1. “
All signs point to a cash-
less or near-cashless future,
as tap-and-go, contactless,
wearables and mobile
payments become more
mainstream. This shift is
expected and perhaps
necessary as Canadians (and
the rest of the world) move
toward lifestyles centered
on modern convenience.
But as money becomes
more invisible, will racking
up debt become too easy?
Canada has leaped ahead
of most of the world in
adopting contactless credit
and debit card purchases,
according to Michael Tomp-
kins, senior research analyst
with the Canadian Pay-
ments Association.
While contactless credit
card payments have been
around for several years,
"the Interac side of the
equation just came into full
force in 2014," Tompkins
says. "In the first year, it was
enormously successful."
"[Contactless credit and
debit cards are] end-game
stuff," Tomkins says.
"They were always meant to
be a precursor to the
mobile device. It's a step-
ping stone to that new
environment."
Already, there are several
mobile payment apps --
such as Suretap, UGO and
ApplePay -- and wearable
payment technologies --
such as the Nymi Band,
which verifies your identity
with your unique heartbeat
information -- that make a
cashless future seem ever
nearer.
However, studies such as
the International Journal of
Economic Sciences' 2014
paper, "The Impact of
Contactless Payment on
Spending," show that these
contactless payment meth-
ods do, in fact, lead to
increases in consumer
spending.
With household debt
reaching record highs in
late 2015, and the Bank of
Canada warning against
rising debt, it's vital to
know how to use new
payment technologies and
heed smart budgeting
practices.
"There's a little bit of addi-
tional spending [with cash-
less payments]; a big part of
it is not managing the debt,"
says Victor Godinho, presi-
dent and senior financial
planner with PANGEA Person-
al Financial Planning. "It's all
about active management."
Unmanaged cashless payments can quickly
lead to debt
By: Laura LaRocca | 04 March 2016 | CreditCards.ca
Victor Godinho, President & Sr. Financial Planner
PANGEA Personal Financial Planning
TM
Featuring:
This article appeared in CreditCards.ca on-line and can be located at the following URL: http://www.creditcards.ca/credit-card-news/going-cashless-causes-debt-1267.php
PANGEA Personal Financial Planning™
PANGEA Personal Financial Planning
TM
www.pangeafinancialplanning.com

2. Source: http://www.blogcdn.com/slideshows/images/slides/281/502/6/S2815026/slug/l/at0crt-close-up-on-woman-taking-credit-card-out-of-her-purse-2.jpg
Cashless doesn’t mean
budgetless
"There's a little bit of addi-
tional spending [with cash-
less payments]; a big part of it
is not managing the debt,"
says Victor Godinho, presi-
dent and senior financial
planner with PANGEA Person-
al Financial Planning. "It's all
about active management."
Tomkins says this will
become even more import-
ant as the spending limits
increase for tap-and-go
contactless transactions (that
is, transactions that do not
require a PIN or signature).
For example, consumers can
make tap-and-go contactless
payments with MasterCard's
Tap & Go for purchases up to
$100.
This is already double the 2013
limit. Tomkins predicts that
these limitations will disappear
or at least rise, making it easier
to spend larger amounts of
money with minimal effort.
Godinho went cashless several
years ago. For him, there has
been nothing but an upside,
because he always pays his
credit cards off on time, while
maximizing his reward points.
To do that, he uses Mint, a free
app from Intuit, to track his
expenses. "It tracks all my
spending on all my cards and
sends notifications weekly if I'm
spending more, based on bud-
gets that I've created," Godinho
says. He also saves up before
making a major purchase so
that when the credit card bill
comes in, he can pay it off in full.
Tracking each purchase puts a
grand total in front of you
instead of just the amount
you're paying at each point of
sale. Seeing your total spent in a
day or week can help you realize
how much you owe, and keep
you from overspending. There
are many free budgeting apps
available, and major banks have
apps, too, allowing you to check
bank account and credit card
balances from anywhere.
Some of these will also catego-
rize expenses for you, so you
know if you are spending too
much on any one category.
And, of course, you can always
use more traditional methods,
such as an expense spreadsheet
or just pen and paper. "If you
have the right tools in place,
going cashless is not an issue,"
Godinho says.
This article appeared in CreditCards.ca on-line and can be located at the following URL: http://www.creditcards.ca/credit-card-news/going-cashless-causes-debt-1267.php The definitive online resource for Canadian Credit Card Information.
PANGEA Personal Financial Planning™
PANGEA Personal Financial Planning
TM
www.pangeafinancialplanning.com