Cash may no longer be king, but going cashless and paying by plastic can leave you penniless.
I always carry cash on me. But in today’s contactless, card waving society, does that make me a bit behind the times?
According to yesterday’s Access to Cash report, I’m not alone. 97% of people still carry cash on them, on average £41. More worryingly, half of us say it’d be ‘problematic’ if there was no cash, and one in six are unsure if they could cope without it.
I should say that I’m not a completely ‘cash only’ consumer. I carry and use cards, but anything under £10 is almost always a cash purchase. So, if I’m getting a takeout coffee, buying a couple of drinks at a bar or picking up my shampoo in Boots then it’s cash I’ll be handing over at the till.
I usually like to have around £50 on me and it can pay dividends. Only last week I got a call from my hairdresser who was having a panic as their card machine had broken, which meant, yes, you’ve guessed it, they could only take cash.
We’re used to card machines being temperamental, but there are wider problems with relying on plastic.
Cash beats bank glitches
If you live life paying by card, it’s easy to come a cropper if a bank glitch means your cards are declined.
And bank glitches seem to be cropping up more frequently. Last year the Visa network - which operates 95% of debit cards - temporarily almost ground to a halt with cashless customers taking to Twitter to complain when their debit cards were rejected in everywhere from shops and restaurants to bars and stations.
A couple of months later and NatWest hit the headlines when customers had problems paying by card. And who could forget the TSB fiasco which meant customers couldn’t make online or app payments.
In some cases, these glitches may be short-lived, but they can still be long enough to cause serious problems and leave you stranded if you’re totally reliant on your card, with only the one bank account. With zero cash and a temporarily duff card, you may be hard pushed to pay for a train ticket or even fill up with petrol for the journey home.
And even if you’ve got spare cards to your name, you can bet the queues will quickly build up at any available ATM machines in the aftermath of any card chaos.
This isn't just my paranoia: the abovementioned Access to Cash Review warned of a "risk of catastrophic failure" of digital payments, noting that "even now, there’s not enough cash in the right places to keep a cash economy working for long if we were to lose digital or power connections."
Pack holiday cash
It’s not just in this country that I carry cash. When I’m going abroad I always pack two credit cards, (just in case one’s declined for any reason), along with cash. And I take a mix of both local currency and some Sterling, for emergencies, in case I need to change some in a hurry.
Ok so I won’t carry crazy sums, especially on a day at the beach, in case it’s lost or stolen, but I like to have around £100 in local currency in case I’m somewhere that won’t take plastic or my card gets rejected.
Banks and card companies all have their own sophisticated systems in place to try and spot any ‘unusual spending patterns’ on your card, which could be a warning sign that your card’s been pinched. If they spot an unusually big purchase or spending in a far-flung part of the globe, they may block your card as a means of protection.
I’ve only ever had my credit card refused once and it was in Disney Florida. Luckily, I had another credit card on me, which was accepted instantly, but without any cash at your fingertips, if you’re a few thousand miles from home, then calling your bank can be costly plus a whole heap of hassle if you can’t pay your way, even temporarily.
Carrying cash can be cheaper too. Most debit and credit cards have horribly expensive charges if you use them abroad, with a notable few exceptions.
That means extra fees for cash withdrawals, fees for purchases, along with rip off rates if you opt to have the bill switched back to Sterling (so don’t).
And if like me, you love a good haggle, then you’ll definitely want cash in your pocket.
There’s no point trying to knock down the price, only to produce a wallet full of cards, as that could mean the deal’s off especially in a back street souq.
My favourite holiday trick that’s had a 100% success rate everywhere from Morocco to Dubai and Turkey, (and that my family think is hilarious), is to screw up a small denomination note and pop it in my pocket before going in for a haggle.
This way if the price drops, but still isn’t good enough, my trump card is to rummage in my pocket with a ‘let’s see what I’ve got’ banter, and pull out the screwed up note, which always seems to seal the deal and get me the price I want.
Good luck trying to pull that trick with a shiny credit card!
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