Paper or Plastic: Cash Is Dead

April 16, 2012 By: erik Category: Complaining, Musings, Spain, USA 588 views

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Fourteen Thousand EurosI just got back from a ten day trip to the USA in which I ran a bit of an experiment: I never carried a single dollar or cent of US currency on my person. All my transactions were electronic using a debit card, even the extremely cheap ones like buying a $0.99 bottle of water from a convenience store. None of the cashiers even batted an eye when I pulled out the plastic for such a tiny purchase. In Spain, I suspect they would refuse your business if you tried to pull a stunt like that.

As with many other things involving technological infrastructure, Spain is about 20 years behind the US on credit card usage. When someone in line with me at the grocery store has a purchase of over 50€, they pay with a credit card about 30% of the time. And the credit card companies charge the vendor a significant fee for the transaction, which is why vendors discourage card usage when they can. Almost everything is still done with cash in Spain. No one would ever, ever, ever pay for a drink at a bar with a credit card. A whole meal for four, perhaps, but never a drink. Yet paying for a drink at a bar with plastic is quite common in the US. Of course Spaniards rarely drink more than one drink in the same bar, so the “starting a tab” concept would never occur to anyone.

BOA Visa LogoOne thing I love about going plastic-only in the US is that it gets around that horrible sales tax that causes purchases to be higher than the price listed on the items in the store. I hate that! In Spain, the VAT (or IVA, in Spanish) is included on all the prices, so if you’ve got one item that’s 0.95€ and another that’s 2.25€, you can go ahead and count out your 3.20€ while you’re waiting in the checkout line and hand over the exact amount to the cashier. That sort of calculation is all but impossible in the States.

The second thing I love about using only a debit or credit card in the US is that it allows for more accurate tipping. Several times I’ve noticed items priced on bar and restaurant menus such that, if you don’t want to deal with coins (who does?), you’ve got to give a 30% tip. For instance, say your bar bill comes to $3.05. If you drop four $1 bills on the bar and walk out, you’ve left a 31% tip. But when you are given the blank space to write in any value you choose, and you won’t have to deal with change in return, exact percentages are more accessible.

The Visa- BirdThe third thing I love about using plastic rather than cash is that you automatically get a record of your purchases. Sometimes, in Spain, I’ll take a couple hundred euros out of the ATM and then, after what seems like a few short days, I’m out of cash again and I have to rack my brains to remember where it all went. Sure, it’s possible to keep a diary of each transaction, but it’s such a bother that I would never do it. Knowing where you’ve done business before can help the next time you have to search for car hire USA or other repeating transactions.

Coin BouncingI’ve lived so long abroad now that when I go back to the States, the green money looks funny and fake to me, not like the colorful Euro notes and coins that are valuable enough to take the time to bend over and pick up off the ground. The US coins are so worthless I’d rather just not have a quarter than lug one around in my pocket all day.

I dare say that one could live quite comfortably in the US with a wallet only big enough to hold a drivers license and a single credit card. That’s something I miss in Spain.

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  • Bawa

    I am the opposite. Deliberately have gone back to cash for keeping track of money spent., after starting my adult life writing cheques in pubs for a drink sometimes!

    Also, I do not think that technological state of the country has much to do with it. In India, you can pay quite a lot with cards now, and ATMs are everywhere, but in Japan – arguably much more advanced than the US, at least to a visitors eye- it is a cash-only society. Only the very biggest department stores will take cards, especially foreign cards. It is also the only country where I have had great problems getting cash out of ATMs: there are loads around most of them are only for local bank cards!!!!

    But it is true that it is years since we bothered to take any foreign currency of destination with us, relying on their being an ATM at the airport accepting our local “Caja card”. Best rates and very low commissions.

    Haha, and like a true Spaniard I never tip. so that type of cash problem never arises in Spain for me.

  • aquariumdrinker

    That thin wallet you describe sounds great. I never carry cash, but I still feel like I’m hauling George Costanza’s wallet after you factor in two credit cards, an ATM card, driver’s license, health insurance cards (a separate one for dental, plus a card for spending from my health savings account), conference calling detail card, MARTA card, Zipcar card, and building access badge. (And that’s just from memory – there may even be stuff in there that I’ve forgotten.)

    This is all to say that the promise of using my phone as ID and for payment is painfully slow to bear fruit.

    • Yeah. Nothing in there that couldn’t fit on a chip under your fingernail, either.

      • aquariumdrinker


    • i can not recommend this wallet enough:

      i’ve tried lots of different ones, incuding the jimi and other weird ones. but this sucker is perfect. it holds 4 cards securely and the money clip side is the best money clip i’ve ever used. it really does hold 1 bill securely like they claim.

      i keep 4 regular cards (license/credit/debit) and 3 paper cards (health and voter).

  • Yep, that’s also something I hate in Spain, specially because of the idea behind it, as you pointed out, it is not so extended because of the commissions the banks charge, they are just insane! I remember trying to get money from an ATM of my bank and after walking four of them out of service or with no money going to an ATM from another bank and charging me 2 euros for getting 20 euros, that’s 10%!

