Cash may no longer be king but it still has its uses
If you’ve been out shopping recently, visited a Christmas market, or even bought a coffee from a street vendor, chances are you’ll have paid by card. In fact, many places only take cards these days.
Lots of the people I speak to are worried about this – but should we be? Here are three benefits you get from paying by cash and three for card payments, to help you make up your mind.
Managing finances
The best argument for cash is it helps us keep on top of our budgets. Withdrawing cash and using it to pay for goods and services means you know exactly what you’re spending. When paying by card it’s harder to do this unless you go through statements every day. Frustratingly, many card transactions don’t involve being automatically given a receipt.
Avoiding fraud
It’s the Christmas party season, and many of us will be heading out for a night where drinks may be had and questionable choices made.
When we’re having fun, it’s easy to become a bit blasé about tapping your card to pay for things. However, it’s vital to check the merchant terminal handed to you in the bar or restaurant. Mistakes get made – and dishonest people have been known to ‘round up’ transactions. Make a point of asking to see the sum you are being billed – especially if you’re tapping something without a display.
Maths and money management
Paying by cash is a great way to teach kids about money and maths. Most of us abandoned algebra after school, but the basic principles of mathematics are vital life skills.
Working out how much cash you have to spend, what you’re saving in the piggy bank and whether you’ve been given the correct change is essential for children to learn.
More consumer rights with a card
Though cash has many benefits, the fact is you have more rights with payments made on debit or credit cards. I often mention these rights in this column but it’s always worth repeating at this time of year when our spending increases.
If you pay on a debit or credit card and the goods or services you pay for don’t turn up or the company looks like it might go under, you can ask the card provider to ‘charge back’ your cash. And if you pay by credit card and spend over £100 then you can make a claim under the Consumer Credit Act against the card provider if what you’ve paid for has been misrepresented. If you pay by cash, check or bank transfer, you have far fewer protections beyond going to court if things go wrong.
Audit trails and online banking
Paying by card also means there’s a clear audit trail for all your spending. Knowing where you cash has gone can help you identify where you can make savings. Using online banking apps is a great idea too. Often these apps allow you to monitor your spending and categorise it, which again, can help you spot trends in your outgoings and manage your finances much more effectively.
Convenience
Let’s face it, paying by card is easy and convenient. Not having to stand in a bank queue or find an ATM with cash in it saves us all a great deal of time. It speeds up transactions at the tills in shops too – and you can say goodbye to those bulky purses and wallets.
Ultimately, I’d argue that while there are advantages to both using cash and cards, we should keep both methods of payment. Don’t forget that you can request cards without contactless payment options if you are worried about fraud – and you can always make a complaint to a business if you are unhappy about its decision to go cashless.
Get help with all things shopping and finance-related at resolver.co.uk