With plastic now the preferred payment method over cash for many people, and the predicted growth in mobile payments, are same day cash loans destined to become a thing of the past too?
It wasn’t so very long ago that almost everything we did was paid for in cash. The benefits of cash far outweighed the disadvantages and payment by cash remained the normal method of paying for things for centuries.
Until very recently, just a few short decades ago, your employer was obliged to pay you in cash. You could be paid by cheque if you agreed to the arrangement but the norm was, for many years, to be paid with cash sealed in a little brown envelope and handed to you though a little hatch in the pay office wall.
I don’t ever recall anyone ever complaining about this arrangement except the bosses of the company concerned. They were of course worried about security when holding large amounts of cash on the premises and certainly payroll robberies were by no means unusual.
The other danger of course was that such a small envelope could easily be dropped or otherwise lost and that could be a serious problem until the next payday arrived, usually a week later, with little or no money to live on.
Not everyone was happy to see the end of payments in cash
The alternative option of being paid by a cheque was, for those reasons, a lot more attractive to many, including the employer. The criminals who carried out the payroll robberies were, of course, not so keen for things to change. There was, however, one main problem with the transition to payment by cheque and then to payment by bank transfer. The problem was that quite a few people didn’t have bank accounts. Then, like now, but for different reasons, there was a strong distrust of banks and many people didn’t use them at all and certainly not for current account purposes.
It is strange then that, despite cash having gone out of favour with so many people for so long now, we still use the term to describe money in almost any form. Despite there being so many alternative way to pay for things there is still usually a queue at the cash machine whenever I go to use it so someone, like me, must still have a use for cash.
I know that this will change, when small transactions can be paid for by debit or credit card we will probably begin to see the end of cash as we know it. Many shops and other businesses at the moment however will not accept a card payment for small amounts, usually less than £5 or even less than £10 is not uncommon.
Alternatives to cash can be expensive for small transactions
For now though, it seems that accepting small payments is prohibitively expensive for the shopkeeper so they put a minimum limit on such transactions or sometimes charge a surcharge in order to deter such payments. It seems that, for now at least, cash still has a role in our society, albeit a very limited one.
This brings us to the subject of same day loans. When you need, as most of us do from time to time, a short term financial leg up to tide you over until payday, it was until recently possible to go to the High Street premises of some organisations and literally walk out with a cash advance. This was an old established practice of course and was most notably made available by pawnbrokers who would give you cash in your hand without the need for a credit check so long as you left something with them as a security. Not all such lenders were pawnbrokers however and some had weekly collectors who would visit your home each week in order to collect a regular payment.
An age-old practice now gets a modern face
Although it sounds somewhat archaic the pawn broking loan process was, in fact, quite common and, in an up-to-date form, still is today. The important thing was the possibility of retrieving your items of value when you had he money to do so and as such these short term cash loans were normally used to tide you over until payday and suitable for people with bad credit — they were, in fact, the precursor to the modern day payday loan.
Whereas a loan today would not, in fact, be made to you in cash, but rather as a same day transfer into your bank account; the loans provided by the pawnbroker were almost always truly cash loans and the interest rates charged reflected the fact that the lender had your valuables as a security and could, if necessary, sell them in order to get his money back.
Modern day pawnbrokers have a more acceptable face, operating as stores that convert unwanted items onto cash but, instead of offering cash loans, they offer to buy those unwanted goods from you, often at a knock down price but, at least, you do walk out with hard cash in your pocket after making such a deal.
These options are, of course, right for some people and you should use them if they fit your bill. For most of us, however, short term emergency cash requirements crop up from time to time and a cash injection is called for to tide us over until we next get paid. The likely reasons for this are well known, unexpectedly high electricity or gas bill, broken down car or household appliance like a boiler or washing machine, kid’s school trip and so on. It is in these circumstances that people might consider applying for same day loans.
Cash loans, no longer paid in cash
So, unless you are one of the very few people today that does not have a bank current account of some sort, cash loans as such are no longer necessary. Most of us are quite happy to have the money paid into our bank account. When you see various lenders offering “same day cash loans” then, they probably mean that they will, if your application is approved, transfer the money into your bank current account. It’s very quick — an hour or so — you can even order loans by SMS if time is of the essence.
Once the money from the loan has been is transferred into your bank account you can, of course, go to the ATM and draw out the cash but unless you absolutely need to do that it’s probably safer and more convenient to make your payment online or by debit card.
Although we no longer live in an age where cash is king, same day cash loans still mean that you get the funds you need when you need them.