Will Cash Make a Comeback?

With the recent spat of major retailers experiencing data breaches tied to credit and debit card payments, a number of U.S. shoppers are embracing cash.

February 05, 2014

NEW YORK – The news lately hasn’t been good for those who pay with credit and debit cards, as the number of retailers announcing compromised data grew. Target, Neiman Marcus and Michaels all revealed security breaches left customer financial information vulnerable. With Congress looking into consumer data security this week, some U.S. shoppers are shifting to the old standby: cash, The New York Times reports.

In a poll released the last week of January by The Associated Press/GfK Public Affairs & Corporate Communications, 37% of U.S. respondents had used cash in lieu of plastic because of the data breaches—nearly as many as viewed personal credit reports because of the thefts. Paying with plastic has become such a way of life, with small vendors like food carts even accepting credit or debit card payments. “Cash has its own drawbacks in terms of possibly being mugged and of keeping track of your expenditures,” said Susan Grant, director of consumer protection at the Consumer Federation of America.

Paying with greenbacks has faded from the lives of many people. For example, Nicole McNamee used to whip out the plastic for nearly every store visit. Then a series of fraudulent purchases on two of their cards led her and her husband to take a vow to pay with cash as much as possible. “We said, ‘Let’s just give ourselves a dollar value and pay cash for everything,’” she said. By spending only what they have in their wallet, they’ve been able to keep on track with their budget.

In spite of anecdotal evidence of a small but growing group of Americans switching to cash, there is no data that supports the change. In fact, some studies have shown little change in how Americans use credit and debit cards.

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