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Ask George: In restaurants, do you tend to use cash, credit, or debit? Joe E. St. Louis, Mo.
Editor's Note: This article was updated from an earlier version.
I use all three, depending on the situation, and a solid case can be made for each. I am one of a dying breed who still carries cash, but do so for a good reason.
Cash:
The upside:
When paying a tab at a busy bar or when trying to quickly pay a lunchtime check (when seemingly all other diners are in a hurry and doing the same thing), cash is truly king. You’re back at the office while your poor server is still deciphering a tableful of separate checks. You're hassle free at the "cash only" places and head of the line when the charge machine goes down. Oh, and ask any server if they'd prefer their tip electronically or in cash money. I've said before that cash is liquid, secure, immediate, there are no fees (or strings) attached, and best of all, it's private.
The downside:
Many people feel uncomfortable carrying cash, be the amount large or small. (I contend that they ought to be more concerned flashing $1000 cell phones, but that's another argument.)
Credit Card:
Credit cards fell out of vogue when interest rates ticked up to usurious levels and then became popular again when rewards programs burst onto the scene.
The upside:
If you’re disciplined about paying off your rewards cards in full each month, there’s no reason not to take advantage of the free miles, cash-back offers, and travel perks today’s credit cards now provide. I tend to use credit cards exclusively when traveling, due to their added safety and protection. (Side note: The lengths to which credit card companies go to lure new members cannot be ignored. One card is currently offering enough sign-up points for two round-trip air tickets. I have a friend whose hobby is signing up for these cards just to reap the initial benefits. He travels extensively, dines well, drives premium rental cars, and stays in fine hotels, much of it related directly to credit card companies’ initial offerings.)
The downside:
Letting balances accumulate means you’re on the hook for those high interest rates. (Pay-in-full cards, like AMEX, charge restaurants a much higher rate than other credit cards, so if you want to cut the restaurant some slack, leave the AMEX in your pocket.)
Debit Card:
Due to their ease of use, debit cards are today's preferred payment option (especially with younger consumers), and they're largely replacing cash.
The upside: Debit transactions are quick and provide an electronic paper trail; they're the card of choice in fast food and fast casual restaurants. These restaurants prefer that customers use debit cards over credit because the interest rate paid is roughly half as much. So, again, if you want to do a restaurant a little favor, use your debit card.
The downside: Throwing out PIN numbers randomly has been proven to be risky. If stolen, debit card holders are often temporarily liable for fraudulent purchases and worse, making them more risky than credit cards. In this book, convicted con artist Frank Abagnale (the subject of the Leonardo DiCaprio movie Catch Me If You Can), says, "To avoid identity theft, never, ever use a debit card. I don’t own one. I never have and I never will. I don’t recommend them to anyone — not my family, not my friends, not you."
Mobile Wallets:
Since this article was originally published, the major mobile platforms have all introduced their own form of electronic wallet—Apple Pay, Google Pay, Samsung Pay (Walmart has its own version, Walmart Pay)—but to date, the adoption rate has been less than expected (perhaps one of the reasons Apple introduced its own credit card, Apple Card, earlier this year).
The upside: Mobile payment platforms are said to offer better convenience, speed, and security than conventional payment methods. Transactions are conducted with a pass of a smart phone, smartwatch, or tablet, and can manage a user's credit, loyalty, and rewards cards.
The downside: While popular abroad, so called "contactless transactions" are still unfamiliar in the U.S., so consumers have not pushed merchants to procure the processing terminals to make them more mainstream. On the flip side, retailers have been reluctant to jump on board since customer purchase data is not made available to them (as it is with store cards), an obvious and costly disincentive.
If you have a question for George, email him at gmahe@stlmag.com. You can also follow him on Twitter @stlmag_dining. For more from SLM, subscribe or follow us on Facebook, Twitter, and Instagram.
