You can store so much data on your smartphone you may wonder if you really need a physical wallet anymore. It’s just taking up space in your handbag or pocket, right?
Much like snipping the cord to your landline, putting your financial information on your phone and getting rid of your wallet might seem like the logical next step.
Before you abandon it, however, it’s important you know what you should and shouldn’t upload to your phone. Keep reading to find out, then decide whether you really need that wallet after all.
Cash
A 2022 Gallup poll found that 6 in 10 people make only a few or no purchases with cash. There are times when dollar bills come in handy, though.
Sean K. August, CEO of New York-based The August Wealth Management Group, recommends having at least a little on hand.
“If you’re going to places where you will need to tip, such as a valet for your car, bring cash,” August says.
“It’s also a good idea to have at least a small amount with you for emergencies,” he adds. And if you want to buy something that costs less than $10, you can avoid the extra fee a merchant can tack on if you use a bank card.
That said, when you’re sure you won’t need cash or there’s a chance it will get lost or stolen, scratch it off your list of things you need to add to your wallet.
Credit and Bank Cards
Smartphones have digital wallets that enable you to upload your credit and bank cards. Once you do, you select the account you want to use for contactless payments. You can also link PayPal, Venmo, Zelle and a host of other payment apps to your credit and bank accounts and use them to pay for things.
Stored cards on your phone seamlessly replace physical ones, but keep in mind that if your phone isn’t charged or the merchant doesn’t accept contactless transactions you’ll need another way to pay for your purchases.
“The fact is, sometimes an actual card is necessary and you’ll be glad you have it with you,” August says.
So, before you leave your home without your wallet make sure the places you’ll be going accept electronic payments.
[Read: Best Credit Cards.]
Gift and Prepaid Cards
If you received a bunch of gift cards for your birthday or some other celebration you can upload them to your phone. The cash values will be safely stored until you’re ready to use the cards.
You can also add prepaid debit cards to your mobile device. If you’re confident where you’re shopping will accept them for payment — and your phone is juiced up — you can leave your wallet behind.
Loyalty Program Cards
Supermarkets, drugstore chains, department stores and more often offer free rewards cards. You present the card at checkout and get instant discounts on certain items.
If you want to leave your wallet behind, just give the cashier your phone number or email address and they can add it during the transaction so you get your discount.
Social Security Card
Your Social Security card doesn’t belong in your wallet: If a thief got it you could be in danger of financial fraud.
“I would not suggest keeping your Social Security card in your wallet,” says Vincent Walden, a New York City-based certified fraud examiner.
“It’s such a pain to replace if you lose it, but it’s dangerous when the card is in the wrong hands. Your number, combined with other information like your name and address, can be used to create and open credit lines for malicious use,” he says.
Just don’t take a photo of it and upload it to your phone, Walden says. Instead, memorize the number and stash the card in your home or a safe deposit box.
[Read: How to Apply for Social Security.]
Driver’s License
You’re legally required to have a valid driver’s license with you when operating a vehicle — and it’s the most common form of personal identification to confirm your identity, prove your age to buy alcohol, get into a bar or show to airport security.
Although a wallet is typically the place one keeps a license, a secure version of it — and/or your state-issued identification card — may be available for your cellphone or smartwatch.
According to Secure Technology Alliance, however, the electronic versions aren’t offered and/or accepted in every state yet. Until they are, you’ll need to bring your actual license or identification card with you.
“I don’t see physical IDs going away entirely in the near future,” Walden says. “Besides, if my cellphone is dead, I won’t have my license to show.”
Purchase Receipts
The cashier hands you a receipt after you pay and you tuck it into your wallet. It’s great that you’re keeping them, August says, but your wallet isn’t the right place for them. Not only can paper receipts get crumpled, destroyed or lost, it’s an inefficient personal and business finance system.
Opt for emailed receipts instead, or download an app like Smart Receipts or Wave. You just take a photo of your receipt and the app will store and organize it on your phone.
This will help you quickly access your receipts when you want to return a product, plus if you need the receipts for tax deductions they’ll all be in order.
Before You Ditch Your Wallet, Protect Against Hackers
After considering everything you can transfer from your physical wallet to your phone, weigh the potential downsides.
Marco Bellin, CEO of internet security company DataCappy in New York, says there are security risks associated with going all electronic.
“Obviously, you can’t live a digital-free life,” Bellin says.
“If you choose to post, browse and store sensitive information on your smartphone, be sure to safeguard that data with a virtual private network,” he says.
You can enable the VPN on your phone in “settings” or install an enhanced version. These programs hide your geolocation and help protect your online privacy by preventing hackers from accessing your data.
The bottom line here is that you need to balance the convenience of relying only on your mobile device against the possibility of issues arising. You may decide to toss your wallet or simply downsize it instead.
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Is It Time to Toss Your Wallet? originally appeared on usnews.com
