In A Pandemic: Stockpile Cash or Go Cashless?
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What is the main topic discussed in this episode?
This is your Money Briefing for Wednesday, March 11th. I'm Charlie Turner at The Wall Street Journal.
Should you stockpile cash for a coronavirus shutdown?
In a coronavirus pandemic, is it better to stockpile cash or go cashless?
We live in this digital world, and actual physical cash gives you the sense of certainty that digital and electronic payments may not.
We'll talk with The Wall Street Journal's Veronica Dagger in a moment.
With the number of coronavirus cases continuing to climb, Americans have been stockpiling items like canned food and cleaning products to prepare for an emergency shutdown.
Why do people feel safer holding physical cash during a crisis?
Some have also wondered if they should have extra cash on hand in the event of an emergency. But as the coronavirus has now become a pandemic, how wise is it to carry cash? Joining us now is Wall Street Journal personal finance reporter Veronica Dagger. Veronica, we've become more of a cashless society with credit cards and mobile payments. But why do people want to stockpile cash in a situation like a virus outbreak? What's the psychology behind it?
Psychology is a really good word because, you know, I spoke to a professor at Harvard Business School who studies the psychology of money. And she said the desire to hold more physical cash during a time of crisis may give some people a sense of control over the situation.
How much emergency cash should financial advisors recommend keeping at home?
So we live in this digital world, as you said, and actual physical cash gives you the sense of certainty that digital and electronic payments may not.
So isn't it wise to carry a certain amount of cash to last for a few days in any case? Or, you know, are people tempted to carry this too far, like hide cash under a mattress?
Right. Yeah. I mean, some people still do the hide cash under the mattress, right? Anything can be taken to extremes. Financial advisors I speak to say under any circumstance, whether it's coronavirus or anything else happening in the world, it's always good to have enough cash on hand.
Can exchanging cash spread the coronavirus and should we go cashless?
to be self-sufficient for at least a few days because you never know what's going to happen. For example, it could be a natural disaster and you want to be prepared. But yes, people can take things too far. You need to do what you feel comfortable with. But you also have to realize there is a risk of having cash in your house. You could get robbed.
Sure. Are there worries that the exchange of cash itself might spread the virus?
Will the pandemic disrupt ATMs and the banking system?
Should we be cashless in a pandemic? Sure.
So some people are afraid of that. Largely, those fears are unfounded. An epidemiologist I spoke to said, you know what? She does not expect the coronavirus to travel far and wide on money. You know, just use common sense. You're handling money. You should wash your hands after handling money anyway on any circumstance.
What are the chances that the spread of the coronavirus will affect the banking system? Will I still be able to access my ATM?
Right now, there's no expectation that this is going to affect the banking system, right? Because this isn't tied to electricity, like, say, a hurricane or a tornado took out the electricity in certain areas of the country, and then that took down the ATM. You don't need to worry about that for the coronavirus right now, people are saying.
What safe payment alternatives and hygiene tips should consumers use instead of cash?
And you should also take comfort. Some companies like Citibank, which is one of the major big banks around the country... They're taking extra procedures to clean their ATM. So they're using stronger disinfectant products on any surface like an ATM that is that high-touch surface.
Okay. We touched upon mobile payments briefly. What sort of payment methods could somebody use if they were afraid to exchange cash?
You know, you could use a digital wallet like Apple Pay or Google Pay. And you may see some people using these wallets more often. But, you know, you have to understand your smartphone has a ton of germs, too. Right. And so you want to clean your hands. You want to clean your smartphone no matter what the situation, just because it's good hygiene and helps diseases like coronavirus from spreading.
And we should be remiss if we didn't point out the fact that, you know, people still use cash for a great portion of their transactions.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:05–0:11
2
Should you stockpile cash for a coronavirus shutdown?
0:11–0:47
3
Why do people feel safer holding physical cash during a crisis?
0:47–1:29
4
How much emergency cash should financial advisors recommend keeping at home?
1:29–2:05
5
Can exchanging cash spread the coronavirus and should we go cashless?
2:05–2:29
6
Will the pandemic disrupt ATMs and the banking system?
2:29–3:21
7
What safe payment alternatives and hygiene tips should consumers use instead of cash?
3:21–5:00
Speakers
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