Better notification by credit cards

Almost all credit cards will let you download transactions. Many will e-mail you a balance or payment reminder once a month, or a warning if your balance goes above a certain amount. And I’ve seen a small number that will e-mail you on every transaction.

But does anybody have a smart notification system which I can set, allowing me to be comfortable that there is no misuse of my card without filling my mailbox?

  • At a basic level, notification (email or SMS) of transactions above a certain amount
  • Combine that with notification when a group of small transactions exceed a set amount or an amount of time goes by (E-mail only)
  • “You don’t need to notify me of this transaction” for your repeating transactions
  • Easy console to turn on or off warnings and fraud alerts on foreign locations

For those of us who are on e-mail or SMS literally every day, this is a lot better fraud protection for us than the systems they use now, especially the one that find us with denied transactions in unusual places.

Update: Thanks to all commenters — some cards are providing many of these services.

Some options

I wouldn't count on finding what you're looking for by appealing to the credit card companies and banks. Each bank will end up doing it a little differently, probably with a limited or poor experience, and in their own time (slow as molasses).

Instead I look forward to improved 3rd party services that integrate with banks, such as mint.com and billguard.com. Mint.com can easily be configured to send notifications for transactions over a certain limit, and includes budgeting capabilities as well. BillGuard.com is attempting to build intelligence in to warn you of any potentially suspicious transactions. I'm sure there are a lot more out there or on the way!

You might be right

Though I have always been wary of giving 3rd party sites access to bank accounts. (Credit card accounts is OK though.)

Of course the credit card companies pay for the fraud, not you but if you don’t see it for a few months they can hang it on you. But a simple e-mail notification (perhaps even with a max of once/day unless very large) would not bother me much and keep me in control of spending and possible fraud.

The whole credit card system is flawed — I just have a number and anybody who gets that number can charge to my account. The paypal/cheque system is superior, where I initiate the transaction using a password or device that I never give to anybody else.

really a problem?

"The whole credit card system is flawed — I just have a number and anybody who gets that number can charge to my account."

If it were really that easy, the system would no longer exist. Anyone I have ever bought anything with via credit card has my full details. But mine have never been abused.

AFAIK, unless there is a piece of paper with a signature on it, or unless a PIN was used, when in doubt you can get the money refunded at no charge to you. If this weren't the case, no-one would use credit cards. There might be flaws, but this is not one of them.

Costs of system

As a percentage, it’s not large but the total is huge. You pay 2-3% of the transaction to the credit card company each time (don’t be fooled into thinking the merchant is the one paying.) Customers as a whole also pay tons of usurious interest and penalties, even if you are good enough to avoid them. All this pays for the losses of the low security system. (You can get 1% or so back in rewards, and one month’s free interest — not much at the rates banks are borrowing at today.)

But the big cost comes when your card number is lost or misused. Not paying unauthorized charges is your right of course, but getting it to happen takes work, and you always have to get a new card (and redo any recurring transactions to boot.) The card method is stupid. When people cracked into the TJ Max network and stole all the card numbers, millions had to worry about identity theft and get new cards. If somebody stole a list of paypal transactions all they would have is account names and transaction records, not numbers that can be used to charge you.

Of course

"don’t be fooled into thinking the merchant is the one paying"

Of course, ultimately the customer pays everything. Who else should?

However, at least in Europe, there is no surcharge for paying by credit card in a brick-and-mortar shop (there is sometimes on the web, but it is an extra charge and denoted as such so I know the overhead I am paying); in other words, all customers subsidize the credit-card system. Of course, some vendors might think it an advantage not to deal so much with cash.

Who is paying

The reason there is no surcharge for credit card is that normally the credit card companies prohibit it in their contracts. And through an incredible bit of legislation buying, they have managed to pass laws in several areas prohibiting credit card surcharging, except for the government! Some places get around this by offering a “cash discount.”

I think this is crazy, that we pass 2% or more of the retail economy to the credit card industry in order for them to get the chance to pull people into debt and charge far above market interest and penalties. That paypal charges the same, even when you pay from paypal balance, is another crazy legacy of this. People are working on competitors but the cards have an oligopoly right now.

2%

Even if it is 2% everywhere, will someone going for a meal, say, go to a restaurant which doesn't accept credit cards because it is 2% cheaper?

There is a bit of a catch-22 since if a company adopts another, cheaper system, it might have to stop accepting credit cards, thus losing established customers.

