A little under a decade ago, acquiring cash or purchasing goods or services was a lot more difficult than it is today. Moving from cash, cheques and credit cards to non-physical methods of payment. One thing all these new developments have in common is that they have made spending money much easier. Here is what you need to know about online spending.
While having instant access to your finances at all times provides an increased sense of security for most individuals. If not monitored, this can lead to dangerous overspending.
A number of new technologies have allowed people to carry out everyday activities with ease. Supermarkets now allow you to buy groceries online, delivering them to your doorstep. Fashion stores are also doing the same – delivering even to your workplace.
Other new technologies in the e-commerce and m-commerce space include:
Online and cell phone banking platforms
Various banks have developed applications and cellular services that can be easily downloaded to allow individuals to handle their finances effortlessly. Individuals are able to carry out electronic cash transfers (EFT’s) through such platforms. Always double check that you have entered the correct details when using these platforms to avoid costly mistakes. Also, ensure that platforms are verified and safe. Most online stores only accept credit cards for payment, so transferring the funds from your bank account into the credit card before the purchase is best.
Online payment solutions
The online payment solutions such as PayPal and PayU provide a universal platform for individuals to buy items online, paying through credit cards. While this may be an easy way to purchase items, if not properly monitored, it can lead to a mountain of debt. Ensure that you have enough money to purchase items, and again, ensure that these platforms are verified and not scams. When using a company such as BidOrBuy, it’s important to make sure of shipping costs. You may have budgeted for R500, but shipping can also cost R500 on the item, leading you to spend double than what you planned for.
Auctions and mail-order
Websites such as eBay and Kalahari.com provide access to a variety of products and catalogues allowing individuals to be spoiled for choice. When bidding, it may be a good idea to make sure that products are in good condition and not scams. Ensure that auction products are received before or upon payment.
FuturePay is a card free online method that allows individuals to buy items now and pay for them later. While this does provide customers with the comfort of not having to enter their personal and credit card information immediately – if not monitored correctly, you could spend above your means. Be sure to set a limit for yourself – buying only what you know you can afford.
Mobile money transfers
Mobile money transfers, better known as m-pesa allows for deposits to be made into an account stored on your cell phone. It enables the sending of balances using PIN-secured SMS text messages to other users – merchants as well as regular debits. Ensure that you keep PIN information private to avoid any fraudulent activity.
Purchasing online with your credit card provides you with the option of putting the purchase on the budget facility or straight. Plan how you’re going to repay that purchase before doing any purchasing. Remember, credit cards have one of the highest interest rates.
Keep exchange rates in mind when purchasing online. Make sure that the price you are paying is in ZAR and not an international currency such as the U.S. dollar. Being negligent in this regard could cause you serious credit card debt.
While these technologies make it easier for individuals to manage finances and make purchases, if online spending is misused it can lead to a downward spiral of debt. Whether you make use of these platforms or not, keeping a budget in mind will help you stay on track, and help you avoid financial stress in the long run.