New payment method could make it easier to rack up credit card debt
It’s about to get even easier to spend money. News broke today that Apple is in talks with Canada’s six biggest banks to bring Apple Pay to the Great White North. The tech giant’s mobile payment technology would allow Canadians to use the latest iPhones at checkout counters to digitally pay with the credit and debit cards.
Canada’s banks are forming a consortium to negotiate with Apple ahead of the potential November launch. The banks are concerned about the transaction fees that Apple will collect, as well as security issues that have affected users in the US, where Apple Pay accounted for two-thirds of all contactless payments on the three major credit card networks.
Bankers aren’t the only ones concerned about the coming wave of Apple Pay. Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, is worried that advancements in mobile pay technology will make it easier for Canadians to separate themselves from their money.
“Forking over cash is a very real experience for shoppers – they see it dwindling in their wallet or purse,” says Schwartz. “Shoppers are losing the opportunity to stop and think about what their spending is doing to their bank accounts.”
Schwartz also echoes the security concerns put forth by the banks. Despite advanced security technology, Apple’s efforts to streamline and simplify credit card registration means that some fraudsters are able to exploit vulnerabilities through identity theft.
“It creates another arena in which criminals can ply their trade,” warns Schwartz. “As far as they’re concerned, new technology just means new opportunities for theft.”
Though a potential launch is several months away, Consolidated Credit offers the following tips to protect both your security and your finances, whether you’re using the forth-coming Apple Pay technology or any other form of digital payment:
Keep a close eye on your bank account. Keeping watch over your online statements will protect you in two ways. First, it will allow you to know exactly how much you are spending, making it harder to get carried away and spend recklessly. It will also provide you with an opportunity to monitor for any suspicious transactions that may have resulted from fraud.
Keep a tally. It’s easy to realize that you’re spending cash when it’s disappearing from your wallet. But if you’re racking up a credit card bill, you might lose track of your spending. Use our free online budgeting app and be fully aware of how much money you are parting with. Using your debit card for mobile payments will also help keep you honest.
Check your credit report. It’s a good idea to do a quarterly check on your credit report. Fraudulent activity could be needlessly ruining your credit score, so it is important that you report any issues immediately to your credit bureau. The credit bureaus will send you a free report in the mail – click here for Equifax and here for TransUnion. You can also pay for premium, express credit reports.
Observe a budget. Budgeting is one of the simplest but most effective ways to maximize your income. Set aside strict limits for discretionary spending like entertainment and eating out and stick to those limits, no matter how tempting it might be to tap your credit card or wave your Apple Watch.
“We’re living in a time when technology has made life incredibly convenient and that’s not a bad thing,” adds Schwartz. “But it does require that we be extra diligent to make sure we don’t make ourselves financially vulnerable.”
If over-spending has put you deeper in debt, it’s time to regain control of your finances. Call a trained credit counsellor today at 1-888-294-3130 and let them help you figure out a solution that will work. You can also try our free online debt analysis to find out where you stand.