NerdWallet’s Consumer Borrowing Index, a nationally representative study of 5,000 UK adults, has detailed a fear amongst British consumers that the increased contactless limit could lead to overspending around Christmas.
Almost six in 10 (58%) felt that the £100 limit would encourage more people to spend beyond their means, with the barrier of having to input a PIN removed.
This higher limit for cards and mobile payments has also prompted worries about the risk of falling victim to fraud. With larger amounts of money now easier to spend with a simple tap, 61% of people were more concerned about the prospect of card theft – and the accidental debt that could result from this.
Denise Ko Genovese, Senior Personal Finance Expert at leading price comparison site NerdWallet, commented: “Keeping tabs on your cards has never been more important. Although contactless has always posed a risk when it comes to card loss or theft, now that the limit has risen to £100 we advise that consumers get to grips with their banking facilities and know how to block or report their card should they suspect any fraudulent activity.
“For those worried about the impact of the increase on their spending habits, many banking providers now offer the option to adjust the contactless limit, so people can better manage their budgets before heading to the checkout.””With the purchasing experience already reduced to a simple tap, the increased limit makes it even easier to rack up your spending. As we approach the seasonal sales, you should get smart with your budget as it is even more important to ensure you are spending within your means.”