Whether you’ve been travelling on the tube, train, bus or commute in by car, bike, on foot or on segway, you can’t have failed to notice the rather shrill tones of the Maestro campaign declaring the death of cash: “Plastic is the new Cash”, “There’s a reason machines spit out coins”, “R.I.50p” etc.

As convenient and wallet-space efficient putting all your purchases on plastic is, it turns out that more and more of us are digging into our jars of shrapnel when we go shopping; the use of cards has dropped some 2% since last year.

Possibly due to concerns aggravated by the credit crunch, more people are prepared to flash the cash rather than the card these days, for the simple reason that drawing a £20 note out of the wall means that people are more inclined to budget themselves around this amount, rather than trying to keeping a mental note of the balances, and blowing £100 that you don’t have before you know it.

Despite what Maestro would have us believe, cash is often more convenient than plastic in many situations; many corner shops and smaller locales wont accept any transactions lower than a set limit, usually around £5 to £10, which means if you’re just stopping off for a couple of drinks or just want a newspaper, then put the American Express away and dig deep.

Also, as in the case of my local, there are some venues which refuse to accept plastic outright. However, I won’t stop drinking there as it’s the only place in town where I can get a pint of Guinness for less than £3.

Minimum purchase limits are in place to ensure that small businesses break even. Consumers don’t ever see the cost of a processing credit card transactions which is carried over to the retailer, and so a minimum spend limit means that the cost will be absorbed. High street names and big chain retailers make enough each month to allow for the cost of small purchases to be recouped.

So in summary, cash has its place, and will probably continue to do so. Also, there’s the aesthetics to consider as well. The new Adam Smith £20 notes are, in my opinion, infinitely preferable to look at than a 3 x 2″ plastic oblong.

If cash is the king of cornershop purchases and cheap real ales, then credit and debit cards come into their own in the high street.

The main problem with cash is that is that it is literally worth the paper it’s printed on (inflation notwithstanding!), and so if you draw out £50 and lose it, that’s it, it’s gone, whereas if you misplace your cards or your wallet is stolen, you can simply ring up and cancel all your cards and have new ones dispatched.

Credit cards are also advantageous for big purchases such as white goods – as we’ve mentioned elsewhere on this blog, paying for goods on plastic can see you racking up rewards on a points scheme. Obviously, the more you spend, the more you earn, so splashing out on a big shiny widescreen HD Ready TV set sees you raking in the air miles or points for petrol.

It should also go without saying that plastic is essential for online shopping, which as well as being convenient can also see you saving on big purchases. Cashback shopping sites such as Give or Take and Greasy Palm allow you to save as you spend online; you can really rack up the savings on both large and small purchases over a year.

Purchasing vehicle and travel insurance online also sees you qualifying for big discounts on products, around 10% off the total cost, sometimes more. This is usually on top of any additional discounts you may accrue by purchasing multiple insurance products – car, combined home and contents, travel etc – so keep your wallet on standby for the best online deals.

This entry was posted on Wednesday, May 28th, 2008 at 9:26 am and is filed under Credit Cards. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.