Credit Cards Are So Last Year
Even Visa, creditor extraordinaire, is ready to announce the end of the credit era.
For the first time ever, Visa handled more debit card transactions than credit transactions, with debit sales accounting for 50.4 percent of Visa’s processing volume.
To Visa execs and most everyone else, this is yet another signal that Americans’ credit binge is over. To the more cynical and the more insightful, it signals that Americans are far from ready to financially fly right.
Debit cards, rather than mitigating the debt crisis, actually exacerbate it. Completely overlooked is the role that cashless transactions have played in the structural takedown of this country’s financial framework.
Holding onto money is a matter of holding money: Holding it – handling it, touching it – makes it real, makes it mean something. And so letting go of it – physically handing it over for someone else to hold, is meaningful.
That people have switched from credit cards to debit cards means only that, maxed-out, they know not how they got in the hole, nor how to get out of it.
Let’s face it: People have substituted credit for debit because they’re leveraged out, at the ceiling of their card limits. While it’s true that debit cards only let you spend what’s already in the bank, it is for that same reason that it’s just as easy to directly withdraw that cash oneself before spending it.
Swiping is simply not as a meaningful as spending. Even in a digital, virtual world, cash remains king.
And it’s not just a personal problem. Governmental debt, too, is a consequence of the naked cashlessness of the ways thinks are now done. By dealing in T-bills, zero-coupon bonds, mortgage-backed securities, and inflation-indexed treasuries (anyone? Bueller?), the government felt no connection or obligation to the money behind these obfuscations.
Money means something. Duh, right? It’s not a radical statement, so why is it becoming a radical act?
Comments
By Plastic Patrol on April 30th, 2009 at 1:01 pm
Mande, don’t kill a fellow conservatives business. We are supposed to be pro business right?
By Pat Hendrix on April 30th, 2009 at 1:27 pm
I’m scrathching my head. Of all the lame and pointless posts by Mande, this might take the cake. Maybe we should back to a barter system. Then we can really appreciate the value of labor.
By Biggie Tea on April 30th, 2009 at 1:50 pm
I don’t agree with this at all. The rise in the use of debit cards is mainly due to the incresing number of things that you either can’t buy using cash or for which it is just easier to use plastic. 15 or 20 years ago, nobody bought anything online, pay at the pump gas stations were a rarity, and fast food places didn’t take plastic.
By Palmetto_Native on April 30th, 2009 at 3:16 pm
Im confused myself over the purpose of this article. It sounds for all the world like trying to vainly justify something….problem is, I cant for the life of me figure out what it is.
To somehow equate the act of physically touching cash as being more fiscally responsible than to electronically touch it is a real stretch.
Furthermore..whatever happened to the conservative mantra of “personal responsibility”? Thats the ideology that says that credit card practices and payday lending (among others) are OK because in the free enterprise system, an individual is responsible for his own actions.
Why do you even feel the need to weigh in on this?
By Joey Jo Jo Jr. Shabadoo on April 30th, 2009 at 4:20 pm
I would second Pat, but I’m most confused about about the government stuff at the end. Treasuries have been around since at least the Exchequer (in fact, many centuries before they figured out the whole witch thing). Just wow.
By Mike on April 30th, 2009 at 7:13 pm
Sooooooo, if people just used paper money we’d be alright, and the government is somehow also beguiled into rampant spending by paperless transactions? Bizarre.
Government transactions were more-or-less paperless long before retail transactions were, and goofy, rampant government spending substantially pre-dates all of us. As Yoda would say, “A strange little post this was.”
By Mande Wilkes on April 30th, 2009 at 7:42 pm
Pat -
‘Value of labor’? Huh? Are you sure you aren’t a Republican down deep inside? There’s gotta be some such Freudian explanation for you to think that I’m talking up the ‘value of labor.’
Biggie Tea -
You’re right that internet purchases account for some of the increase in cashless transactions. But whatever the reason for increased card use, it’s the use itself that is the point of this post. Besides, it’s disingenuous to suggest that the internet is responsible for all the debit and credit card transactions. While cash isn’t feasible for those particular transactions, it is absolutely feasible for most day-to-day purchases for which people pay with a card.
Palmetto Native -
Ding ding ding! Personal responsibility is indeed the point: The responsibility to recognize things that contribute to poor decision-making. In my view, one of those bad influences is cashlessness.
Joey -
Of course government treasuries have been around for ages. And, as Mike notes, so have wasteful governments. *Not* a coincidence.
By Statesman on May 1st, 2009 at 12:13 am
My wife and I have no credit card debt even though we have one. We use the debit card because it is more convenient than checks. Transactions are recorded in the check register and the checking account is balanced every month. What is your point? I must be missing something?
By FWFIV on May 1st, 2009 at 7:26 am
Statesman-
I agree with you. Mande’s central comment “….that it is just as easy to withdraw the cash first…” makes no sense. At the least that means a trip to the bank, driving, traffic, waiting in line, etc. By her tortured reasoning we should not use direct deposit either, since the value of our paychecks is in some way less if we don’t actually see the cash in our hand. Taken to its logical conclusion, her idea would disallow electronic banking, paying bills online etc. Heck even writing a check for your mortgage payment would be suspect in her view, since we don’t actually see the cash leave our hands and go to the bank.
I hope that her idiotic positions are a weak attempt at some kind of Colbert type satire, but I fear that they are an even weaker try for some kind of Coulter-like fame and fortune.
By Pat Hendrix on May 1st, 2009 at 8:43 am
Mande, your meandering posts remind me of the Larry King column in USA Today. Are they meant as parody?
By Get Cash Back on May 1st, 2009 at 10:43 am
True very true. More and more people are realising this. The cashback phenomena is here to stay! People are wisening up to this now and opting for a cash back debit card to save money and not be left with paying credit charges at the end of the month and rightly so! Let’s turn the tables around finally on the credit card companies and make them make us money for a change!!