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For better or worse, the "cashless" society is slowly becoming a reality. Today, more often than not, Americans use plastic rather than cash or checks to buy everything from clothing to groceries, according to the American Bankers Association.

Cash and checks now account for just 47 percent of all purchases in stores, falling from 57 percent in 1999 and 51 percent in 2001. Today, we can use cards to pump fuel, feed parking meters, buy a Big Mac, grab a Coke from a vending machine or gamble at a casino. Younger people are more likely to use plastic and many are ditching cash and checks altogether.

People are using cards even for very small purchases, which in the past almost exclusively were made with cash. MasterCard customers reported using debit cards for about one-third of all of their purchases of items costing $20 or less last year. That is a 61 percent increase since 2001, according to the company.

Richard Feinberg, a professor of retail management at Purdue University, has seen the evolution toward a cashless culture in his own family.

"I don't believe my grandparents ever used a credit card," he said. "My parents used credit cards, but never debit cards. And I won't pay cash for anything."

But the transition is happening less quickly than many thought, Feinberg noted.

"Twenty years ago, people were predicting that no one would be using cash or checks within five years. So this transition has been long and slow. But we're definitely moving in that direction."

Research conducted during the past few years does show, however, that cash no longer is king for consumers, and handwritten checks are falling out of fashion as well. Driving that trend is the emergence of debit cards, which with a quick swipe of the hand electronically deduct funds from checking accounts.

More than 30 percent of purchases in stores now are made with a debit card, compared to 21 percent four years ago, according to the Bankers Association. Credit cards account for about 21 percent of purchases in stores, a figure that has been holding steady, the group reported.

But Rob Bennett, who publishes and writes a daily blog for the Web site PassionSaving.com, warned the convenience of the debit card in particular may cause people to lose sight of their spending.

"I have shied away from the debit card for just that reason," he said. "It's an abstraction. When you are planning to spend $100 in cash for dinner, you feel guilty. You think, 'Maybe I'd better get the cheaper wine.' With a card, you just forget about it."

And AARP warns its members that customers who use the cards may have less protection if something goes awry with a purchase. Banks may be reluctant to reimburse people for items that never were delivered, are damaged or don't work properly, the organization points out on its Web site. Banks may also charge monthly fees, as well as penalties for dropping below a required minimum balance.

# posted by Medical Information : 3:37 AM