Sunday, April 7, 2019
My tryst with cashless economy
My introduction to Cashless economy came about 20 odd years ago as a graduate student. I’m FoB in the States and join the venerable Dharavi’s, a/k/a graduate students staying in group and tandem near the school. This is the time of Max gyan coming in, particularly for a person of my background with a large expat family. Among the many conversations that I had was with one of my cousins, the first born among us and the real motherly elder one. By the virtue of being the oldest, dishing out motherly edicts came to her pretty early. With such extensive experience, no wonder she has done a darn good job with her kids.
So the conversation went something like this and I remember it to this day.
JR: Did you get the mail from the bank with the ATM card?
ME: Yes, it came and it has the Visa logo that you wanted me to ask.
JR: Good, today go to bank and deposit all the cash you have and keep only two $5 bills.
ME: OK, but what will I do for buying anything?
JR: Use the Card.
ME: What? You are joking with me right? How can I buy anything, say a grocery?
JR: Use the card.
ME: What if it is only $15?
JR: Listen V, they will accept card for any amount above $5 keep spending that way. This spending is necessary for you to build credit history, which will help you get credit card. Besides, you will have an account of what you are spending and it will put a good credit rating in a few years when you are ready to buy a house.
ME: Then why that $5 bill?
JR: That is your mugging money. You might get mugged when coming from school in night or elsewhere. Give away the money then. If you don’t have the money that will be bad at that point.
ME: Ah, thats a good caution.
JR: That isn’t all. Remember not to spend a penny more than you need cause credit isn’t salary, it only is allowing you to spend in advance what is not yours. But you will always have to repay with what is yours!
Honestly, I didn’t understand her logic then going from India where everything was transacted as cash. Well, even the money I got from my sister and BIL from the west coast for comfort was in cash too! But then growing up like I did, you always did one thing, follow the diktat even if you disagree till such time that you have the experience and gyan to have independent views.
Needless to say, in a couple of months I got my first credit card from AMEX. Many more came and I had credit limits many times my annual stipend! When I checked before leaving the shores, I found that my credit rating was 800 (on 800).
I continued the same strategy in India when I got back, this allowed me to get loans a couple of times. Considering how good I am with money, which some of my students and family are privy to, cards are the real saviours. More than anything, I use it to keep track of what I spend, indulge and splurge.
Thanks JR for that valuable advice two decades ago. That sure was a big preparation going into the cashless economy that we are drifting to!
