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04/10/2011

I'm sorry, this credit card has been declined ... by you

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  We've got smart phones, but what about smart credit cards that, like wallet-sized Lilliputians, tie you down when you're about to spend too much? If in your travels, you find yourself overspending on certain things - in my case, Starbucks iced coffee - this new money management tool could be useful.
  Through a service called inControl, you can tell your bank to decline your credit card at restaurants after, say, $300 in lunches in a month. Ron Lieber of the New York Times reports that MasterCard and Citigroup* plan to install inControl for people looking to reduce their consumerist urges. Or, as Lieber puts it, the banks will become "a partner in your self-improvement instead of an enabler of your misdeeds." If that misdeed is an addiction to Sam Edelman's spiked pumps at Bloomingdale's, simply cap your spending at the retailer.
  Additional benefits include cell phone alerts that warn you if your credit card is used out-of-state, or by potential thieves from faraway places. My brother, who's racked up $1,000 in iTunes purchases in the past year, could use an auditory nudge for sure. There are controls for our kids, too, who say they need money for emergencies but are really splurging at Hot Topic.
  It sounds like a good idea - limiting spending in the categories we overspend the most - but is there a downside? Say you're out to brunch with a lovely lady or man and you decide to pay. In the delirious afterglow of the night before, you forget that you've brunched at Le Diner six times this month and are on the brink of being OutOfControl. Then, when le waiter comes, he says, "The card has been declined ... by you." Are you willing to take that risk of a capped card in order to put your overall financial well-being on track?
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