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Extension > Family > Personal Finance > Culture and Resources > Paying Cash – No Problem?

Culture and Resources

Paying Cash – No Problem?

Rosemary K. Heins, Extension Educator – Family Resource Management

2006

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Paying with cash is common among those who do not have a bank or credit union checking account. People who do not have financial accounts are part of a group labeled the "unbanked." Upwards of 22 million American families are estimated to fi t this category plus there are millions more who may be "underbanked," meaning they have accounts but they use alternative financial service providers such as a check cashing outlet. African Americans are over four times more likely to be unbanked than whites. One-third of all Latin-American immigrants were unbanked in 2000 (Stuhldreher & Tescher, February 2005).

Why do people pay with cash rather than through a bank service?

There are several reasons people do not have a banking relationship.

Cost

Convenience

Income Constraints

Culture

How can people protect themselves when paying with cash?

When people pay bills or purchase products with cash it is important to obtain proof of payment. For most purchases, a sales receipt serves as proof of payment and a record of the service or product cost. People should keep their sales receipts and use them for documentation should the product need to be returned.

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