Adjusting to a Cash Only Lifestyle

Many people these days are switching to cash as their primary form of payment. Whether it’s because they’ve sworn off credit cards or had those cards shut down, many people are learning to adjust to life without plastic. More and more people are beginning to do without debit cards, too. Thanks to new fees imposed by the banks and the growing risk of “skimming” and debit card fraud, debit cards are not the simple, easy payment method they once were.

Living without credit cards, or any plastic at all, has its drawbacks, though. Many places only accept credit cards for payment. If you can get such a place to accept a debit card or cash, prepare to endure a lot of hassle and to provide a lot more documentation. Here are some common situations where a credit card is usually required and how you can get around it.

Renting a Car

Most car rental agencies want a credit card. This gives them assurance that they will get their money for the rental and any damage you cause. However, more and more places are accepting debit cards for payment. You’ll need to call before booking to find out the exact policy. You may also be asked to submit to a credit check, to allow a “hold” of money above and beyond the rental charge on your card, buy the rental agency’s insurance, or provide additional verification of your identity and income. Debit cards may not be accepted at all locations, so you may not get your first choice of location.

If you don’t have a debit card, things get more troublesome. There are fewer agencies that will accept cash for a rental. Those that do will likely require you to put down a substantial cash deposit. You’ll also have to submit more identity verification information such as pay stubs, proof of checking account, utility bills, proof of insurance, and possibly agree to a credit check. Again, you may not get your first choice of location or agency if you’re paying cash. You may have more success at local chains than at the major rental companies because smaller operators are freer to set their own policies and take people on a case by case basis.

Hotels

Hotels want a credit card to cover the cost of your stay, any incidentals you incur (pay TV, mini-bar, etc.) and any damage or theft. As with rental cars, the process is smoother if you pay with a debit card. You’ll want to call ahead to make sure debit cards are accepted and what the policies and any fees are for using one. As with rental cars, some hotels will subject you to additional identity checks and you may have to submit to a credit check, or have a certain amount withdrawn or held from your account daily to cover the room rate and incidentals.

If you pay straight cash, you may be asked to put down a substantial deposit, or to report to the front desk each day to pay for that night’s room. Prepare also to provide more information to verify your identity and ability to pay. Again, you might have more success at local establishments rather than national chains.

Cell phones/Cable TV/Internet

Many cell phone, Internet, and TV providers want a credit card when you sign up for service. You may not have to pay your bill with that card, but they want in on file in case you skip out on the bill or fail to return their equipment. Some will waive this requirement with a cash deposit, some won’t. If you want to pay cash, expect again to be subjected to a variety of identity checks. For cell phones and Internet, you have the option of using a no-contract service such as Virgin Mobile or TracFone. For TV, you may just be stuck with an antenna.

It is possible to rent cars and hotel rooms and sign up for services without a credit card, but you have to be willing to deal with a lot of hassle and sacrifice more of your privacy. If you do insist on not using a credit card, don’t yell and scream at the managers or reservation agents when they make you jump through a lot of hoops. Remember that they are making an exception for you and be polite. If you don’t like what they require, go elsewhere.

If you choose to live your daily life without a credit card, you have a few options other than pure cash for making payments. Here are three choices:

Debit Cards

As noted above, debit cards can make a credit-free life easier. Many online systems don’t even recognize the difference between a debit card and a credit card so you can use them to shop online or make reservations as long as the money doesn’t exceed that in your account. They are not always secure, though, so you have to weigh the risk that you might have your account emptied by a thief against your desire for convenience. While you’ll probably get your money back, it can take a while. Meanwhile, you are out the money.

Paypal

If you want to shop online without a credit card and without exposing your debit card to hackers, Paypal is one way to go. You need to keep enough money in your Paypal account to cover your purchases. While Paypal is a good service, it isn’t without risks and fees. Their customer service can be problematic and disputes are not always resolved in your favor.

Prepaid Gift Cards with the Visa/MasterCard/American Express Logo

At stores like Target and WalMart, you can buy prepaid gift cards that act like credit cards in some respects. You can use these to shop online or in stores. They are easiest to use if your purchase does not exceed the amount on the card. If you do, you’ll have to have the cashier ring your transaction in such a way that you can pay cash for the balance. If you exceed the limit while shopping online, you may not be able to select a secondary payment method so you may be out of luck at that merchant. Many of these cards charge substantial fees, so make certain you know what you’re getting into before you use them.

Store Gift Cards

If you want to shop online, you can buy gift cards for many merchants from “gift card malls” popping up in supermarkets and major chain stores. You can get gift cards for everything from gas to hardware.

Side not about gas gift cards: You can use gas gift cards at the pump for the convenience of paying without having to go inside (as long as your purchase doesn’t exceed the card balance). If you pay cash at most gas stations, you now must go inside and put down money before you pump. If you pump less than you put down, you then have to go back inside and claim your change. If you don’t put down enough to fill your tank, you have to go in and put down more if you want to keep pumping. Gas gift cards can cut down on that hassle.

It is possible to get by without a credit or debit card in the world, although it is no longer easy. Your best bet is to keep at least one credit or debit card in your possession to smooth the way. Keep it frozen in a block of ice, or lock it up in a safe deposit box if you’re afraid you’ll use it irresponsibly. Only pull it out when you need to travel or do something where a cash payment will cause you more hassle than it’s worth or where you have no other viable option.

If you absolutely don’t want to deal with plastic in any form, be prepared to spend a lot of time providing identifying information and having your privacy invaded. It is possible to live a cash-only existence, but no one is going to make it easy on you.

(Photo courtesy of peasap)