Shopping online is convenient for so many reasons – you can do it anytime of day or night, you can wear your pajamas, you don’t have to find parking, and so on. One other way that online stores try to make shopping easier is by allowing you to save your payment information. If I’m sitting on the couch with a cat in my lap and shopping on my phone, I’m much more likely to make a purchase if I have the payment information already stored. If I have to disturb the cat, get up, find my wallet, pull out my card, and enter all the numbers, I’m probably going to rethink whether or not I really want to buy.
I’ll be honest – I love the convenience, especially for things like ordering pizza. It’s great to be able to open the app, click a few buttons, and have dinner on the way.
However, all this convenience comes at a risk. One obvious risk is that these companies will get hacked and your credit card information will be stolen. But the lesser discussed, yet more likely risk is that your store account will get hacked into and someone will use your account to order things for themselves. Why? Because you have stored your payment information online?
I’ve had this happen to two different accounts. Once at Sephora and once at Zulily. Both times, I caught it before the items shipped, so the thief didn’t get away with anything at all. (Of course, in both cases, just in case, I changed all my credit card information and account information as well.) If you monitor your emails and get notified when something is ordered or your account info is changed, this is likely the result you will end up with as well.
But what about online sales with much quicker delivery? I’m thinking food orders and car services. If someone orders pizza on your account, even if you catch it pretty darn quickly, it’s likely that thief will end up with a delicious pizza on your dime. (Yes, you can dispute the charge, but what a hassle, plus the thief also still wins.) I’ve heard stories of hundreds of dollars of Lyft or Uber rides being taken on someone’s account in a few short hours. If you put your debit card on your account, you might find your account quickly being drained and causing you some financial issues before the problems get solved.
So the lesson? Be careful where you store your payment information. I try to be choosy about the accounts where I store my information, make a point to not reuse passwords (I love password managers that will generate ridiculous passwords for me), and pay close attention to charges on my credit cards. I’m not saying you shouldn’t store your payment information online, but maybe don’t save it everywhere. And if at all possible, don’t link your debit cards – in this case, a credit card is often safer.
Convenience is awesome. But it comes with risks. Just be aware of those risks and you can safely enjoy ordering shoes from your couch.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.