Seven tips to manage your contactless spending as the limit rises to £100

Contactless payments are pretty handy.

They’re far speedier than the old way of doing things, and don’t require the faff of remembering your PIN each and every time you need to buy something.

But one major downfall is just how easy they make it to overspend.

Just as the change from cash to card added that mental gap between purchasing and the amount you’re actually spending, contactless payments remove another moment to acknowledge your financial choices.

It’s all too simple to tap your card with wild abandon, only later realising you’ve gone right into your overdraft.

And with the contactless limit now rising from £45 to £100, it’s only going to become more tempting to blow the budget.

After all, when all it takes to spend £100 is a tap of your card, suddenly that doesn’t seem like such a big amount… until you reach the end of the month and are desperate for your next paycheque to drop.

Plus, it’s likely we’ll end up making more purchases this way, with minimal thought. After the contactless spending cap went from £30 to £45 at the start of the pandemic, the number of contactless payments in the UK rose by 12%.

Not to be a downer, but we will need to be conscious of how convenient it now is to spend large amounts of money.

The good news is that there are some simple ways to feel a bit more in control.

Set your own contactless limit

You don’t have to go contactless for larger amounts if you know it encourages you to overspend.

Make your own limit. From today, if you bank with Lloyds, Halifax, or Bank of Scotland, you’ll be able to set your limit for contactless spending between £30 and £95 (in increments of £5) through the app.

If you’re with a different bank, don’t worry. You can just make that limit in your head – any time the price is above £30, stick your card in and enter your PIN. It’ll make you more mindful of what you’re spending.

Pay attention to smaller buys

If you’re trying to save, it’s important you break out of the habit of not really thinking about those mini contactless spends.

Even with the cap increasing to £100, it’s not just the above-£50 spends you need to be conscious of.

Every coffee, every lunch, every magazine – it all adds up.

Get a budgeting app and set alerts

Make saving easier by getting an app to do it for you. We like Plum and Chip, but there are loads out there to choose from. Find one you prefer and stick with it.

These apps can create budgets and split your money into dedicated pots – and warn you when you’re going overboard.

It’s also worth setting alerts for every payment as it happens. It’s amazing how much seeing an alert of exactly how much you just spent makes you more conscious of what you’re doing.

Get over the fear of checking your balance

This is important. We know it’s scary, we know it’s tempting to remain in blissful ignorance. But with larger contactless payments now allowed, it’s all the more vital to be in touch with how much money you actually have.

Challenge yourself to look at your balance every day. If you don’t already have your banking app on your phone, download it now. Immerse yourself in knowledge and break down the anxiety that builds in your stomach every time you log in.

Create a weekly budget

You likely have a monthly budget, but now the contactless limit has risen, it’s worth taking closer notice of exactly how much you’re able to spend.

Work out how much you can allocate to essentials and fun stuff each week, then try to stick to that.

Limit your food shops

The more frequently you go to shops, the more opportunities you have to spend.

So, a simple way to spend less? Rather than doing lots of little food shops every evening, make a meal plan, write a list, and do a big weekly shop – then ban yourself buying any more food (which tends to be our biggest expense) for the next seven days.

Look at your statements at the end of the month

Again, it’s all about confronting what you’re actually spending. Set aside some time to go back over your purchases and see where your money is going.

Look for patterns and make a list of the spends you don’t really remember making or regret doing. Then, see if you can unlearn these habits next month.

The first step in fixing your money problems is working out what they actually are, whether that’s clothes shopping online when you’re feeling rubbish or being a baller and buying rounds after exactly one pint.

How long will it take you to meet your savings goal?

How much you’d you like to save£5,000

Clear all

It will take you10 years to save the total amount

If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.

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