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Do you need to alert your credit card company before making a large purchase?

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It’s a familiar story: most of the time, you use your credit card for small purchases. Maybe go shopping or pay a few bills. But then a new iPhone comes out with its ever increasing price. You want to put it on your credit card, but you’re not sure if you need to alert your credit card issuer first.

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Like many things in life, however, there is no simple “yes” or “no” answer to this question. In fact, there are certain considerations that may affect your obligation to alert your credit card company. This is what we will see in this article.

Your spending history is important

The first thing to know is that indeed, your spending history is important. In other words, what is a big purchase for you may be small for someone else. If you’ve rarely, if ever, spent more than $ 200 at a time and are now planning to spend $ 999 or more on a new iPhone, it could be a red flag and trigger security measures.

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Another way to look at it is in terms of credit limit. For example, the credit card you want to use to buy your new iPhone has a limit of $ 5,000. If you load $ 1,000 on this card, you would use up 20% of your limit with a single load. This could be a red flag because you are using up so much of your limit on a single purchase.

“Consider alerting your credit card company if you generally have a modest spending profile and purchase an expensive item at a new store, especially if the item’s price is over 50% of your limit.” credit, ”said Andrew Latham, certified personal finance specialist. advisor and editor-in-chief of “Credit card companies report purchases in new zip codes or if you suddenly change your spending habits. “

So, one step you might take is to take a look at your credit card statement. If you’ve spent that much on your card several times in the past, this is normal and shouldn’t be of concern to the credit card company.

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Your card issuer also matters

Every business that issues credit cards is different. They all have different policies and procedures, which means the way they deal with large purchases is different as well. Some will send you an SMS asking you to confirm, others will decline the transaction, and others will not take immediate action.

For example, Chase Bank sends fraud alerts via SMS, email, or push notification. Chase notes that he will send these alerts if there is a “high” transaction, according to his website. Bank of America sends alerts for unusual activity.

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With Citibank, in the event of suspicious activity, the bank contact you by SMS, email, phone or post to confirm activity on your account. Your experience may vary, but the most important thing is that each bank is different and has different policies and procedures.

In general, it never hurts to notify your card issuer in advance of larger purchases. If you don’t, there will be no major consequences; at most, the issuer can suspend the transaction until you verify it by call or SMS. Still, if it gives you the peace of mind to call ahead, there’s no harm in doing so.

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Travelling abroad

What about international travel? Even if you aren’t making any major purchases, you might be wondering if using your credit card abroad could be a red flag. However, keep in mind that some credit cards are specifically for travel. Big banks like Chase recommended that cardholders alert them to upcoming trips, but that has since changed.

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According to Chase, his heightened security measures mean you no longer have to alert the bank. Instead, you will simply receive an alert if any unusual activity is detected.

Since security measures are constantly changing and evolving, it is best to check with your bank if travel notification is required. Chances are, they’ll just contact you if something unusual is detected. Still, it doesn’t hurt to know if your bank requires advance notice. This way you can be sure that there will be no interruptions during your trip – one less thing to worry about.

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Last updated: October 5, 2021

This article originally appeared on Do you need to alert your credit card company before making a large purchase?

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