3 On Your Side: Smart Card
PHILADELPHIA (CBS) -- Paying with plastic -- it's been the American way for years and sometimes it can cause spending to get out of control. But 3 On Your Side Consumer Reporter Jim Donovan tells you how your credit card could become a smart card and help you manage your money.
If you shop a lot and your favorite expression is "charge it", you may be able to that get that under control with a new service from Mastercard called inControl.
"We believe cardholders should be empowered with innovative tools to help them control their spending and be more aware of how their cards are being used," said Michael Fiore with Mastercard Worldwide.
So how will it work?
"You can put into place that your card is automatically declined if it's a purchase that will put you over your budget," said Kelli Grant with Smart Money Magazine.
That's right. You can actually ask to be cut off, your purchase declined if you're spending too much.
For example, you set monthly spending limits in specific areas like clothes or for restaurants.
Once you hit your limit in a specific area, your card's no good.
"This is going to be a good thing for people who have a problem with impulse purchases," said Grant.
If getting your card denied sounds a little too harsh or embarrassing, there's another option.
You can arrange to get real time text alerts to your phone or receive an email letting you know that you are dangerously close to blowing your budget
"The idea is that you're immediately notified that you've breached a control that you've put in place," said Fiore.
Experts say this could be a good tool for people who might lose track.
"This is great if you really do need a reminder , but even someone who is just writing down their credit card purchases, like you do with your checkbook will have a pretty good idea of where your money is going," said Grant.
A survey by Mastercard found that half of shoppers thought a notification program like this would help them manage their spending better. Citibank is the first bank that will offer the inControl service later this year.
Reported By: Jim Donovan