    Here in The Netherlands it all works with cards and it is great! In shops you can find a sticker that says “Kleine bedrag? Pinnen mag!!” meaning “Small amound? You can pay with card!”, even in cafés or wherever, it is also pretty common to ask to charge more money and get the rest back in cash, using pubs as ATMs.

    And I must disagree with Bawa, I am also Spanish and normally I tip waiters when they provide good service and it is what I have always seen… of course I am not tipping a guy that puts me just a glass of wine in a bar, but if he serves the tables and is nice I always left something…

    • Bawa

      I may leave a token tip in a restaurant, but never 10-20%. Firmly believe bars and restaurants should pay a decent salary to their employees, independent of tips.

      Bank commissions? The maximum I have been charged to withdraw money from an ATM with my card from a Caja- internationally- is 90 cents. And I am talking about pretty far-flung places around the globe here. Within Spain, 50 cents, if it is not my bank.
      American & Diners Express are the international cards people dislike most when we have travelled because they charge 6% of the sale to the vendor. Visa is 3 or 3.5 % and a debit card like my Caja card used to be 1.5 % last time I talked to a shop owner about it.

      But I am looking forward to our new transport card which will allow us to store cash to pay for loose change things electronically if we want 🙂

      And as I said, in Tokyo I was not able to pay the airport train tickets with a credit or debit card. No ATM in the train station accepting foreign bank cards. A dash to the streets outside looking for a 7-eleven of all things to take cash out. And that is country with latest gadget and technology for everything. But that is the fun of travelling.

      • Well, about the commission I was talking about I can tell you that I had a BBK (so a “caja)” Master Card and tried to get money from a BBVA. With the same card in Prague, Paris or Amsterdam I have got less commission and getting much more money…

        I agree with you in the first paragraph, I also think that salaries should be decent enough to pay them, that’s why I said I don’t tip always, just when I get good service, I think it is nice, specially in places you go more or less often.

  • Lee

    It drives me batshit that they’re now making a big deal about controlling cash payments in Spain to eliminate the underground economy but won’t let you pay, for example, at the post office with a bank or credit card. On  my last job I was in charge of mass mailings that we did every trimester (about 1500 pieces) that as second class mail would cost about 500€, and would have to pay in cash. Same with Hacienda and other agencies. I don’t get it.
    (And don’t get me started on Caja Madrid charging me 3€ to DEPOSIT A CHECK.). 

  • I also find that credit card purchases take SO long in certain places — the grocery store for one. I mean, in the US, oftentimes the credit card/debit card purchase is faster than any other means! But in Spain, when someone pulls it out, I always sigh, like, “Come on, do you need to pay for your 20 euros worth of groceries with a credit card?” In the US, I sigh when someone pulls out cash, because a lot of times they’ll count their exact change out, which … ugh.

    I always go through that phase, “This money looks fake!” But since I’ve been back and forth since 2008, I am used to it and readjust fast.

    I hope you had a good trip!

  • Let’s see, I think the lowest amount I’ve ever used a credit card for here in Spain was about 7 euros.  It was in the supermarket (hiper) and they accepted it, but I usually pay in cash for those amounts.  I do have a special card to pay for the bus, but I can’t transfer the money directly from my bank account to the card, which is lame.  It would be convenient not to have to carry cash around, and so true about how it would be easier to keep track of spending.  But I sometimes do worry about using a credit card for everything, since there’s more and more credit card theft going on all the time.

    I haven’t been to the U.S. for so long that I had forgotten all about the sales tax thing, that is a pain.  It’s so much more convenient having it included in the price.

    On the tipping thing in the US, card use aside, I really disagree with the system of obligatory tipping.  A 30% tip is just ridiculous.  Restaurant owners should just pay decent salaries, and tips should be voluntary, a way of showing that you found the service to be more than just acceptable.

  • Oh, and I really like that coin photo!

  • A Basque in the Americas

    I agree with Bawa that this is not a technological state, but a cultural one. I found too many toll roads and bridges in the US that got no cards, only cash or in-car wireless device payment,  
    while all of them in Spain get cards. 
    So is not about technology, but about what people is used to, or expects.In large cities in Spain I never used cash at all (I have an iPhone case that holds ID and couple cards and that is all I take!), but in villages true you need some cash. Last year came to work in Canada and US, and I manage fine with my iPhone case… except in Manhattan, there I found so many places that reject cards unless you are over certain amount. 
    I also find interesting how easy is getting a credit card in the US, while in Spain is far more complex. 
    On the other side, bank-to-bank money transfers are so easy in Spain (with the consistent bank account numbering) while so messy in the US. Canada is better but a bank-to-bank transfer takes 7 days!!

    And checks!!! I was really surprised when I got a check book with my bank account in Canada, in Europe only France goes on using these paper things so much as in Canada!