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Owe Carter

Would you be better off not using cash?


Would you personally benefit from going fully digital with your payments? Here are five ways in which you might.

Using a smartphone to make a payment

For his book “The End of Money”, Wired journalist David Wolman attempted to eschew cash for an entire year. Save for a couple of hiccups, he succeeded with comparative ease.

Afterwards he said: “Now that I’m back to using [notes and coins] in my day-to-day life, they feel filthier and more antiquated than ever.”

But could you do it? In fact, would you be better off not using cash? Here are five ways in which you might be.

1. Increased security

People are very cautious about how secure emerging payment methods are. But it’s easy to forget that cash itself is one of the least secure means of payment.

If digital payments fail, or you accidentally pay twice, there tends to be a record and recourse. If you lose a wad of notes, they’re gone.

Wolman uses the example of the Maldivians to illustrate the fragility of cash. “The 2004 Indian Ocean tsunami literally washed many residents’ life savings out to sea.”

Although it’s a fairly extreme example, it serves as a reminder that just because something is physical rather than virtual, doesn’t mean it’s any more secure.

2. Avoiding bacteria

“Cash is filthy… No amount of grandiose talk will change its microbe-infested reality,” wrote Wolman.

A selection of filthy coins

Indeed, bacteria, fungi and pathogens that are found on notes and coins can potentially cause a number of unpleasant conditions. Skin infection or food poisoning, anyone?

The type of microbes present vary depending on the note or coins’ composition, usage, and the climate in which they’re used. Practising good hygiene obviously reduces any risk. But the thought is enough to make any hypochondriac crave sweet, sanitary digital payment.

3. Improving your credit score

The way in which you manage your money can be an indicator to companies as to whether or not you’re a safe bet.

One of the worst things you can do here is to withdraw from an ATM using your credit card. That’s a red flag to potential lenders. Once or twice may not hurt, but it’s certainly best not to make a habit of it.

In addition, to build a good credit report, you want to show the lender that you can use credit responsibly. Using cash is preferable to using a credit card and defaulting on payment. But if all of your transactions are made with cash, it’s effectively a blind spot for potential lenders.

4. Accruing rewards

Provided you’re paying off your balance each month, paying by card can be a good way of building up rewards. You can choose from cashback, supermarket points, air miles – whatever suits your spending habits best.

An aeroplane, denoting air miles

Rewards aren’t exclusive to credit cards either. At the time of writing, TSB is offering cashback incentives for customers paying by contactless debit.

Any benefits are of course counteracted if you just get further into debt with your credit card, and end up making large interest payments.

5. Keeping better records

A common complaint of paying by means other than cash is that the transaction feels somehow less tangible. It then follows that you lose sight of exactly how much you’re paying.

However, this is quite a short-term view. In the longer term, it’s easier to keep track of your outgoings when paying digitally, because you have itemised accounts of your spending.

Unless you’re incredibly fastidious about keeping receipts and documenting your cash payments, it’s easier to keep a budget with digital payments. Although be warned – it may serve as a stark reminder of how much you spent at the pub on payday.

How far is the UK from giving up on notes and coins? Read our in-depth report Cashless Nation.


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