Overspending on Real Goods

With a host of online retail, auction and daily deals sites it’s easy to get carried away and spend more than intended. (This is especially true considering that most online purchases are made using credit.)

Overspending on Virtual Goods

The market in “virtual goods” – items and services that exist only online – reached 653 million dollars in 2011. Many of these goods relate to online games: from purchasing the games themselves, to upgrading avatars, purchasing items or getting through levels more quickly. Apps for mobile devices are also popular purchases online. (Apple claims to offer over 500,000 Apps for its iPod, iPhone and iPad platforms).

Security Tips

Whether overspending is on physical or virtual goods, there are a number of tools and strategies that can help keep this under control.

• Since most online purchases are done using credit, keeping the spending limit on a credit card low – or using prepaid credit cards – can help curtail impulse buying. Some retailers such as iTunes allow parents to give their children a set “allowance.”
• Watch for hidden fees, shipping and handling, or customs fees, when buying physical goods online.
• When buying any virtual product or service, make sure to read the description and service agreement carefully.
• Finally, parents should talk to their children about some of the risks associated with buying things online and make sure they understand that many virtual goods cost real money.