WEST PALM BEACH, Fla. -- Paying with cash for anything other than a small purchase is becoming more rare, and many people use their debit or credit cards for everything.


They enjoy points and other benefits, such as not having to carry a wad of cash.

But isn't paying-as-you-go with cash a good idea if you have a problem charging too much on a credit card? It can be, but then again, you can't use cash for online purchases, or to buy snacks on many airplanes.

There's the germs that are all over cash as it goes from hand to hand, and studies have shown traces of cocaine are on it, too. While cash can obviously be stolen, if that happens, your credit has not been breached as with a credit card theft.

Don't forget the discounts gas stations give to cash customers. The owners want to avoid credit card transaction fees.

There's something to be said for the psychological impact of paying with cash. Parting with a $100 bill seems a lot more difficult than just running a card through a machine.

Consider also that cash transactions are anonymous. "Big Brother" isn't tracking what you just bought, but you still have a receipt for returns.

In 2011, 27 percent of all in-store retail purchases were made with cash and that is expected to drop to 23 percent by 2017, according to Javelin Strategy & Research in Pleasanton, Calif.

Although cash is the most widely used method of payment, debit cards have the largest share of the in-store retail market by volume, followed closely by credit cards. Debit and credit cards will continue to dominate market share and will continue to pull dollar volume from traditional paper-based payment options; specifically, cash and paper checks, Javelin predicts.

The pros and cons of going cashless are many.

Now "The Cost of Cash in the United States," a Tufts University report released last month, says that cash is in fact costing Americans $200 billion a year, or $1,739 per household.

How could that be?

First of all, there's an estimated $40 billion in cash stolen from businesses and $500 million taken from individuals. Then, there's the $8 billion a year consumers pay at ATMs to get their cash. Americans spent an average of 28 minutes per month traveling to obtain cash, the study found.

The study was based on a survey of 1,000 Americans, and it's also worth noting that the Tufts entity that conducted it, The Institute for Business in the Global Context, receives support from the MasterCard Foundation and MasterCard Worldwide as well as the Citi Foundation and others.

The 12-minute survey asked questions such as how people obtain cash, how often they exchange cash for checks or bank deposits, and how much cash they keep in their wallets and houses.

Those in the $20,000-to-$100,000 income bracket report they usually keep less than $100 in cash on hand.

Other findings:

-- The cost of cash is higher for poor and unbanked Americans than for other groups. People who lack access to banks carry larger amounts in cash and pay the most fees access to cash.

-- Americans under 35 keep half as much cash on hand as those 55 or over.

-- Men carry nearly double the amount of cash that women do. Men are slightly more likely to keep some cash always on hand than are women, and they use 50 percent more cash per month than women do.

For businesses, the study's authors say, there is the cost of keeping the cash in safes and trips to the bank, not to mention having enough available to make change.

It is no surprise that the use of cash imposes costs on the U.S. government, the authors state, just as it does for American consumers and businesses. Most significantly, the government loses billions of dollars each year from underreported income due to cash transactions, particularly those in the informal economy.

In addition, costs accrue from the production and management of currency.

Here are the study's conclusions:

-- The most important cost of cash to the U.S. government is forgone tax revenue from cash transactions. A conservative estimate yields this value to be $100 billion annually and other estimates place it at $400 billion to $500 billion.

-- The government also incurs cash-related expenses from the production and distribution of cash in the U.S. In 2012, these costs totaled $1.2 billion.

Susan Salisbury writes for The Palm Beach Post. Email: susan(underscore)salisbury(at)pbpost.com.

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