Why It Pays to Check Your Credit Card Balance, Even When You Think You Haven't Got One
By Tom Daniel Richardson
If you asked most people what their bank balance or credit card balance is they would be able to tell you (although whether they should is another matter!). I'm sure that you regularly check your current account balance; or other accounts where you regularly spend (if you don't, here's a virtual slapped wrist!). But what about the accounts you use infrequently, a credit card you rarely use for instance?
The trouble with an out-of-sight-but-in-your-mind way of managing your finances is that you can never account for the unexpected... like what if your card fell prey to a fraudster, or you are suddenly hit with a delayed transaction you thought had already gone through?
A regular check of all of your accounts, no matter how inactive you think they are is a very good habit to get into.
Sadly I suppose it's an uncomfortable fact that so long as there are people, there will be other people prepared to screw them over.
Checking your credit card balance to safeguard against fraud is well-trodden ground, for good reason. A regular, thorough check of your account is a good defense against fraud, even for the most innocuous of payments.
Indeed a lot of fraudsters take these small amounts first to gauge how well the account is monitored, before going back with a large amount later on, so don't be afraid to flag any transactions you don't recognise to your card provider.
When you hand over cash for goods or services, the transaction is instant. But when you pay by card it may not be so.
Recently I transferred the balance on my credit card to a brand spanking new 0% balance transfer deal card. So I called the new provider and arranged to transfer my exact balance onto the new card (I used the most up-to-date balance which I got from by looking online).
A couple of days later I logged in to online banking again to cancel the Direct Debit I'd set up for my old card (there was no balance on it, so I thought this would be fine). I don't know why (actually I do - it's an OCD thing. I always have to do it, I'm terrible checking that doors are locked as well), but I had to check my old credit card balance one last time before cancelling the Direct Debit.
To my surprise there was £0.59 outstanding. What did that come from? I knew I was transferring the balance so was careful not to spend on the card for the last few days leading up to the transfer...
It clicked. A week previous I had bought an app for my mobile phone, the payment must have taken a week to go through!
Had I cancelled my Direct Debit and not checked I would likely have got a charge for not paying my bill, which in turn would go onto my credit file. Because I have signed up to paperless billing I would have had nothing through the post to remind me... a lucky escape.
It may surprise you (it certainly surprised me) that there is no set timeframe for a merchant to take funds from your card. This surely flies in the face of logic as the merchant would want the money out of your account and into their own as soon as possible, wouldn't they? Reading around this subject though, there are instances of money being taken up to a year after the purchase was made...
As silly as this all is, it is a reason to check your account balance regularly. Of course you'll notice and be expecting when the big purchases come out of your account, but it's the little transactions that may get under your radar.
Make sure you make regular payments into your account. A Direct Debit is a good way of doing this (for a credit card you can generally set these up to either meet the minimum payment, or clear the balance in full each month). This is important, even for a Credit Card you believe has no balance.
Paperless Billing and Online Banking
It's great to eco friendly and go paperless, but beware the perils of paperless billing...When you have a posted statement come through your letterbox each month, you have a physical reminder to check your balance.
When you don't have a posted statement come through your letterbox, the onus is on you to remind yourself to check your balance (although you should normally get an email to remind you that your statement is ready - that is, if you check your email!).
Whether it's paper or paperless statements, or a good old fashioned jaunt down to your bank or building society, make it your business to check your account at least once a week to ensure everything is how you expect it to be. It is a pain granted, but not as much pain as missed payments, charges and a bad credit history.
You can check out the full range of 0% balance transfer credit cards at the Moneyfacts.co.uk Best Buy tables. Moneyfacts.co.uk is the leading independent financial information provider in the UK. Since 1988, we've been providing impartial information to financial services professionals which has helped thousands of customers get the best deal on their mortgages, savings accounts, credit cards, loans and other personal finance products.
http://www.moneyfacts.co.uk Limited is authorised and regulated by the Financial Services Authority (FSA).