Easy payment options could mean problems for those who can't control spending

OTTAWA – Technology is making buying things easier, but credit counsellors want you to remember that paying for them is still as difficult as ever.

Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, says the ease with which consumers can buy things these days could spell trouble for those who have difficulty controlling their spending.

“It is allowing many consumers to avoid the harsh reality of what is going on inside their bank account or even inside their wallet,” he said.

With the expansion of Apple Pay this week, Canadians added yet another way to quickly pay for their purchases without even opening their wallets.

The addition of the big Canadian banks to the service adds to the already numerous ways shoppers have, including Interac Flash, MasterCard Tap & Go, Visa payWave, and American Contactless Payments, to pay for things quickly.

Schwartz said the physical aspect of pulling out your wallet and taking the cash out to make a purchase is very different from using a phone.

“You really have to say that I am willing, ready and able and want to make this purchase,” he said.

“There is a real mental link between you actually going in and making that purchase versus just whipping open your phone, throwing it on the scanner and you’re done.”

The plethora of new ways for people to more easily spend their hard-earned dollars comes amid concerns about household debt levels.

Statistics Canada has reported that for the fourth quarter of last year the ratio of household debt to disposable income climbed to a new peak of $1.65 in debt for every dollar earned after taxes and other fees paid to government.

Credit counsellor Pamela George says the new ways to pay for purchases are convenient.

“The problems happen where people are just putting it on a credit card and they don’t have a clue where or how they’re paying it,” said George, who works at the Credit Counselling Society in Ottawa.

She recommends clients withdraw the cash they’ve allocated in their budget and when it is spent, they’re done.

“The problem starts when you don’t track your spending and then you just keep swiping the card,” she said.

But technology can also be used to help.

While a smartphone can help make it easier to spend money, it can also help track spending if you use a budgeting app.

Schwartz’s says his agency offers a free app for Apple devices that allows users to keep a record of spending and download it to a spreadsheet.

“That is the upside to the technology. But the basis behind it is budgeting and understanding what money you have coming in, understanding what money you have going out and understanding what money you have potentially available,” he said.

George recommends her clients simply stick to cash if they really want to control their spending.

“It is harder to break a $20 bill for a $3 cup of coffee than it is to just tap a card,” she said.