I recently read an article that claimed America could save 10 billion dollars a year if we stopped processing checks. I’m thinking this figure included some layoffs so it wouldn’t be all positive, but it still caught my attention. When I was growing up in the 90’s picturing what life would be like after Y2K, I didn’t think checks would still be common exchange. I really thought we would live in a paperless economy by now. I also thought we’d be hovering like Marty Mcfly rather than driving so what do I know?
With that said, why are people still using checks? From a microeconomic view, there’s serious opportunity cost involved when you think about the alternative. I write 1 check a month for my rent payment (I’ll explain why I rent later); but I swipe my credit/debit card for everything else. On average, I receive around $400/year from my rewards programs. This is after deducting any costs of enrolling into the rewards programs. It’s not an excuse to go out and spend frivolously , but it’s fun to get paid for doing nothing. I pay $47/year to receive these rewards. I think it’s worth it.
If you’re not yet receiving incentives for using your credit/debit card I suggest you contract your bank or credit card company (and you should do so soon). With the limits coming to interchange fees, rewards programs may become less rewarding.