Are consumers and hard cash better together?

19th September 2014

Well, it’s official. Scotland is staying within the UK. I live in Yorkshire, so didn’t have a vote, but I did ponder what a “Yes” result on independence might have meant for Keep Me Posted, as a UK-wide campaign.

We have of course talked to institutions based north of the border, including the Scottish Building Society, which is said to be the world’s oldest, Royal Bank of Scotland and Standard Life. Dyslexia Scotland, RSABI and Capability Scotland are supporters. Who knows if an independent Scotland would have been more or less in favour of citizens having the choice to keep paper bills and statements?

All the talk about which currency would have been used in the event of a “Yes” vote got me thinking about cash and how easy it is not to keep track of spending when you don’t have a paper record. I noticed when I was in London recently that you can now swipe your contactless method instead of an Oyster card on the tube. If you do that, and use the contactless card to buy a coffee or a sandwich, all without any receipts, you could be racking up around £10 a day without even noticing. And without a paper statement that arrives to remind you of that spending, you may suddenly find you’re far more out of pocket than you meant to be.

I know I keep comparing our lot with those in other countries, but compare that with people in Germany, where according to a report on digital news outlet Quartz, around 80% of transactions are in cash. The author says that in a survey German respondents remarked this makes it easier to keep track of their spending, which, coupled with an innate loathing of debt, makes them think twice before going mad with their money.

On the opposite spectrum, The Money Advice Service also published some stories this week of young people who wished they had done things differently – such as the girl who took out a credit card, and reached its £1,500 limit in just a few hours, and the (to me, scary!) tale of teenagers who play credit card roulette. If you’ve not heard of it, a group goes to dinner, everyone puts credit cards in a hat and the unlucky one pulled out pays for everything. Imagine the cost if your card is “chosen” a couple of times a month…

In my book, anything that helps people realise what they are spending, such as a paper statement, rather than an easy-to-ignore email, is a necessity, not a luxury which consumers can be made to pay more for.

Judith Donovan