Decline Your Own Credit Card With MasterCard's Help

If you can’t control your own credit card spending, MasterCard is partnering with Citi to come to your rescue. The two companies are announcing a new credit card featuring a service called inControl. This will allow card holders to customize spending limits by category, by country, or by several other criteria.

The service is already being used by employers offering company cards in an effort to ensure employees aren’t abusing the privilege of using corporate credit. Here is a description of the service as it’s currently used overseas:

Using a Web-based interface… a supervisor can set an overall spending limit for an individual employee or an entire staff category, as well as compile a list of approved hotels and restaurants… They can also choose to have charges declined after a certain hour or at questionable establishments. Micromanagers will thrill at a feature that allows them to receive real-time updates on their employees’ spending via e-mail or text message.

As the feature is introduced to personal credit cards in the United States, it will be marketed as a way for credit card holders to customize spending limits. For example, if you wish to budget your spending to $100 per month in restaurants, Citi and MasterCard will decline any purchase at a restaurant that puts you over that limit. This can help with overseas fraud, too; you can configure your card to decline a purchase made outside the United States.

I’m not convinced this service will be successful in modifying behavior. In the first example of restaurant spending I mentioned above, it is easy to imagine using a different credit card to circumvent the self-imposed budget.

The best way to change spending habits in order to save more money is to consciously control your actions, not to rely on a third-party service to babysit your wallet. That is not to say the feature is completely useless; it can be a way for parents to teach their children responsible use of credit. Teenagers can have a chance to build credit while parents are relatively secure they won’t receive any surprises at the end of the month.

The inControl service is scheduled to be rolled out in the next few months. At first, it will only offer alerts when spending reaches the user-defined maximum, but eventually the full-service nanny will be in effect, declining transactions that exceed the assigned budget.

What do you think of the inControl service? Is this just another way for consumers to outsource personal responsibility to credit card companies or will this be a useful feature that helps people save more of their own money?

Photo: David Paul Ohmer
Your Card Has Been Declined, Just as You Wanted, Ron Lieber, New York Times, August 13, 2010
You’ve Been Pre-Rejected, Aili McConnon, BusinessWeek, April 17, 2008