About a month ago, I was going through my credit card statement and saw a purchase from Amazon that I didn’t make. I also got a suspicious email that included some of my personal information.
I immediately contacted my credit card company to report fraud. My card was frozen and I was reissued a new one. While this process was annoying, what happened after that was eye-opening.
Here’s what I learned after getting hit with a fraudulent charge.
We give everyone our information
I have one credit card – Chase Sapphire Preferred – which I use for everything. This card scores me rewards for dining out and travel, my top two discretionary expenses. When my card was canceled and I received the new one, I had to update my payment information on all of my accounts.
I use auto-pay for almost everything as this way I never forget to pay a bill or get hit with a late fee. So, I had to comb through all my credit card expenses and take an inventory of all the accounts associated with that card.
What I realized was astonishing. I had thought that maybe the credit card was associated with a few subscriptions. But to my surprise, I paid for tons of things automatically with this card. Think Lyft, Amazon, Starbucks, Chewy, Postmates, Quickbooks, my electric bill, my gym, Internet service, health insurance, and more.
As a millennial, I enjoy the convenience of apps, and I don’t think twice about handing out my credit card information. But when you think about it, when companies have your credit card information, you’re more vulnerable to theft and fraud. It’s no wonder data breaches are at an all-time high.
I’m spending more than I thought
One thing this case of fraud taught me is that I’m spending more than I thought on Lyft, Starbucks and other services. As I was forced to manually add my new credit card information to all of these subscriptions and services, I saw exactly how much I was spending.
It gave me a reason to pause. These apps make it so convenient to spend money without thinking about it. Yet, when you use apps to pay, you don’t even swipe! You press a few buttons and are totally removed from the payment process. That psychological disconnect can easily lead to overspending.
There’s more to manage
It took me more than an hour to manually log into all of my accounts and update my payment information. Even then I was paranoid I missed something and would be hit with a returned payment fee if one of the auto-pay subscriptions didn’t go through.
Let’s just say it took up a good half a day to manage everything. It was a pain and it made me realize that as much as I practice minimalism, maybe I wasn’t a financial minimalist. Had I sacrificed minimalism for convenience? In some ways my life is easier with all of these apps and subscriptions. In other ways, my spending has gone up and my information is out there.
I realize now that every time I give my credit card to a new app, subscription or service, it’s one more thing to manage. Even if I don’t get hit with fraud again, my current card will expire eventually. Then I’ll get a new card and have to go through the same process I just did.
What I’m doing going forward
The fraudulent charge on my credit card was annoying and a hassle. But that was actually the easiest part to deal with. Updating all of my payment information was the big eye-opener that made me realize just how vulnerable we are. It made me realize how simple it is to spend when you’re not attached to the money or the card.
As I was going through the list of items I needed to update, I assessed whether I really needed them or not. Postmates? Delete.
In the future, I am going to be more mindful of giving out my financial information. I know that data breaches are rampant and we can’t control everything, but being cautious is a good thing.
I’m also going to be more mindful of how these apps and services add to my spending and eat away at my potential savings. I’m all for convenience but I also don’t want to fall into a trap where I’m spending mindlessly when I could be saving more.
So, while this instance of fraud was a hassle, it taught me where my money is going. I also learned about how to better manage and track my finances, as well as just how vulnerable we are when it comes to using credit cards to automate your financial life.
The moral here: Stay cautious and mindful folks.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.