Do you automatically click “yes” when prompted “Would you like to save this payment method?” This article gives insight as to why it is never a good idea to give permission for software or a website to store your information. Alongside risks to your general safety, there are other factors such as impulse purchasing. Read the article below for more information.
“Would you like to store this card information online for future use?”
Are you the type who clicks “Yes” or “No”? There is usually very little gray here – you either immediately click “Yes” because the convenience outweighs any issues, or it’s always a firm “No” out of fear of becoming a victim of the next hacking scandal.
With the constant growth of online sales and shopping, most of us have seen this message. And the option to save payment information is a no-brainer for online merchants. Saving your information makes it easier for you to shop and spend money. But what about for the consumer? If you are a “Yes” clicker, you know that every time that message appears, there’s a tiny voice inside your head that says ‘Is this a good idea?’.
Listen to that voice! Saving payment information is not only dangerous but can cause spending problems as well. Below are three reasons to never save your payment information online.
1 – Safety: Despite safety concerns, more than 6 in 10 U.S. credit or debit cardholders (64%) say they have saved their card number online or in mobile apps, according to a new study from Bankrate.com. While more than half (56%) save their information on a retailer or service’s website and 32% save their information in a mobile payments app, only 8% of U.S. adults think it’s very safe to store their financial information online.
While just 8% believe saving payment info online is very safe, over 4 in 10 (44%) do think it’s somewhat safe. The remainder are more skeptical; 31% believe it’s not very safe, and 17% think it’s not safe at all.
There is always some risk with saving payment information on a website or app, however, the type of card is important. 42% of respondents have saved a debit card number compared to 43% who saved their credit card information. Ted Rossman, industry analyst at Bankrate.com notes, “You may think you’re being more responsible with a debit card because you’re avoiding debt, but that’s a security risk because if hacked, the crook has direct access to your checking account.”
The bottom line, according to the FTC, is you must assume that anything you put on the internet should be considered completely unsafe and available to the public. It doesn’t matter how much a website boasts about its security.
2 – Impulse Purchases: Back to the merchants’ motivation for wanting that payment information saved – it makes it so much easier to spend money. It may sound minor, but the little bit of extra work necessary to 1) find your card and 2) enter your card information each time, creates an obstacle to impulse buys and overspending. It’s already tempting enough to buy online because using your card online means you don’t see the money going from your hand to the merchants. Add to that the ease of not even having to type in the numbers, and it creates a dangerous combo for overspending.
The study shows that nearly 4 in 10 U.S. adults (39%) made an impulse purchase within a month before the September 18-20 survey. This included 20% who did so within the past week. Millennials (48%) were the most likely generation to have done so within the past month. This included 25% who did so in the past week.
Overall, 56% of U.S. adults made an impulse purchase in the past three months, 70% within the past year, and 83% at some point in their lives. Millennials, again, had the highest likelihood across all generations of having made impulse purchases in these periods (67%, 79%, and 87%, respectively).
3 – Extended “Free” Trials: Oftentimes companies will request payment information in exchange for a free trial of their service. We’ve all done this with the best of intentions, thinking we’ll remember to cancel that trial in 30 days. We rarely remember until we see a bizarre charge for $99 on our statement. What many people don’t realize is this stored information can then be used to extend the term of service – many times unbeknownst to the user. The study shows that 59% of respondents who signed up for a free trial were later charged against their will.
Entering your payment information each time is a pain. But, it’s way easier than dealing with a hacked bank account. Or big purchases you’ll soon regret. Or even canceling that not-so-free trial. Better to deal with the inconvenience upfront.