How would you program your card?

Asiacat

How would you program your card?


There is no doubt that credit cards used properly can be a great benefit.
We apply for our first credit card with great intentions confident that we will not fall into the trap that many others have succumbed to and that we will use our cards responsibly.


The problem is that they make spending that little bit too easy, we can have it now and we don‘t need to pay for it immediately. Those little temptations that crop up day to day seemingly over ride our good intentions and the sorry result is that many little temptations can snowball into crippling debt.

What we truly need is a method to curb our consumption at the moment of temptation, rather than a way to complain about it afterwards.

However if we as consumers can recognize this weakness from the outset we can plan ahead and be smart and try to avoid such situations.

I want you to imagine that some far-sighted bank is now offering a new type of credit card – a self control card that would allow people to plan ahead and restrict their own spending behaviour.


Here’s how it works. Your card will have a smart chip that contains a “spending governor” a program that allows consumers to program their card to restrict their spending in certain categories. Your card will become the equivalent of a time release pill only dispensing credit in accordance with your good intentions set at the outset when you are not in the grip of temptation.


For instance you could limit your spending on Starbucks to £20 every month and your spending on clothes to £300 every six months. You could opt to turn your card off every Saturday, prohibit any spending prior to 5 p.m. or prevent you from buying a new book until fourteen days after your purchase of a similar item. You could prevent yourself from buying single items of a particular kind and only allow bulk purchases (e.g teabags can only be bought in 240 bag quantities). Or you could just simply say no shopping at Fenwicks or the Metro Centre.


What would happen if you surpassed the limit? Again as this is a programmable card you the card holder can set the penalties.

For instance you could choose to have the card rejected or you could tax yourself with a penalty going into long-term savings, charity or how about debits over your limit will be charged at a factor of ten. You can enjoy four frappuccinos and a latte at Starbucks at £5 a time per month but the fifth one will cost you £50. You could even trigger an automatic “shame” email or text message to a spouse, parent or friend.


The beauty of sitting down and thinking about this is that once finished you have your own personal voluntary code of conduct as regards to spending money which you can now choose to follow.


So how would you program your card? If it’s too much for you to sit down and do everything at the moment how about one or two of your personal instructions.


I’ll start:-

No new books within 14 days of a previous purchase of a new book.

A maximum of four Subway sandwiches a month. Any over that number to be charged at ten times the price.

A maximum of £30 on clothes per month. No further purchases allowed.

No purchases allowed on Saturdays.

imamoneysaver

This is a fantastic idea! You could be onto something here! However us managing our own money- the cc companies would hate it!

xx

Asiacat

imamoneysaver wrote: »

This is a fantastic idea! You could be onto something here! However us managing our own money- the cc companies would hate it!

xx

It's something I've tried with my students. I teach economics in Thailand and it's interesting to see what the come up with.

I actually took the idea from Dan Ariely's book Predictably Irrational. In it he says yhe took the idea to a certain bank in the states and after showing initial interest they shelved the idea.