Why Getting a Digital Wallet Is a Smart Financial Move
Wallets have gone through a major transformation in recent years. Instead of stashing cash and bank cards in a physical wallet, more people are paying for products and services with their smartphones.
Using payment services like Apple Pay and Google Pay aren’t just convenient. They can also offer extra security and encourage you to maximize your credit cards.
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The pros and cons of digital wallets
Digital wallets use tokenization and encryption to prevent your real credit card number from being transmitted. This technology offers enhanced security that makes digital cards generally safer than the chip you’ll find in a physical card (and you don't have to worry about your wallet getting stolen).
As a result, it’s challenging for hackers to steal your financial information, even if they manage to steal your physical phone.
Digital wallets are also a big win for people who have multiple credit cards and are hoping to maximize their rewards on every purchase. Because some cards offer as much as 5% cashback for specific categories, it can make sense to use one card for your gas, another for your groceries and another for booking travel. If you use Apple Pay or Google Pay, you no longer have to worry about stuffing your wallet with multiple credit cards. You can easily put all these digital cards in your digital wallet and choose which one you’d like to use at the time of your purchase. Plus, you can store your boarding passes, concert tickets and more easily in the same wallet you keep your credit cards.
But digital wallets come with downsides, too. You always have to have your phone on you, and some retailers don’t accept digital payments.
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How to make the most of a digital wallet
Start with finding the app that makes sense for you. If you have an iPhone, this is probably Apple Wallet and if you have an Android, look for Google Wallet.
Then, add your most-used credit cards. You can always add more cards later if need be, but you’ll need to choose a primary card as the first one that comes up when you pull out your phone to pay. This will require providing your banking information, as well as verification.
Then, add any loyalty cards or membership IDs — like a gym membership — that have the digital option. Depending on the wallet, you may also be able to add gift cards.
Next time you’re at a store that accepts digital payment, opt for contactless payment. It’s still a good idea to carry a physical card if you can, since not every store accepts Apple Pay and Google Pay.
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