors and local small businesses. When we work together, we can have a huge impact.
But moving your money is just the beginning of taking power back from the too-big-to-fail banks. There is an even more insidious tax on our retailers and small businesses that either cuts into their bottom line or sadly is passed right on to the consumer in higher prices, and that is the credit card transaction.
Retailers are charged upwards of 2% of every credit card transation when you swipe and sign the slip for a credit card charge. And that 2% is either taken out of the business or passed on to you via higher base prices. You are paying for the convenience of not having to pay in cash. That's 2%. Of every transaction!
Sure, you might get some miles on some crappy points program as a little kick-back from your card issuer. But that's a bribe. They are bribing you to keep your money in their system. You have essentially committed money to be spent with their network of merchants in most points system, and those points rarely add up to a fair return on what you are being overcharged at the paystation. You are essentially giving them a loan, and maybe you will use those restrictive points to get something back from the loan you have given to the banksters. Meanwhile, the restaurant you just ate at either had to charge 2% more across the boards for the transaction, or has to eat the 2% loss. Other customers paying cash are paying higher prices to subsidize your use of the credit card, and the kickback in the system ensures you are part of the problem.
Fortunately, the solution is very simple. PAY WITH CASH.
- When you go to the restaurant, pay the bill with cash.
- When you go to the grocery store, pay cash.
- When you pay for parking at the municipal parking lot, pay your city with cash.
- When you buy those holiday gifts this season, pay cash.
- When you buy some booze at the corner store, pay cash.
- When you set up your automatic bill pay for your gym membership, do it out of your new credit union account. Don't have it billed to your credit card.
- When you donate to progressive political candidates, do it with a check or cash!
I think you get the picture. By paying with cash, you are helping to give the real businesses that are providing real value to your community and create real jobs their very own 2% stimulus package.
It seems like a very small amount, but as we have seen with the Move Your Money effort, if we work together we can have a huge impact.
So, don't stop at opening your credit union account. Make sure to move your mortgages, car loans, savings, and other business to a credit union, and eventually, cut ties with those corporate monoliths, the mindless terminators who will stop at nothing to maximize profits.
And... carry $50 or $100 of cash in your wallet or purse. Pay your local retailers in cash and give them a 2% raise this holiday season. Stop allowing yourself to be bribed by those lame points programs. Pay cash, help your money stay in your community, and put another nail in the coffin of too-big-to-fail.
UPDATE: After lurking and sporadically blogging here for years, I've finally lost my Wreck List Virginity! Woo, thanks y'all. Lots of great thoughts about cash strategies in the comments, so read and enjoy. One final thought before I return to my day job: I would love to see this grow into a "Cash for the Holidays" type of campaign, much like the Move Your Money campaign. I think that'd be one great way to make it relevant to current events and Occupy. Wouldn't it be a hoot to see an actual impact on the bottom line of retailers this holiday season? When they slice and dice those black friday shopping numbers, I'd love to hear the analysts saying retailers received a bigger share of the holiday shopping pie through cash transactions, while the too-big-to-fail fell short this quarter. :)
UPDATE 2: If you are looking for another reason to start paying with cash, commenters have pointed out another fantastic reason. Big Brother won't know what you are spending your cash on. Marketers have less ability to spy on your behavior. So not only do you get the feel-good moment of paying your favourite locally owned restaurant an extra 2% instead of sending it to BoA, Citi or Chase, you can also feel great in knowing that you have a little bit more privacy back in your life too!