Protecting your personal privacy is a lifestyle design choice and can protect you from identity theft. Developing effective privacy hygiene habits and practices that are conducive to secrets will give you more control over which aspects of your life are made known to whom and when. One key way to do this is to use cash for as many transactions as possible.
[pullquote]I suppose the sweet little grandmother Sally Harpold 'had something to hide'.[/pullquote]PRIVACY BENEFITS OF USING CASH
One of the biggest returns on privacy for the effort invested is probably by using cash for as many transactions as possible; whether as payment or receipt of funds. Another is Bitcoin which is like digital cash; or cash you can use on the Internet. The paper trail which follows such transactions vanishes into anonymity when you use cash. It is almost impossible to link you to a transaction whether you are looking at your own financial records or the records of a merchant.
All reporting requirements for tax and other purposes should still be followed but even this only reveals some information about the aggregate amount of cash that has changed hands. Nevertheless, the benefits to the average person can be enormous.
In the unfortunate event that your bank records or statements are compromised then the cash transactions will appear only as withdrawals or deposits and there will be no way of telling where that money came from or went. The more cash transactions then the fewer bits of information that are available from reviewing your financial statements.
PRIVACY BREACHES BY CREDIT AND DEBIT CARDS
Using cash instead of credit or debit cards also keeps the damage from compromised statements to a minimum. Just look at the mess Stratfor caused their clients by not accepting Bitcoin. Then you are less likely to suffer from identity theft.
However, with credit or debit cards you need to be careful when using them to make purchases and carefully select which purchases to make which cards and when because financial privacy is not built in to the design by default like with Bitcoin or cash. This means means that your transaction information will be in the hands of credit or debit card companies, marketers and other “affiliates” of the credit card company or banks.
[pullquote]Talk about the potential for a wild goose chase![/pullquote]SNEAKY NINJA TIP FOR USING CREDIT CARDS
If you are really sneaky then you could carefully craft which expenses you pay with credit cards and which ones you pay with cash so that marketers and anyone else who has access to a record of your credit and debit card purchases will only have the profile that you carefully painted. Or perhaps you have let someone use your credit card to make gas purchases in a location far away from where you actually are. Talk about the potential for a wild goose chase!
AN UNFORTUNATE EXAMPLE
A rather dramatic example of why someone should use cash to make a purchase is found in the experience of Sally Harpold. Although she was prosecuted under Indiana state drug laws for purchasing one box of Zyrtec for her husband and, a few days later, one box of Mucinex for her daughter.
Both medications are available over the counter and without a prescription but the Indiana law prohibits the purchase of more than a certain amount of medicine containing ephedrine or pseudoephedrine within a seven day period.
Without her knowledge Sally purchased two medications which, combined, exceeded the statutory limit. Although she had (1) never had legal trouble before, (2) had no intent to commit a crime and (3) was not committing a victimless act that is wrong or immoral in and of itself nevertheless she was prosecuted. In order to have her record expunged, but not from the Internet, she was forced to pay for the cost of the criminal prosecution.
This extremely bad decision by county prosecutor Nina Alexander to enforce a poorly worded law in a manner which was never intended could have been avoided if Mrs. Harpold made one or both of those purchases with cash.
In this example, a cash transaction would have left the purchase of the over the counter medication in complete anonymity and it would have been impossible to connect to Mrs. Harpold. I suppose the sweet little grandmother Sally Harpold 'had something to hide'. Or is she really a drug abuser in Indiana?
CAVEATS TO USING CASH
There are some caveats to using cash as often as possible. Cash is almost impossible to recover if stolen so having enough cash on hand to pay your expenses can raise security concerns. You should never use cash solely to with intent to commit fraud, evade taxes or engage in behavior which could be construed as money laundering. So avoid using cash with either a washer or dryer.
Also, banks and other institutions may be required to file Currency Transaction Reports for any transaction or series of transactions that are greater than $10,000. They also may be required to file Suspicious Activity Reports if they think that your cash transaction is somehow suspicious.
One of the most effective ways to protect privacy is to use cash or Bitcoin for as many transactions as possible. By taking control of the facts which are recorded, stored, archived, databased and searchable forever you greatly reduce the probability for identity theft.
This will go a long way to protecting both your personal privacy and financial privacy and may even keep you out of jail. So consider getting a copy of The Free Bitcoin Guide and using cash and bitcoin as often as possible to secure the financial privacy you want..