Within Europe, especially within the common-currency area (it's complicated: see link below), direct bank-to-bank transfer (which has been around nationally for a long time) is becoming increasingly common, and often it is cheaper than a credit card. Most people in Europe probably use credit cards mainly when travelling outside their home country, since within giro transfer (both in shops and on the web) is cheaper and quicker.

http://en.wikipedia.org/wiki/File:Supranational_European_Bodies.png

bank to bank is growing

And should grow. And the debit card world is also growing, in response to the credit card 2% grab. It is in fact getting common in some places (not so much in the USA) for merchants to only accept debit cards rather than credit cards, because the fees are much lower. The money comes immediately from your account.

The credit card 2% comes from a long history, but the world has changed. Many stores offered their customers credit and had store cards. These became charge cards (no credit except for the free month) and eventually the credit cards with long term debt appeared. Merchants accepted the charges because it was easier than setting up their own credit cards, and customers liked getting credit. Merchants liked being paid immediately — it was much better for cash flow than waiting for customers who had store accounts to pay their bills, and they liked not having to send bills. The cost was of course borne by the customer eventually.

Today we have electronic transaction systems that can handle the logistics of payment for sub-penny per transaction. The things that justified the credit card no longer exist, except for the desire for credit itself. Many users of credit cards have no desire for credit, we pay our full balance every month. Others want credit, and others are seduced into credit, borrowing when they should not really borrow.

Credit of course costs money, but only a few really need it, and frankly there are other ways we could arrange credit, perhaps on the customer end, and leave the rest of us on a direct payment system which costs pennies per transaction. This would also help the online world sell small things.

Amazon Card Comes Close

The Amazon Rewards card by Chase comes pretty close. You can set it to email/sms you when ever a charge more than $X hits your account. This works amazingly well and I usually get the alert within seconds of making a charge. You can also set it to only alert you with charges made without swiping the physical card.

There are probably other Chase cards that share this same feature, but this one effectively gives you a 3% discount on everything you buy from Amazon (and 1%-2% on everything else), which is among the best of these programs especially for Amazon junkies like me.

http://josh.com/ly/HJ5L2

I've imagined building a system that could receive these real-time alerts and cross reference them with my physical location using something like Google Latitude. It would pop up a message on my cellphone whenever my card is used someplace where I was not. This system would not require the cooperation of the credit card issuer to work - only timely charge alerts like the Chase Amazon card already provides. I could build this system pretty easily if there are enough people who would actually use it, so let me know if you are interested.

Of course, the ultimate solution would be a system that would pause each time you attempted a charge and wait for you to enter your PIN into a popup on your cellphone before issuing the approval. This would end almost all fraud, but would require the credit card issuer to do the work.

already got that

Whenever more than EUR 100 goes out of my checking account, I get an SMS. Whenever ANYTHING gets charged to my credit card, I get an SMS. This is immediate; when paying, withdrawing cash etc I usually get the SMS before I've put my wallet back in my pocket. This is directly from the bank involved, nothing to do with a third party. One can turn this on and off, adjust the threshold etc in one's web-based account "control centre".

I've also moved to SMS-based TANs. When a TAN is needed, one is sent to a registered mobile-phone number. It is only valid for a specific transaction (i.e. amount, recipient) and only for a few minutes. At least as long as one doesn't use the same mobile-phone for the web-based internet banking (I don't; my mobile phone doesn't even do internet, Bluetooth etc; it's from 2002 or so---a Nokia 3330 and I have several for spares since it is all I need and nothing more), this is pretty secure. (For what it's worth, I've been doing financial transactions via the internet for years and have never had any bad experiences, but maybe I was lucky. Of course, I don't use easily hackable software either.)

Bank of America does both Email and SMS

Bank of America does both Email and SMS, with a wide range of potential alerts:

Available balance (daily or weekly)
Check deducted over $_____
Debit card/ATM deduction over $_____
Debit card charge made online, by phone, or mail
Debit card transaction outside the U.S.
Direct deposit credited to your account
Electronic draft deducted over $____
Balance below $____
Money transfer deducted over $____
Online bill payment deducted over $_____
Check #_____ has posted

While there are occasionally amusing times working with their customer
service, Ive found both the online banking and alert system to perform
exceeding well.

/John

forgot that

Right. I also have (weekly, in my case) balance for checking and credit-card accounts.

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