SmartMoney had an attention grabbing headline yesterday. Why Cash Is the New Plastic exerted an irresistible gravitational pull on my mouse.
Could it be that cash, that archaic and germ-spreading form of money whose demise I have both lamented and encouraged, was making a comeback after all?
The first paragraph of the article reads:
Consumers are spending again, but gone are the days of swiping and signing for everything from lattes to lawn furniture. Shoppers are reaching for paper money, and as they do, stores and even credit card issuers are increasingly ready to reward them – with more cash.
So I guess slips of paper and metal disks are making a goal-line defense. Just when you thought that they would go the way of fax machines, the old school pulls it out in the end. Suddenly, consumers are coming to realize that swiping and signing is just a little too easy.
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Am I in danger of becoming obsessed with plastic cards? It’s possible. But there is one type of card I have somehow managed to avoid discussing in 21 months of blogging.
That type is gift cards, the anonymous chits that are as good as money in one particular store. In their current form they are a relatively recent innovation. When I was your age (20+ years ago) stores sometimes sold paper gift certificates for specified amounts, but they were a one-use item. If you bought a $50 sweater with a $100 gift certificate you generally got $50 in actual cash as change.
It wasn’t until we entered the digital age that modern gift cards, each a miniature debit account, were born. Spend $50 with a $100 gift card and your “change” is the same old card, only now it is worth just $50.
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Last week I wrote about credit card technology, in particular the “chip and PIN” or “smart” cards that Europeans have been using for decades. I said that although the technology used by European (and Canadian, it turns out) cards is unquestionably more sophisticated than the dumb old plastic we simple
Americans carry, it is not particularly “smart.” The only meaningful advantage is in fighting fraud, but that problem has such a tiny economic impact that it is hard to imagine how upgrading from our current swiping system could possibly make sense.
Indeed, I still do not understand how adopting chip and PIN makes economic sense outside the USA. I can understand it making psychological sense. Everybody seems to have an irrationally exaggerated fear of credit card fraud. And there is no discounting the cool factor: the natural human attraction to new technology.
Speaking of which, two readers pointed me to a New York Times blog entry posted two days later on even higher tech cards now in the pipeline.
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Time to follow up on a few topics I have written about in the past and mention a few more tidbits not worthy of entire posts.
Bad Books
On Friday, the Consumer Product Safety Commission recalled another half million electrical DIY books to add to the million or so recalled from the same publisher in January. Some of the books were originally published in the 1950s. No explanation of why this batch was overlooked nine months ago. Also still no word on what, exactly, is wrong with them.
I had some fun with this in January, but darker thoughts are now creeping into my head. Is it just me, or is anybody else uncomfortable with the idea of a government agency recalling “dangerous” books?
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Yesterday WalletPop posted 10 Dumb Reasons to Take Out a Loan. Oh, how I like list posts. Ideas homogenized into orderly little chunks. It’s like blog dim sum. Or sushi. Or maybe Chicken McNuggets.
I am too much of a fussbudget not to point out that three of the listed items are not dumb reasons to borrow but dumb ways to borrow. Still, I think I can come up with ten easy-to-digest responses. Here goes.
1. Buying a Timeshare. I have to agree that buying a new timeshare, that is, from the developer, is probably always a bad idea. (On the other hand, buying one used, from some other sap who bought new and now will take any reasonable offer, sounds like an interesting idea to me. I’ve never done it.)
But does borrowing the money to buy a timeshare make it worse? I don’t see how. Indeed, once you set aside the foolishness of buying the thing, a loan to do it seems quite reasonable. The developer may provide financing on special terms and I think that under some circumstances the interest is tax deductible.
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Credit Cards, Media | Frank Curmudgeon | 
November 10, 2010 12:59 pm | 
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