It’s a sign of the times: High-visibility data breaches at online and bricks-and-mortar retailers have consumers convinced, perhaps rightly, that their credit and debit cards are more at risk than other things that are more important — health, for instance, or retirement savings. So those little plastic cards in their wallets give them more nightmares than just about anything else.
A Honeywell consumer trust survey reveals that trust has become a huge issue after major hacks at retailers such Target, Neiman Marcus and Michaels resulted in millions of consumers affected. And consumers don’t believe that it won’t happen again; 60 percent say such events will increase over the next year.
In fact, more consumers (93 percent) are afraid that their credit/debit card data will be compromised than are afraid of health problems (84 percent) or retirement savings worries (81 percent) — concerns that one might expect to rank higher because of their importance in life. And they’re more worried about retail breaches than they are about the privacy of their online communications (86 percent), which is remarkable considering the amount of press that issue has gotten.
The Honeywell survey found fears over retail breaches has actually changed consumer behavior.
Seventy-six percent said they’re less likely to use a credit or debit card at a retailer that suffered a data breach; 38 percent said they’d stop shopping there altogether if their own data had been compromised — something Target can certainly attest to, after seeing sales fall from 43 percent of U.S. households in January of 2013 to 33 percent in January of 2014 (after its breach became public).
Honeywell said that those most concerned about the security of their credit and debit card information are female, those with incomes less than $75,000 annually, and those without a college degree.
Of course, in the long run, this could be a good thing for retirement savings — although credit card companies and retailers certainly won’t think so.
According to the survey, “(E)conomic and psychological research has long shown that consumers tend to spend more when paying with credit cards than when paying with cash.”
Therefore, anything that impedes the urge to part with money could end up as savings for retirement.
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