Living with credit, Protecting yourself

Puerto Rico’s pain underscores our reliance on debit and credit cards

John Egan

During the final hours of my first trip to the seaside resort town of Puerto Vallarta, Mexico, I dashed to an ATM to withdraw cash so I could buy last-minute gifts for a couple of friends back in the U.S.

Then panic set in. The ATM crashed while my debit card transaction was being processed. The card disappeared. The machine had chewed up my main financial lifeline.

Back at my hotel, I feverishly called my bank to report the debit card’s untimely demise. I was informed that as a safeguard, the ATM had destroyed the card, and a replacement card would be mailed to me within a few days. Until then, though, I lacked access to my bank account via debit card.

My situation was hardly life-threatening, but it was frustrating.

So imagine how far beyond frustrated Puerto Ricans are right now: In the wake of Hurricane Maria, the vast majority of our fellow U.S. citizens on that island are unable to use their debit and credit cards to make urgently needed purchases or get urgently needed cash.

The reason? Because of electrical and communications outages, many ATMs have been rendered useless, and a lot of merchants and banks can’t accept debit and credit cards. Where Puerto Ricans can get money via their cards, lines are painfully long.

For now – and for probably weeks or months to come – Puerto Rico is effectively a cash-only society.

Certainly, the lack of access to cash is a hardship for Puerto Rico, yet it’s only one of a host of burdens confronting the U.S. territory. Residents are running out of food and drinking water. Many hurricane victims don’t have a roof over their heads. The list of problems goes on.

The inability to use debit and credit cards is exacerbating the more dire woes facing Puerto Rico.

In light of the suffering in Puerto Rico, it’s worth examining how attached we are to debit and credit cards.

I, for one, rarely keep cash in my pocket, so I depend heavily on plastic money. And I’m not alone: A 2016 survey by payment processor TSYS found that 40 percent of Americans prefer credit cards over other payment methods, with 35 percent citing debit cards as the top method and just 11 percent picking cash.

Even for small purchases, many of us are shackled to plastic. A 2014 small purchases survey showed one-third of credit card holders would go for a card over cash in making an in-person purchase totaling less than $5.

The tragedy in Puerto Rico and the shift in payment preferences in the U.S. makes me wonder what will happen when (not whether) we become a cashless society, in which all purchases are made with debit cards, credit cards or other electronic payment methods.

For instance, what if a disaster strikes and none of us, as is the case with many Puerto Ricans now, can buy groceries or gas with our debit or credit cards?

Nearly two-thirds of Americans think the U.S. will become a cashless society during their lifetimes, according to a 2016 Gallup poll. But against the backdrop of the Puerto Rico disaster, is that such a wonderful thing?

There’s an old saying that cash is king. Yet without access to cash, it would be a royal pain if our debit and credit cards were useless during an emergency.

For Puerto Rico, though, lack of access to money has become a life-or-death matter.

The next time you pull out a debit or credit card to buy something, think for a moment about the thousands upon thousands of people in Puerto Rico who are practically begging to be able to do the same.

See related: Infographic: Most Americans are OK with going cashless, At music festivals, cashless is all the rage

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