Could you imagine living in a cashless society? From theft to germs, we’ve taken a look at why cash could be a thing of the past.
With only 22% of transactions paid by coins and notes last year, it’s beginning to look like cash is no longer king. And with a whopping £3,913.3 million made in contactless payments each month*, the convenience of making card payments appears to be hard to resist.
So, with more and more people turning to their plastic, we’ve taken a look at the pros and cons of using cash. First, let’s look at why cash should still have a space in our wallets…
Advantages of cash
With the rise in financial technology, there’s no shortage of budgeting apps to help you whip your finances into shape. However, sometimes in life, it’s nice to keep things traditional – and withdrawing your cash could be a good way to budget.
Having the cash in your pocket or purse can make you feel more in control of your finances, as you can physically see how much you’re spending. Plus, if you’re strict with yourself and only ever spend the money you’ve withdrawn, you can avoid overspending.
Free to use
Unlike credit cards, there are no costs attached to spending cash. Many cards come with annual fees and interest rates – but with cash, you’ll know where you stand as you only ever pay what you’ve spent.
Is there anything more frustrating than ordering something, only to be told you can’t pay by card? Or similarly, that you have to spend beyond a certain amount to reach the minimum card payment?
Well, that’s another thing you needn’t worry about with cash. You can typically expect to use cash anywhere you go, without having to spend over a certain limit.
So, now we’ve sung its praises, let’s take a look into why using a card might be a better option.
Disadvantages of cash
Recent research with the London Metropolitan University found that our money is ridden with 19 types of bacteria. The study revealed that cash is incredibly dirty and a breeding ground for germs, with listeria (a harmful bacteria that can cause serious illnesses), found on 20p, 50p, £1 coins and our notes. Eek!
Risk of theft
If you’re carrying cash around, you could end up out of pocket if the cash is stolen or misplaced. With a card, however, you can contact your bank as soon as you realise it’s missing and they’ll cancel any transactions for you.
Even better, with a credit card you’ll have that added protection under what’s called the ‘Consumer Credit Act’ – so you could get your money back if your money’s been spent fraudulently.
Paying with cash can sometimes slow things down, especially if you’re waiting for change or if you’re in a hurry.
Contactless payments have taken the UK by storm, with millions using this method every day. And it’s no wonder – with payments being made in a flick of the wrist, it can make day-to-day routines much quicker, such as taking the bus or splitting the bill at a restaurant.
Alternatives to cash
A debit card is the most popular way of spending in the UK. They’re easy to obtain, as you won’t need a great credit score to own one. Plus, you won’t be charged any interest or fees to use a debit card, as you’re not borrowing any money.
A prepaid card is a bit like a pay-as-you-go contract. You load your cash onto your prepaid card and you can spend up to that amount – making it a good option if you’re trying to stick to a budget.
A credit card allows you to borrow money up to a certain limit and either pay it back in full or in instalments. With credit cards, you could earn rewards or points as you spend and they could help you spread the cost of payments.
However, if you don’t pay off the balance in full, you’ll have to pay interest charges.
What’s a credit card for bad credit? And how do they work? Find out here.
*Statistic from theukcardassociation.com
Disclaimer: All information and links are correct at the time of publishing.