It has been months since I last shared confusion over the way everybody else uses credit cards. Today I am back at it.
Over the weekend the New York Times had a report about a new feature being rolled out by MasterCard and Citigroup. (By which the Times means Citibank.)
The service, called inControl and already in use by some Barclaycard holders in Britain, is a sort of financial chastity belt that offers the potential to prevent a variety of budget sins and other money traps.
Worried about your restaurant habit? If your bank adopts MasterCard’s service, you could tell it to have your debit or credit card reject any restaurant purchase above whatever monthly cap you set.
I must admit I do like the name of the product. “inControl” neatly implies that without it you would be “outofControl” and I think that if this service appeals to you that is likely true.
So how is this supposed to work exactly? Towards the end of the month you get carried away at Chateau de la Maison and order dessert, which moves you past your pre-set $300 a month restaurant limit. So the card is rejected. Then you wash dishes?
Or do you slip into the men’s room to call Citibank and ask them to make an exception just this once? Can they let it go if you ask nicely? Or is this one of those “for your own good” things where they stick by what you told them to begin with, because you are obviously having a moment of weakness? But what if it really is a serious dining emergency? Maybe when you fill out the application for the card you supply a “safe word” to be used when the discipline goes too far.
Still, this is the sort of service that makes you slap your forehead and wonder why it didn’t exist before. It has the potential to solve the core problem with budgeting: it’s easy to make a spreadsheet and track what you spend, but it’s awfully hard to stick to the plan.
Changing behavior, in the end, is the biggest challenge. And now MasterCard seems to have made it possible for your bank to become a partner in your self-improvement instead of an enabler of your misdeeds.
I am not slapping my forehead in wonder that it has taken this long for banks to become a partner in my self-improvement. I am rubbing my forehead in confusion over how this is a service rather than an annoyance.
Is it just me? I know I am the only person in America who has only one credit card bill and pays it in full every month. For the rest of you, the dozens of cards in your wallet are the equivalent of a chemical dependency somewhere between nicotine and heroin. So maybe anything that can limit how often you fix is a good thing.
But I am honestly wondering to how many people this scheme will have appeal. To make use of this, you would have to be the sort of person with low enough willpower to need to resort to restricting your spending via a limit, after which your card turns into something only useful for jimmying cheap locks. And you would have to be the sort of person for whom a single overall limit does not work. The sort of person who is irresistibly compelled to spend $20 of the entertainment budget on clothes and is then filled with self-loathing afterward.
Is that a big market? MasterCard and Citibank seem to think so. (As an aside, if you missed it, read the Wall Street Journal’s presumably tongue-in-cheek investigation of the mysterious S. Larson who has been signing Citibank’s customer service letters for decades.)
The inControl card feature also allows you to set up fraud alerts and use prohibitions so that you can help fight fraud, that is, help the bank do its job. (Another area of my confusion which I have previously shared.) An example given by the Times: “Tell your card issuer to never allow charges originating from the fraud-prone countries that end in “stan” or “ia.”.” That ought to show those Austrians.
The article does discuss one use of this that does make sense to me. A parent or employer could restrict the things that could be charged on their account by their child or employee. So you could pack Junior off to college with a card that was good at bookstores, supermarkets, gas stations, and church fairs, but could not be used at pizzerias, liquor stores, strip clubs, or tattoo parlors.
And, in fact, that sort of control over what gets charged makes a great deal of sense. The versatility of a MasterCard is a great thing in your own wallet, but it is a liability if you are giving it to somebody else to be used only on certain things.
But when you start pretending you are two people, both the parent who imposes restrictions and the child who needs them, you lose me. But trying to resolve my confusion on this has led me to a new, even better, feature that MasterCard could offer.
parentalControl will allow grown children to have their parents notified whenever they exceed their pre-set spending limits on certain categories. So, although the charge at the fancy restaurant will go through, Mom will get an email with the charge details saying that you have exceeded your dining out limit for the month. The next day she will call you at work and ask who you were out with and is it serious.
[Photo – Andres Rueda]