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Banks, gangsters and the strange resurgence of cash

economist.com

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Re: Banks, gangsters and the strange resurgence of cash

#151

Post by Hnrobert42 »

Symbiote wrote: post #135
tristor wrote: post #68

Earlier quoted context omitted.

One thing that's also benign but not mentioned by the grandparent is that any economy which has considerable foreign travelers passing through will likely end up losing some cash. I have two pint glasses sitting on my desk, one for coins, the other for bills, they are literally packed full of money from my various travels. Last time I checked, I had almost 300 euros in there and I haven't been in the Eurozone in quit…

€300 seems a lot to have in cash anyway , regardless of tourism. That is probably more than most people would want to risk on loss/theft. It's three times what I routinely carry, which is still above average: https://www.bloomberg.com/toaster/v2/charts/892967a8146e4cc8... or https://www.statista.com/statistics/787626/average-amount-of...

It’s about what I withdraw at the airport. I don’t know the next time I’ll find an ATM that accepts my card. I only want to pay the fixed fee once. I estimate my risk of a mugging, while non-zero, to be very low.

Re: Banks, gangsters and the strange resurgence of cash

#152

Post by lotsofpulp »

Waterluvian wrote: post #12

I have like $200 cash just sitting in my room for years in case I need it for something that doesn’t take debit or credit like a carnival trip (I haven’t carried cash, ever, in years). I wonder how many others do the same? It adds up I imagine.

I keep much more cash than that in case there is a problem with electricity or the bank networks or my electronic accounts get seized.

Re: Banks, gangsters and the strange resurgence of cash

#153

Post by hadlock »

Symbiote wrote: post #135
tristor wrote: post #68

Earlier quoted context omitted.

One thing that's also benign but not mentioned by the grandparent is that any economy which has considerable foreign travelers passing through will likely end up losing some cash. I have two pint glasses sitting on my desk, one for coins, the other for bills, they are literally packed full of money from my various travels. Last time I checked, I had almost 300 euros in there and I haven't been in the Eurozone in quit…

€300 seems a lot to have in cash anyway , regardless of tourism. That is probably more than most people would want to risk on loss/theft. It's three times what I routinely carry, which is still above average: https://www.bloomberg.com/toaster/v2/charts/892967a8146e4cc8... or https://www.statista.com/statistics/787626/average-amount-of...

Paying electronically has improved a lot in the last dozen or so years, but my typical strategy had always been to keep $50-100 of local currency in my front pocket, and then another $200 usd in my money belt (along with my passport) for a typical day.

Between food and drink, lunch, busfare etc $100 generally covered most expenses beyond tickets to events, and then $200 USD was usually enough to solve any significant problems if you miss your bus ride home or whatever. If you sprain your ankle in some castle ruins, you likely don't want to spend half the afternoon hobbling around historic cobblestone roads in a village somewhere looking for an ATM to get taxi fare back to the hotel. Taxi drivers rarely turn down USD.

That said, ATM fees internationally, depending on your card issuer, can be pretty expensive, ATM fees + forex fees can amount to over 10% if you're only pulling out $100/day. If you don't mind the risk, pulling out the maximum amount of cash per day (usually $400 I've noticed) gets total fees down to about 4%. If you're a student backpacker on a budget for weeks on end these fees can be a substantial fraction of your travel savings/budget.

Re: Banks, gangsters and the strange resurgence of cash

#154

Post by imtringued »

onlyrealcuzzo wrote: post #80
StanislavPetrov wrote: post #78

I find it strange that people trust the banks with their money, given their history and their behavior.

Deposit insurance? https://en.wikipedia.org/wiki/Deposit_insurance It seems like most countries have an equivalent of FDIC.

In my opinion the deposit insurance programs are ok but the way they are financed basically begs banks to be insolvent because eventually the government chips in and that's where they end up making their guaranteed profits.

Re: Banks, gangsters and the strange resurgence of cash

#157

Post by thorin »

astura wrote: post #57
tobyjsullivan wrote: post #18

Earlier quoted context omitted.

Pseudo-relevant anecdote: I wanted to buy a used car a few months ago off someone on Facebook. We were meeting up same day so the easiest method seemed to be cash. I went to the bank to withdraw $7000 and was informed, much to my surprise, that it is impossible to withdraw more than $3000 without 48 hours notice. Suffice it to say, I've been seriously considering the tradeoffs of hoarding cash under my mattress.

