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Where Is the Money? How to Control Electronic Spending

Debit cards, credit cards, and e-checks make it easy to overspend -- way too easy. Our experts explain how you can cut costs by being more vigilant about your virtual dollars.
Keep Tabs on Spending
paying bills online
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Andrew Bannecker

They're quick and painless -- and there's no writer's cramp or envelopes to lick. Electronic payments using credit cards, debit cards, or e-checks are more popular than ever, accounting for more than half of consumer spending. But convenience comes with a downside. "When you use cash or checks, you know the money is finite," says Mike Peterson, cofounder of the American Credit Foundation and author of Reality Millionaire: Proven Tips to Retire Rich (Reality Media). "Electronic payments take away that tangible feeling of spending, so it's harder to keep a lid on expenses," he adds. This out-of-sight, out-of-mind mentality isn't lost on credit-card companies and banks, which are experts at raising rates or sneaking in fees and extra charges when you're not looking. But while rising costs are eating up more of your hard-earned dollars, you can get a tighter grip on spending, whether it's plastic, online, or both.

Avoid monthly-statement shock.

View your credit-card charges online weekly or biweekly to keep better track of your balance, which will give you the opportunity to pull back if you're spending too much. Another plus: "You'll catch any fraudulent charges to your card more quickly," says Bob Sullivan, author of Gotcha Capitalism: How Hidden Fees Rip You Off Every Day -- and What You Can Do About It (Ballantine). Go to your credit-card company's Web site, find the personal accounts area, and use your card number to establish an online account. You can't do this with debit cards, so unless you log that spending in a ledger, you won't know how much money is left. For a heads-up on your debit-card balance, ask your bank to automatically send you an e-mail when your funds drop below a certain point. "A good buffer is at least $200," says Emily Davidson, who writes about personal finance at