Living with credit, Protecting yourself, Shopping

How credit card text alerts can curb overspending

Kelly Dilworth

Credit card text alerts aren’t just useful for catching fraud. These text alerts, as I’ve found in recent weeks, also can help you be more mindful of your money and combat overspending.

Each time I receive a text alert notifying me of a big charge to one of my credit cards I feel a twinge of pain, thinking about the money that will drain from my account. It makes the charges feel more costly, which, for me, is key.

Invisible payments, overspending and purchase alerts

Psychologists often say credit cards take the pain out of payment. The easier and more seamless a payment is, the less you have to think about the money you’re losing.

One of the reasons why I’ve had to deactivate one-click payments online and on my Kindle is because instant payments have a way of making me magically feel as if I’m not actually spending anything.

Paying with cash, by contrast, is literally painful, according to some research. As a result, people tend to spend less when they use cash than with credit.

Purchase alerts could potentially help counteract the tendency many people have to overspend with a card.

That’s been true, at least, for me.

Customize alerts to help you track charges

Many credit card issuers will let you customize your notifications so that you get a text message each time you charge above a certain amount (such as $20 or $100). You also may be able to receive notifications for every single purchase.

Receiving a high volume of purchase notifications can be useful if you’re aggressively trying to cut down your charges and want more accountability. However, it can also be annoying and lead you to ignore the messages altogether.

Some issuers also offer real-time text alerts that let you know instantly about a charge, but I prefer receiving alerts when I don’t expect them. The text alerts I receive are typically time delayed.  The surprise I feel when I answer a buzz on my phone and see how much I overspent is effective – especially when the text messages are cumulative.

Unless you ignore the texts entirely, it’s hard to escape feeling more connected with the money you’re spending.

Similarly, I’ve recently started receiving notifications via the financial app Trim for big checks that have cleared and automated payments.

The notifications have helped me be more aware of the automated charges I’ve set up – which is a problem that I’ve struggled with – and forced me to think about my cash flow.

How text alerts help me rein in spending

Ever since I started receiving alerts on my phone notifying me of large transactions (including big withdrawals from checks and automated payments) and significant deposits (such as my husband’s paycheck), I’ve become much more emotionally aware of our cash flow.

In many ways, tracking my finances via alerts on my phone has been more powerful than tracking spending through Quicken because I get a twinge of pain each time I receive an uncomfortable alert. With Quicken, by contrast, I can put off that uncomfortable feeling until it’s time to sit down and go over our expenses.

If you think purchase alerts would be helpful, think about your financial situation and message tolerance and choose an alert system that works for you.

The extra messages may not always feel good, but they could just be what you need to curb your spending.

See related: Why you should opt in for credit card issuer text alerts, Quick security alerts bring peace of mind, How cooler, shorter days can trim your spending

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