I've always heard the best way to do this transaction is for buyer and seller to meet at buyers bank. Buyer obtains cashier's check with seller watching and hands it over to seller before leaving bank. This way seller knows cashier's check is real, you don't have to deal with large amounts of cash, and nobody's at risk of getting robbed. Downside is you have to go during banking hours and you have to make an extra tr…

I don't really see people doing this in the UK anymore. Cars can be bought with a debit card if you have the funds, sometimes a call to the bank is required for verification.

When I've bought 2nd hand kayaks from someone's home, I've been able to transfer the money on my phone through the banking app and they've seen the funds arrive in seconds. Is this not the case in the US?

Re: Banks, gangsters and the strange resurgence of cash

#158

Post by nly »

thorin wrote: post #157
astura wrote: post #57

Earlier quoted context omitted.

I've always heard the best way to do this transaction is for buyer and seller to meet at buyers bank. Buyer obtains cashier's check with seller watching and hands it over to seller before leaving bank. This way seller knows cashier's check is real, you don't have to deal with large amounts of cash, and nobody's at risk of getting robbed. Downside is you have to go during banking hours and you have to make an extra tr…

I don't really see people doing this in the UK anymore. Cars can be bought with a debit card if you have the funds, sometimes a call to the bank is required for verification. When I've bought 2nd hand kayaks from someone's home, I've been able to transfer the money on my phone through the banking app and they've seen the funds arrive in seconds. Is this not the case in the US?

The US banking system is still dog shit by comparison to the UK/EU.

That said, Faster Payments in the UK are not guaranteed to be instant and can take up to 2 hours. Also, some banks will arbitrarily downgrade them back to slow old BACs if it flags up as risky on their systems or if it's someone you haven't sent money to before.

In general I agree it's not a problem though, you're not going to let the buyer take the keys until the money is in your account.

Re: Banks, gangsters and the strange resurgence of cash

#159

Post by rahoulb »

thorin wrote: post #157
astura wrote: post #57

Earlier quoted context omitted.

I've always heard the best way to do this transaction is for buyer and seller to meet at buyers bank. Buyer obtains cashier's check with seller watching and hands it over to seller before leaving bank. This way seller knows cashier's check is real, you don't have to deal with large amounts of cash, and nobody's at risk of getting robbed. Downside is you have to go during banking hours and you have to make an extra tr…

I don't really see people doing this in the UK anymore. Cars can be bought with a debit card if you have the funds, sometimes a call to the bank is required for verification. When I've bought 2nd hand kayaks from someone's home, I've been able to transfer the money on my phone through the banking app and they've seen the funds arrive in seconds. Is this not the case in the US?

I did this a couple of months ago (in the UK) - bought a car and did the bank transfer on my phone, sat in the guy's front room.

However, I did need to borrow his card reader/code generator thing - put my card in, enter the PIN and the amount and then type in the code it generated into my phone to authorise the transfer. Presumably because of the large amount going to a new payee.

Re: Banks, gangsters and the strange resurgence of cash

#160

Post by denton-scratch »

Symbiote wrote: post #135
tristor wrote: post #68

Earlier quoted context omitted.

One thing that's also benign but not mentioned by the grandparent is that any economy which has considerable foreign travelers passing through will likely end up losing some cash. I have two pint glasses sitting on my desk, one for coins, the other for bills, they are literally packed full of money from my various travels. Last time I checked, I had almost 300 euros in there and I haven't been in the Eurozone in quit…

€300 seems a lot to have in cash anyway , regardless of tourism. That is probably more than most people would want to risk on loss/theft. It's three times what I routinely carry, which is still above average: https://www.bloomberg.com/toaster/v2/charts/892967a8146e4cc8... or https://www.statista.com/statistics/787626/average-amount-of...

I carry between £30 and £200. I aim to have about £100.

I have a single debit card, and a credit card I haven't used for years (I always failed to pay it off at the end of the month). The reason I carry cash is in case my debit card stops working - suspended by the bank due to suspected fraud, card stops working in card-readers, bank decides to close my account without warning or explanation.

£100 should last me a couple of days, in which time (hopefully) any problem with the card should be resolvable.

I don't carry shrapnel any more. I don't use cash in shops, unless they have a minimum card spend (then I have to carry the shrapnel change home). COVID has led to many shops having a preference for card payment, so I comply.

Perhaps I should peel off all but £30, and keep it somewhere safe at home. But I'm not afraid of being robbed in the street.

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