Cash versus card debate rolls on
Conflicting research has been released this week on whether cash or cards are being used more during the economic slowdown.
BAI Research yesterday released a survey stating that plastic was replacing cash in the US, with 41 per cent of consumers indicating they use cash less often today than they did two years ago.
Conversely, recent research from Level Four suggests that consumers worldwide, who are tightening their belts, prefer to spend with cash in order to better manage their budgets. In December 2008, Level Four found that 43 per cent of Britons feel most in control of their budgets when relying on cash from ATMs, compared with 38 per cent for debit cards and just 10 per cent for credit cards.
This trend was echoed across the pond where Zogby International found that 73 per cent of US consumers planned to buy Christmas presents with cash in 2008. Martin Macmillan, Level Four, comments: “With the economic environment showing few immediate signs of recovery, it is clear that budgeting is high on the consumer agenda. Despite the plethora of payment methods to choose from, it is clear that consumers are prioritising cash in order to maintain a firm grasp on their finances.
”With a return to traditional forms of spending the order of the day, banks should be considering ways to leverage the ATM to enhance customer service. A good example of successful action to date has been the Scottish government’s launch of a debt advice campaign during the Christmas period in 2008, which displayed advice on-screen that provided tips for consumers on how to spend their cash wisely.”