Personal Finance 

How to Keep Your Spending Habits Secret from Companies

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privacyNot too long ago, I wrote a post about retail rewards and privacy. In today’s world, all sorts of people are collecting data about what you are doing. While your spending habits aren’t quite being used to change your interest rates in all cases, or being compiled as part of your credit report, there are some credit card issuers that will take into account whether or not you bought retread for your tires, or whether you spend a lot of time at the bar.

Plus, with the recent rise in bank profiling of certain consumer behaviors, some think that it is only a matter of time before specific spending habits could become more important to your financial future. Whenever you use a loyalty card, it is possible for your purchases to be tracked. When you swipe at the grocery store, issuers can see where you are spending your money. If you want to be a little more anonymous, there are some options, but they are few and far between, and true anonymity without paying cash for everything is practically impossible. But you can limit how much of your spending is “out there.” Just be sure to check for fees, since many prepaid debit, credit and gift cards have some sort of fees attached to them.

Buying Gift Cards with Your Credit Card

One of the reasons that people use credit cards is to build up reward points. So, while cash is the ultimate in anonymity, you might want to build up some rewards. One of our readers recently offered a suggestion:

Suppose that I have a 2% general cashback card, and I run $1000 of core expenses through it every month.  Is the $20 I gain worth the loss of privacy?

One thing that can be done is to use a cashback card to buy retail gift cards (no fee), and then use the gift cards for everyday purchases.

This would eliminate the need for loyalty cards at the grocery, since your cashback would make up for your savings, and specific purchases wouldn’t be tracked. You could also buy gift cards for different stores, since many retailers offer gift cards to different restaurants, iTunes, and retail outlets. You could buy a group of gift cards at one store, and then use them — and your name wouldn’t be attached to them.

You get points for your purchase, and future purchases remain mostly anonymous. However, your purchase at the store where you bought your cards would still be recorded.

Buying General Gift Cards

In some cases, the next option is to buy general gift cards. You can purchase a gift card with a Visa or MasterCard logo, and not have to attach a name or address to it — and you can use them fairly anonymously almost anywhere that credit cards are accepted. If you are really serious about having the convenience of plastic anonymously, you can buy these branded gift cards with cash.

However, you should be aware that these cards can be hard to use online. This is because, to prevent fraud, many web sites automatically match an address or ZIP code with what’s on file with a card. So, a gift card that has no name or address attached to it can’t be verified. You will be hard-pressed to find a site that will accept the card number and security code without some other type of verification.

Bottom Line

If you want to be truly anonymous in your purchases, you will need to use cash only, and avoid paying online in most cases. If you use some services that promise to protect your privacy, you will need to be prepared to pay fees. You can limit how much specific information about your purchases gets out there, though, by purchasing and using gift cards.

What are your tips for purchase privacy? Do you know of any anonymous debit or credit cards that can be used? Do you have strategies for anonymous online purchases? Share your tips below.

(Photo: alancleaver_2000)

{ 7 comments, please add your thoughts now! }

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7 Responses to “How to Keep Your Spending Habits Secret from Companies”

  1. cvargo says:

    Is using paypay considerd anonymous? I’m not sure. And one year for christmas i bought a lot of gift cards on a credit card and didn’t receive the rewards. the company said because they don’t give rewards on gift cards, so not all companies give rewards on gift cards

  2. zapeta says:

    Are people really concerned about this?

  3. William says:

    I used to be concerned by the Rewards Cards offered by stores like Kroger.

    But now I use them all the time and really do not care what kind of profile they are making of me. I am not buying items that may raise red flags as some time ago I decided to live a more minimalist lifestyle. So little junk food, soda, alcohol or negative things will be found in my purchases.

    Since my Credit Union has a generous Rewards Program for their Credit Card, I will charge items on it, instead of my Debit Card. Charges are for things like gas, insurance, haircuts, groceries, utilities, doctor bills and so on. So profiling me there would be very boring.

    I am more concerned about my privacy on sites like Facebook, which drastically changed their layout last week, with more changes to come. If anything, I have deleted many photos, past posts and am careful what I put or say on that site. I see a greater risk of companies finding ways to profile me through that site.

    Buying from sites like Amazon, E-Bay and others, as well as checking out books at the Library pose a greater risk, in my opinion. Flying, where one has to give identification also is a greater risk to privacy.

    If I wanted to be invisible that would be a different kettle of fish.

  4. govenar says:

    I guess these people don’t use sites like Envaulted…

  5. zipzap says:

    I shop at a Kroger affiliate, and use their Rewards Card, but when I get my Rewards packet most of the coupons are for items I don’t buy, so I’m not sure how much they’re actually tracking my purchasing habits.

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