Death of the cheque 'bad for responsible spending'

24/02/2009

The extinction of the cheque as a payment method is making people less responsible about their spending, a financial website has claimed.

According to Fool.co.uk, the quickness and convenience which electronic card payments make possible make it easier for consumers to not think their purchases through.

David Kuo, head of personal finance, added that paying for goods and services by cheques and cash were the "best ways" for people to spend money - if they wanted to stick to a budget.

He added: "One of the big dangers of the death of the cheque is that people suddenly become very comfortable using electronic money, rather than seeing something tangible, like a cheque or cash.

"I think the cheque and cash are two of the best ways for people to control their finances, because it isn't just a wave of the hand or the press of a button that will allow you to spend money."

EuroDebt director Kevin Still said: "The days of the cheque stub probably need to be re-vitalised to encourage spenders to record what they have actually purchased and to make allowances for when the payment will clear their bank account. Cash obviously has the benefit that if you haven't got it then you can't spend it. We would encourage anyone to record their daily expenditure, both planned and unplanned, irrespective of the payment method.

"It is often the annual expenditure items like the car tax or MOT that can cause cashflow problems. This is one of the reasons EuroDebt offer pre-paid and payment cards to clients in financial difficulty. It is budgeting and prioritising expenditure that are crucial in tough times."

According to payments association Apacs, UK consumer card spending totalled £32.3 billion in December 2008, 0.3 per cent up from December 2007.

The organisation also released a report on cheques recently, showing that just 4.4 million were issued each day in 2007, compared to 11 million per day in 1990.

Tags; Debt Management and Banking, Credit Card Lifestyle,

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