Hello Steve and Leo.
I am hearing many friends, especially those working in the financial tech industry, talking about returning to paper statements. And, they are pulling out some physical cash in case ATM’s are hit. I am curious about Leo’s and Steve’s advice on this topic.
Also, may I suggest you add “finance” and “personal finance” as tags?
Warm regards,
Allan
Living in Germany, it is still very much a cash society.
Up until a couple of years ago, hardly any store accepted credit cards, I think it was around 2015/2016 that the supermarkets suddenly started accepting credit cards, it was almost a scandal that they would do that.
Most places take debit cards, but even so I usually pay for anything under 50€ in cash.
Thereagain, credit cards in Germany aren’t the same as in the USA. Although we have Visa and Mastercard, they are linked to your current account and at the end of the month, 100% of the balance is transferred to pay off the card - if you have paid too much on the card, it comes from your bank account and you pay through your overdraught on your current account.
I think digital statements are just as good provided you have copies saved in your own storage and don’t rely completely on access via the banks portal.
A little bit of cash on you just in case is never a bad idea. How far you want to go with that is the question?
Will people start storing cash reserves under the mattresses again instead of putting it in a bank? Doesn’t seem like a great option to me.
Wow, this is some good information. I have been traveling around the world for about 17 months, and I always get less than $300 USD in local currency from an ATM at the airport. I often find that in the last few weeks in a country, I have to find ways to try to use up the local currency I have left over. I would have assumed that it would be the same for Germany.
It has been years since I was last in Germany. Back then I used cash for everything. I was supposed to go to Germany last year, but a friend in Poland waylaid me. I only spent less than $200 USD in cash while in Poland.
Three months in Warsaw was wonderful, but Germany is still on my short list for the EU. I would have loved to have gone from Poland to Germany, but my Schengen visa expired the day I left Warsaw. When I do finally decide to use up my short Schengen days on Germany, I will make sure to get enough cash to cover things. Thanks again for the info.
Let me refine the question. The move to paper and cash discussion among my friends has increased directly because they fear a successful Iranian cyber attack … A fear that has heightened since the recent hostilities in the region.
My response is still the same, personally having the digital copy of your statements would offer the same protection as paper copies from a cyber attack on the bank itself.
Now, a cyber attack on you personally and not having a reliable backup is a seperate conversion.
The cash question is centred around:
I believe that this is an over reaction. Having some emergency cash is one thing, but moving completely from electronic to cash is unjustified.
I have my own digital records and copies of things. Even if a bank goes down for some time I have access to my data. In addition to that having accounts in more than one banks increases your resilience during an IT outage.
If you are concerned so much you might as well use a fairly small and not so famous bank that won’t be the target of any attacks because of its small footprint.
Nickapos, using a “fairly small and not so famous bank” sounded like a great idea to me (maybe an online bank with non-cost access to many ATM sites). I just ran this by a couple of my paranoid friends and they said, smaller banks wouldn’t have the resources to offset a cyber attack. It would be better to keep a couple of accounts at larger banks - along with some physical cash on-hand. Regardless, maybe using a couple of big and one small, online bank would spread the risk.
I don’t understand going back to paper statements. If I had paper statements, they would so thick as almost everything I do is cash-less. Going back to paper statements would use so much paper (but I guess it would give Australia Post a bit more revenue!)
In Australia, only 37% of transactions is cash based (figures for 2016 from Reserve Bank of Australia) and are declining rapidly. ATMs are being pulled out here too, but mainly because their usage has been on a rapid decline, partly because of the tap and pay and the fact that you can get cash out at all supermarkets (grocery stores) over the counter using your debit card. It is so rare to find a store that is cash only these days in Australa. The last time I used cash was to put money towards a leaving gift for my boss. Even that could have been done electronically as a transfers between banks are generally instant and email address or phone number can be attached to your account so you don’t have to give out your account number.
Isn’t that just because the option of direct debit has been enabled? I know the option to clear your balance at the end of the month with direct debit was available when I lived in the UK, and is available here in Australia, but is an option.
Have you been to Krakow? Wonderful city and the view of Wawel castle on the Vistula River is wonderful.
Agreed. Who likes paper? But, what is your contingency plan for a successful cyberattack? That’s what my techie friends are asking. I have to think that if my fintech friends are worried, I should be worried.
That’s why I would like to hear Steve and Leo opine on this topic.
I think we would have much more serious things to worry about if the whole banking system falls over. I would say even cash is useless with no banks. I very much doubt stores would be able to function with just cash - getting stock from suppliers would be next to impossible for example. Money doesn’t have any inherent value without the banks to back them up.
Gold, though, is universally accepted and you will see, during times of uncertainty, gold prices go up as more people buy it.
Not enabled, it is a legal requirement for the card, AFAIK.
In free yet to see a card that doesn’t work that way over here. There is no option to disable it.
That sounds little better than a debit card then?
You have until the end of the month, before the balance is paid off… But that’s about it.
I only use it for making online purchases - 99% Amazon. In fact, the only reason I got it was for Internet purchases.
My British card only requires the minimum payment and I get purchase protection with it. The German card requires 100% balance payment and no additional protection.
Oh right, so you basically can never keep a balance on the card. The cards in Australia are much like the ones in the UK though some cards here so charge a monthly fee.
Hi Andrew.
Would you consider TimeMachine and Backblaze combined with keeping some docs in iCloud and Google enough protection from a “cyber attack on you personally?”
Cyberattacks, I think, look attractive to hostile states because they could cause damage to the banking system but not prompt a physical, military counter attack. How much would I "trust’ a bank to abide by bank statements? That’s a great question. I’m going to ask some of my friends. As to, “is it worth dealing with the inconvenience of all of the above?” I certainly am asking questions and spending a few minutes to research the topic. There would seem to be a high cost/benefit ration to at least do the easiest things to avoid a potentially a big problem caused by a successful state sponsored cyber attack.
No, I haven’t been to Krakow yet. Next time I go Poland I will be going first to Gdańsk, to see the sights associated with Lech Wałęsa and then for a longer stay in Krakow. My friend who lives in Warsaw often visits Krakow because her late husband is buried there, so I will still get see her. Next year when I can afford to fly more often than every three months I am going to spend my 90 days in the Schengen moving around and seeing more than one country at a time.
I think it is sort of a sliding scale from being exceptionally over prepared for something that you see as very possible, and being not at all prepared for something you see as very unlikely. I fall in the lower end of the middle. I do always travel with enough USD to bail me out of sticky situations.
@nickapos That is a good idea about using two banks. I was just about to close my bank account in my old hometown and go just with my online bank. I think I will keep a backup fund in that account rather than close it. Thanks for giving me the idea. That bank is local and pretty small. Though my other bank USAA can just barely be considered a large bank, might be a target just because it services those associated with the US military.
I have so very little money or possessions nowadays, that losing everything really wouldn’t amount to much. With so little to lose, I have no motivation to go through the hassle of going back to paper.
Anyway my lifestyle doesn’t allow for maintaining paper records, without going to great expense. I download my bank statements and like paperwork to my computer. It is saved on the cloud and on an external hard drive. When I have shifted my storage unit to a city I visit three or four times a year, from my old home town, I will start cycling a second backup drive in the storage unit every time I pass through.