Credit card ‘off switch’ to stop binge spending
Shoppers could block online sprees or set daily limit
BOSSES at the UK’s biggest credit card may set up an ‘off switch’ to help compulsive spenders protect themselves against shopping sprees.
Barclaycard customers worried about binge spending would be encouraged to sign up.
The off switch might stop people using their card online or at certain times, say between 9pm and 9am.
Alternatively, it might cap the spending on a single transaction or over a 24-hour period.
The rise of online shopping means purchases can be made at any time of the day or night. This has played a part in the rise of the ‘vampire economy’ – people shopping when they should be sleeping.
But, while some get a short-term high from an online binge, the result can be massive credit card debts carrying punishing interest rates and charges. A number of retailers, including Amazon, target vampire shoppers by sending out offers through the night.
Paul Lockstone, managing director of Barclaycard, which has 10.5million UK customers, said retailers have a responsibility to offer a flexible returns policy to those who regret purchases. On protecting compulsive spenders, he said: ‘One of the things we have been investigating is the potential for people to be able to turn on and off facilities in relation to their own spending. We are not able to roll that out at this stage. But it is something that potentially we are investigating.’
He told Radio 4’s You & Yours: ‘The challenge is always going to be finding a way to look after the people who need that protection and encouraging them to take advantage of it.’
Barclaycard said it is unable to give any more details because planning is still at an early stage. Any such schemes rely on people recognising they are binge spenders or shopaholics and volunteering to sign up to the system.
Polly Mackenzie, director of the Money and Mental Health Policy Institute, said: ‘We really like the idea. There is a huge issue of compulsive spenders, but at the moment these sorts of controls are just not available.’
There is evidence that people with mental health problems spend more when they are unwell, she said, but the problem goes beyond this group. ‘It is might be that people are spending to cheer themselves up or even buying just so they get to see a delivery driver.
‘They might be buying things for friends or family as a prop to build feelings of social value.
‘Problem spending on credit cards does not necessarily mean spending £20,000 in one go, it might be £30 on a takeaway for the kids.
‘Credit cards are such an easy way to build up credit. People lose track of how much they are in debt and how much it is costing them.
‘In the end people can suffer enormous stress.’
Banks appear open to the idea of controls to stop binge spending, she said. ‘Everyone we have spoken to in the finance industry can see the merit and have agreed to look at it. Visa and Mastercard say they have the technology to make it work.’
MILLIONS are shopping online when drunk, making rash purchases from a snake or a didgeridoo to a £6,500 car, a survey reveals.
One in 20 of us have bought goods from a website after drinking, according to online marketplace Flubit.com. The most popular time for vampire shopping is the early hours of Sunday, it says.