When used properly, a credit card is a great way to overcome short-term cash crunches, build up your credit score, and even give you some rewards for your regular spending. But credit cards come with additional hassles that can trip up your financial goals. Forgetting a payment, overspending, or even identity theft can lead to a financial mess. The good news is that credit card companies these days want to help you avoid these problems as much as you do. Automated notifications from your credit card issuer can keep you on track. If you haven’t already, turn these alerts on, stat!
1. Payment due reminder
The biggest component of your credit score is your payment history (35 percent of your score). It makes absolute sense: When evaluating your credit application for a mortgage or car loan, the first thing that any lender wants to know is whether or not you’ve paid your other accounts on time. A payment due reminder helps you to never miss a monthly payment, especially if you don’t use auto-pay for your bill. Remember that a good track record on your monthly credit card payments will boost your score over time and help you avoid late fees and APR penalties.
2. Payment received
This alert confirms that your credit card company received your payment, giving you peace of mind. When rebuilding your credit score or trying to qualify for a loan, knowing that your payment is checked off for the month provides you a much needed sense of relief and accomplishment, which can help you keep working toward your financial goals.
This can also help if you have an authorized user who is supposed to pay for their own charges, for example your teenager. (See also: 5 Simple Ways to Never Make a Late Credit Card Payment)
3. Single transaction
The second largest component of a credit score is the amounts owed on accounts (30 percent of your score). While owing money on your credit card doesn’t necessarily lower your score, lenders like to see a lower credit utilization rate. Credit reporting bureaus suggest keeping your credit utilization ratio below 30 percent to gain credit points faster.
A single transaction notification alerts you if your account has been charged a single purchase amount that would put your account over that 30 percent threshold. If you already have a set monthly budget of credit card expenses, set this alert to remind yourself that you need to stop making additional charges and focus on reducing your card’s current balance.
4. Approaching credit limit
Avoid going over your credit limit by knowing when your available credit is less than a certain amount. This alert is useful in a few different ways:
While a credit card isn’t ideal for emergency expenses, knowing how much of your balance is available can reassure you that you could cover a sudden emergency room visit or car breakdown if you had to. (See also: How to Use a Credit Card for an Emergency Without Drowning In Debt)
This helps you keep tabs on that 30 percent credit utilization ratio and work toward getting back on track.
It can serve as a reminder that you’ve reached or exceeded your allotted monthly budget and can’t spend for the rest of the month.
5. Daily usage
This alert watches for too many transactions and lets you know if the number goes over a set limit. A daily usage alert is a friendly nudge that keeps you in check and encourages you to watch your expenses more tightly. Perhaps it’s time to make more payments in cash. Paying with cash increases the “pain” of making a payment, which in turn decreases your chances of overspending and can boost your satisfaction with your purchase.
Receiving a daily usage alert too often can also serve as red flag that you may have to turn to more drastic measures to rein back credit card usage. (See also: A Guaranteed Way to Avoid Impulse Credit Card Purchases)
6. Suspicious activity
Data breaches are increasing every year. According to data from the Identity Theft Resource Center, the number of U.S. data breaches through June 30, 2017 recorded a half-year record of 791 and was on track to reach an all-time high of 1,500 by end of this year. Many of the targets of these breaches are companies holding your credit card information.
Getting a notification about potentially fraudulent activity on your account is a great way to stop thieves in their tracks. Since some thieves first test your card with a small amount that is likely to go unnoticed, getting that notification of suspicious activity allows you to quickly take action and address the potential threat. (See also: 3 Sneaky Ways Identity Thieves Can Access Your Data)
7. Weekly snapshot
If you don’t use your credit card that often, a weekly snapshot alert may be sufficient. Check if your credit card issuer offers a notification that sends you a weekly summary of charges, payments, and other information. This way you’ll stay on top of your credit card account regularly without having to think about it.
8. Online statement available
This alert lets you know as soon as your online statement is ready to view. It’s a good habit to check your monthly credit card activity to ensure there are no erroneous charges.
This notification is particularly useful for business owners who use their credit card statements for bookkeeping and reconciling financial statements. Whether you complete these task yourself or have an accountant, you’ll know it’s time to get working on crunching those numbers. (See also: 12 Habits of Highly Responsible Credit Card Users)
9. Credit score changed
As stated at the beginning, proper use of a credit card is a means to build up your credit score. So, of course you’ll want to know when your credit score changes. Many lenders offer their customers free credit scores, so if your credit card issuer does, consider signing up for a credit score update. Contact your credit card company and find out the process for setting up notifications. Depending on the company, you may be able to get alerts via email, text message, or in-app push notifications. Select the notifications that make the most sense to your unique financial situation and will help you achieve your financial goals.
Just make sure that the reported credit score is the one that the lender of your mortgage, car loan, or other type of financing actually uses. (See also: FICO or FAKO: Are Free Credit Scores From Credit Cards the Real Thing?)