The campaign for real money

IT might come as a surprise to our younger readers, but there was a time when we bought things with money instead of credit. Connect’s green finances expert, ROBIN CURRIE, argues for a return to the golden age of real money

I USED to live in St Albans. This is a Roman city famous for many firsts - the first English martyr, the imprisonment of the first Jack Straw following the Peasant’s Revolt, the first recorded car accident. And, on an heroic night in the 1970s, the foundation of the Campaign for Real Ale.

Some readers will remember that in those days the tipple of choice (the brewers’ choice, rather than the drinkers) was a keg beer called Watney’s Red Barrel, a synthetic concoction reminiscent of Tizer without being quite as sweet.

There were still a number of pubs that served ales and beers in the traditional style, but they were being forced out of the market by the big boys. These brewers were able to deliver enormous quantities of fizzy keg beer at a price sufficiently low to ensure a handsome profit for the landlord. And, they would point out, keg beer never goes off - it’s hermetically sealed so you can drain the barrel to the dregs, except that there aren’t even any dregs.

This was bad enough to the minds of the St Albans crew, but what was worse was that a new generation of beer drinkers was growing up who’d never tasted the real thing. They expected beer to be metallic and gaseous with a sour aftertaste and which made you burp. They had no idea of the wonderful qualities of premium cask ale, a succulent brew redolent of malt and hops, lovingly tended and served at room temperature. Ah, bliss.

And of course the same thing is happening with money.

Increasingly, we are encouraged to do our business with credit and reward cards, with online banking and direct debits. Cash very rarely gets a mention.

There are excellent reasons for this. Money is physical and physical things have certain characteristics that don’t fit in well to the virtual world. It can be lost, it can be destroyed, it can be stolen.

If you want to buy things with cash, you have to carry it around with you and scrabble around looking for the exact change while the other people in the queue mutter impatiently and look a their watches. And, crucially, you may not have enough with you.

None of these problems attach to plastic. Er… well, yes, money can be stolen through credit card fraud and identity theft, but that doesn’t really count. And yes, you do have to carry the card with you so theoretically you could lose it, and you may have to recall one or more PIN numbers, but it’s so much easier than a wallet full of fivers, don’t you find? And if you don’t have enough money, you simply carry the debt over to the next month. Easy.

And here’s the rub. The virtual world encourages us to forget the association between what we have and what we spend, between what we earn and what we buy. In the bad old days, your weekly wage was delivered in a stout brown envelope and the contents were measurable and tangible (and all-to-often insufficient, but that’s another story). It was necessary to budget because when it was gone, it was gone.

In today’s cyber-world we encourage instant gratification. Budgeting is a lost art. If you run out of money, you simply put it on credit, and if your credit card runs out you get another. And when you’ve used that one up you transfer to another provider who offers you 0% APR - at least for the first few months.

If this wasn’t coming at you from reputable financial institutions, you’d call it loan-sharking and ring Crimewatch.

Like the brewers, the banks and building societies are not doing this because it’s good for us. They’re doing it because it’s good for them. Banks are institutions that lend money. The more they lend, the more profit they make, and they have no real qualms about the methods they use or the people they target. If it involves lending significant amounts to those who can’t really afford it and won’t be able to pay it back without desperate sacrifices, that’s okay.

So, like the St Albans posse, I’m calling for a Campaign for Real Money. Down with credit cards! If you want the convenience of plastic, use a Switch or Delta card. Boycott store cards and don’t buy on hire purchase. Save up and pay cash. Open deposit accounts that will give you a passbook and pay interest monthly. (You’ll get a better return on your money as well.)

I’m writing this in my office in Exeter, and I have a deep conviction that in years to come, people will visit this spot and gaze at the blue plaque outside. “Here”, they will murmur to their children, “here was founded the campaign that took money out of the hands of the bankers and gave it back to the population.”

Now, whose round is it?




WANT TO KNOW MORE?
Robin Currie is an Independent Financial Adviser with offices in Exeter and Totnes. He specialises in all aspects of green finances. For an appointment call 01392 411630 or e-mail robin. currie@btconnect.com.