My buddy Keith sent me a message this week about an odd $46 Taco Bell transaction on his daughter’s prepaid card:
Definitely stolen. [The card was lifted from her backpack.]
I’ll have her fill out the form.
On the plus side, had we not had text alerts on the purchases, it would have been A LOT worse.
Seeing the alert, they wisely locked the card. We can only hope all those tacos gave the thief a nasty case of Montezuma’s revenge.
Meanwhile, Keith is teaching his daughter a valuable personal finance habit: turn on activity alerts for your financial accounts.
I was disappointed to find Keith is in the minority of parents on our family finance site. Only 12.7% of the cards with purchase activity in the last 30 days have alerts turned on.
Why should they? Five good reasons:
- Nip fraud at the bud. As we learned with the taco fraudster story above, you’ll catch sketchy activity right away. Then you can lock your card to prevent further damage and order a replacement.
- Stay on budget. A good prepaid or bank debit card activity alert will report not only the amount and merchant in real-time, but also the remaining balance. Knowing your dwindling balance after each and every purchase makes spending more mindful and easier to resist. It’s a simple yet effective budgeting tool.
- Peace of mind. Once your kids head away for school, they may not communicate with you as much any more. Mine didn’t. Hey, they were busy! Card activity alerts are a simple way to know your kids are safe and sound without bugging them.
- Cancel forgotten or unused services. Still being billed for that online game you stopped using (or enjoying) a while back? You’ll be automatically reminded every month until you cancel.
- Deliver Just-In-Time advice. “You just paid how much for what?” Your kid is going to make some rookie purchase mistakes. Alerts shared with parents provide an opportunity to deliver some sage personal finance wisdom in the moment while the incident is still fresh. An ATM withdrawal alert for $22.00 instead of $20.00? That’s a $2.00 fee right there. Let your kid know there’s a free ATM down the block. Save a couple bucks next time. Just keep it positive. Mistakes are an essential part of the learning process.
Of the 12.7% of cards with activity alerts enabled, almost half (46%) are sharing the alerts with parents. That’s a good thing if it leads to thoughtful conversation and coaching. Not so much if becomes another form of nagging. Stay mindful of the difference for best results.
Sure, card activity alerts can notify you about fraudulent taco purchases. But, more importantly, they’re part of the whole enchilada when it comes to teaching your kids about personal finance.
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