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Blog: Why cash is still in fashion

Last year 52% of all payments in the UK were made by cash. But with so many different options available, why are so many of us still keen on notes and coins?

Pound coins in palm of hand

I went for coffee a few weeks ago with my friend Amy, 54, a charity worker from Birmingham.

"I'll get these," she announced, producing her debit card and paying with it.

I was quite surprised. I'd heard about contactless payment and that lots of people pay for even quite small amounts by debit or credit card.

But this was the first time I'd actually seen anyone I know do it.

Paying for small purchases by card

But asking around among friends and acquaintances I discovered that it's actually become very popular.

And it’s not part of a careless "oh, I'll just stick in on the plastic" approach to money-management.

It seems many people find it a convenient approach for tracking their spending.

Jayne Samuel-Walker, 58, is an IT consultant from Cardiff, and prefers paying by card regardless of the amount.

'I hardly ever use cash'

"I hardly ever use cash," she says. "It's too easy to fritter away."

"For general household spending such as food, petrol or car maintenance I use my M&S credit card to earn rewards.

"For any purchases relating to my business I use my Amazon credit card which gives me Amazon vouchers as a reward.

"I clear both cards every month so I don't pay any interest. I only ever use my debit card if using a credit card would incur additional charges.

"I use Microsoft Money to analyse income and expenditure because it accepts a direct feed from online banking.

"Then I just have to allocate each expense to a category for a clear picture of my outgoings."

Cash versus card payment

Jayne's system works well for her but I'm a complete technophobe. I'm sure if I tried anything similar it would be a complete disaster.

So, as in many other areas of life, I'm completely old-school when it comes to money and much prefer paying with cash. I’m not a fan of paying by direct debit, for example.

I withdraw about £100 each time I visit a cash machine, less if I'm in a setting where my purse is more likely to get lost or stolen such as a day at the beach.

I then keep track of my expenses by asking for receipts for everything and totting it up in a notebook when I get home.

It's a bit nerdy but it's a habit I got into when I first became self-employed and my income was uncertain.

However, now I've realised how useful it is I wouldn't do things any other way.

52% of payments made by cash

And a new report by the Payments Council, UK Cash and Cash Machines 2014, shows that I'm not alone in my fondness for cash transactions.

Their research reveals that in 2013 some 20 billion cash payments were made, representing 52% of all payments in the UK.

Cash machines are the most popular way for us to get hold of cash and on average we withdrew £66 per visit.

The report also finds that that there has been little change in the past five years, with cash remaining as popular as ever among consumers.

Why cash remains popular

But with so many different payment options available, why are so many of us still keen on cash?

"It's a combination of factors," says Doriena Koldenhof of the Payments Council.

"People know and trust cash so they will always go back to it if they fall on difficult times or have problems with budgeting, though it's down to personal preference as well.

"Some people prefer paying via digital methods and rarely carry cash.

"I used to be one of them myself until I got a car this year and started to have to have cash on me for parking meters."

Self-service tills that only accept cards

Coming at it from the other angle, I recently found myself having to pay for a sandwich in Waitrose by debit card.

I was in a hurry at the time and the self-service tills wouldn't accept cash.

Maybe in these rapidly changing times, we're all going to have to learn to be adaptable when it comes to handling our finances.

What do you think?

Do you prefer paying by cash or card? What do you think of contactless card payments?

We want to hear from you! You can share your views on our message board below.


Maria McCarthy

Maria McCarthy

Maria McCarthy is a motoring and lifestyle journalist and author of The Girls' Car Handbook and The Girls' Guide to Losing your L Plates published by Simon and Schuster. She's also a regular on BBC Breakfast news, and local and national radio, commenting on motoring matters. Her pet motoring hates are potholes and high fuel prices.

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