The Most Important Credit Card Alert You Need to Know

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Are you concerned about credit card fraud? Worried about someone making unauthorized charges to your debit or credit card. If you are, here is one simple method you can use to minimize your exposure to fraud and avoid fraudulent charges. This may be the most important credit card alert you ever use. It’s called a purchase alert.

What is a Credit Card Alert?

Financial institutions and credit card companies provide cardholders with different methods to alert them of activity on their account. The most common notifications are:

Bill – when your statement is available.
Payment – when your payment is due.
Past Due – when your payment is past due.
Password Change – when your password has changed.

These notifications may be sent to you via email, text message or by mail. Most cardholders are familiar with these types of notifications. What most users don’t realize is that there is another alert notification you can use on your account that will help you avoid fraud. It’s called a Purchase Alert.

How Purchase Alerts Work

Some financial institutions will call them a purchase alert. Others may call it a charge or transaction alert. Whatever you call it, it’s a way of notifying the cardholder that a purchase has been made using their card. Here is how it works.

A purchase alert allows you to set up a notification each time a purchase is charged to your account. Each time a transaction takes place you are notified via email or text message. The message typically tells you the amount charged and the retailer processing the transaction.

The email or text message is sent based on a minimum dollar value you specify on your account. For example, if your minimum dollar value is $500 you will receive a purchase alert if a charge is made to your card that is $500 or more. Charges made that are less than $500 do not send out an alert notification.

Many cardholders are unaware of this alert feature. Most often this is because when their account was originally created a high dollar value was entered as the minimum (by the financial institution as a default). In the example above, if your minimum was set at $500, and you don’t regularly make purchases of $500 or more, it’s likely you have never received any purchase alert notifications.

You may be thinking that a high minimum alert level is a good thing. After all, you don’t want to receive an alert every time you purchase an item. However, as it relates to credit card fraud, a high alert threshold can be a problem.

Why You Should Lower Your Cards Minimum Purchase Alert Level

I have been a victim of credit card fraud three times. In all three cases, the unauthorized fraud was caught and the charges removed from my credit card bill. After the first incident, I lowered my purchase alert minimum from $500 to $10.

Why? Because one of the things I learned about the fraudulent charges on my account, is that none of them were over $500. Each time the fraudulent charges were made it was for “small” dollar amounts. And the charges were made at different retailers. I am not a credit card fraud expert however I think I understand why this may be.

Individuals involved in credit card fraud have nothing better to do on a day to day basis, so they can get pretty creative about how to steal your money.

(I always imagine these individuals sitting in their basement in front of their computer with a year’s supply of Hot Pockets, a bag of Cheetos and a case of Mountain Dew Kickstart just thinking about ways to take your money).

They understand that if they charge a $1,000 item to your card it will show up like fireworks on the fourth of July. So their practice of fraud looks something like this.

Purchase an item for $10 – if the transaction goes through…
Purchase another item for $50 – transaction processed!
Charge another item for $100…

If they are smart and not to greedy, they won’t continue to make charges to the same card over and over again. Nor will they continually purchase from the same retailer. If they do, they know that it becomes more probable that they will get caught.

Smaller charges like those above are not likely to get noticed by the cardholder (at least not immediately) – the transactions blend in with all the other purchases on the card.

All three incidents of fraud that I experienced happened this way. After the first incident, I lowered my alert minimum to $10. Because I lowered my purchase alert minimum, I was notified via email as soon as the fraudulent charges were made. I was able to notify my credit card company immediately, so they could deactivate my card.

What I learned from my experience with fraud is that part of being able to minimize your exposure to credit card fraud is being able to identify it as soon as it happens (don’t rely on your financial institution to do it for you). A purchase alert on your credit card provides you with the ability to identify fraudulent charges immediately.

How to Set Up a Purchase Alert

It’s likely your bank or credit card already has a purchase alert minimum activated on your account. However, it’s also possible that the minimum is set very high. One of the reasons they do this is so they don’t inconvenience their cardholders every time a purchase is made.

If you are not sure what your transaction alert minimum is, here are two simple ways you can find out.

Log into your online account. Each company will use different terminology regarding alerts. Look under your account settings tab or a tab that says alerts. Locate the settings for “charge”, “purchase” or “security” alerts. Check your alert minimum (i.e. may read: “notify me when purchases are made over $xxx.xx”). Also, be sure to verify they have your correct email address and phone number (texting).
Call your credit card company to find out what the current alert limit is set at. Again verify the email address or telephone number they have on file.

Because credit card fraud is becoming so prevalent, most financial institutions have become very diligent about monitoring their customer’s credit card activity. Most often, as soon as the charges are identified as fraudulent, the charges are reversed from the card holder’s account. However, the key is to identify the charges as soon as possible. Protect yourself from credit card fraud by adding an additional layer of protection – set up your own purchase alerts. Give yourself the peace of mind knowing you can stop fraud before it costs you any money.

Consider taking credit card monitoring one step further. Use a free-scoring and monitoring service like Credit Karma to add another layer of security to your transactions.

Helpful Resources:

Download my FREE Workbook – Templates and Worksheets for creating your own get out of debt plan. (PDF Format for printing)
Be sure to check out my eBook, Filling The Pig – In 4 Steps, and learn more about successful credit card management.
Credit Karma – Free Credit Score, Monitoring & Insights

How do you manage credit card fraud? Comment below.