Credit Card limit your max amount if possible.
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I’m lucky that I have an excellent credit rating so much so that the credit card companies want to give me ridiculous credit limits.
Some years ago I was watching a tv show (20/20?) about identity theft which started with credit card theft. The victim recommended capping your credit card limits so that if a thief gets your credit card they can only spend $ instead of $$$, not that you’ll be responsible for the $ (in most cases) - but you do have to prove that it was not you by sending verified/notarized documents to each place a purchase was made.
She said that process was a complete pain, she would have to send the documents numerous times, etc. If the spending cap is lower, the idea is that it limits the number of places the thief can make purchases and then less work for you (there is also a cost of getting the documents and notarization).Do you really need a $50k spending limit a month? Even $10k? I have all of our credit cards set at $3k/month - except for the Visa that both my husband and I use, is set at $5k (because there’s that time frame between months that charges are there, but the payment for the previous month hasn’t been paid yet). (Yes, we charge everything, and I have it set so that all bills are paid in full, automatically every month - I track it all in Quicken.)
My recommendation, take the average of two months of spending on a particular credit card and call and have the card capped at a little more than that.
And really, do you want a thief being able to scam you for more than you would actually spend on yourself?!
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The limits of your responsibility in the event of fraud are capped.
https://www.nolo.com/legal-encyclopedia/unauthorized-credit-debit-card-charges-29654.html
There are times in your life where you may want to charge some large purchases, which might exceed the limits you have suggested. Some of my personal examples include (but are not limited to): funeral, home improvements, tuition (w/o surcharge). In the case of tuition, the total amount exceeded my credit limit so I had to sign up for an installment plan ($25 fee) so I could split up the payments into chunks that would fit under my credit limit. Of course, the cashback that I earned far exceeded the $25 fee.
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I don’t know how long ago that 20/20 episode was, but I can tell you from experience that it’s not that tough to deal with credit card fraud these days. I’ve been hit at least three times (BofA, Chevron, Chase) in the last decade and every case was nothing more than a phone call. My ML American Express was hit for almost $20k in one weekend and once their Fraud department got me on the phone, they canceled the card and quickly went over the charges to make sure they marked all the ones that were fraud. Then they fedex’d me a new card and a form that was already filled out saying that the following list of charges were fraud. All I had to do was sign it and send it back.
No big deal. So I don’t think there’s a good reason to cap your credit limit. The fraud departments are very good at identifying when there’s an issue and they are not going to make you work to prove it wasn’t you. Credit cards are someone else’s money until YOU spend it. Almost no risk.
Along those same lines, I don’t have a Visa debit card or anything that can spend my money without a PIN, and I only use my ATM card inside the bank.
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There are CCs I would like to keep my CLs over $20K since they come in handy for volume purchases of GCs online. Since the purchase limits of some merchants are way below than my CLs, I don’t have to cycle and just pay the full balance before statement cut. I know credit cycling and multiple payments each month are sensitive issues for some CCs so I avoid that with paying once a huge balance I’ve incurred for specific CCs.
I like the benefits of some cards like Citi and Discover where I can freeze them if I rarely use them; but for the rest, I just keep an eye on my accounts regularly. I know I am not responsible for unauthorized charges (IINM, the most that I will be responsible for is $50 and even this is waived if I report unauthorized charges immediately) so that I prefer to keep the high CLs that I have.
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Sorry, but I don’t think this makes sense. It’s very easy to notify cc companies about fraudulent transactions and get them removed. Further, lowering your CL to little more than your usual spending means your utilization percentage is very high.
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@mom2jel said in Credit Card limit your max amount if possible.:
but you do have to prove that it was not you by sending verified/notarized documents to each place a purchase was made.
No, you don’t. You just handle it via the credit card companies.
At FWF, there were several of us who had our Fidelity VISA’s compromised with multiple purchases to places we’d never heard of. FIA Card services took care of it all.
In May of this year, some of us had our Fidelity VISA’s compromised again, with a single charge of several thousand dollars in each case, I think. Mine was hit with a $5000 charge for some charity I’d never heard of. Elan took care of it.
I didn’t have to send in any written verification at all. I disputed the charges over the phone. Even if a bank wanted something in writing, notarized, that’s only one piece of paper sent to the credit card company. You don’t have to prove anything to the merchants. (Yeah, like I’d wait to voluntarily get credited from them?)
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@mom2jel While I disagree with your suggestion on the credit limit, I will admit that our cards’ cash advance limits are much lower than the bank initially set. In over 30 years, I’ve never used a cc cash advance, so am okay with them being set low.
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Depending upon how much you lower it down to, bad idea. One of the things that your credit score gets affected by is “utilization”. So if you reduce the credit limit too much, your utilization is way too high. Just to give you a flavor of the type of impact, I prepaid 19K in taxes with a credit card with a limit of 20K. My credit score dipped from 830 down to 760. Not a huge deal since it will clear up as the payment gets posted but if you reduce the credit limit, you may have a permanent hit.
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Yes, we charge everything, and I have it set so that all bills are paid in full, automatically every month - I track it all in Quicken.
I hope people will get over this fascination/addiction to tracking things in Quicken - what purpose does it serve? I charge everything, I forward pay my bills, the credit card companies auto magically withdraw their payments from my brokerage account which can never be overdrawn. Periodically, I will glance at my monthly transactions to make sure I recognize something - but other than that, everything is on auto pilot with no tracking. For that matter, what is quicken?
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if you have an “excellent credit rating” the CC company will normally be on your side first with any dispute in my experience, and you might be liable for the first $50, but i have never been held to that and my CC number has been stolen a few times over the past several years
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@skh12 said in Credit Card limit your max amount if possible.:
you might be liable for the first $50
That used to be in the standard terms, pre-Internet days, when crooks actually had to steal the physical card or steal the carbon copies out of the trash, etc. Remember when cashiers had to run the credit card on a tiny machine at the register and fill it out manually? They’d ask you if you wanted your carbons and that was considered a standard measure to protect yourself.
Per the FTC:
“Credit Card Loss or Fraudulent Charges
Under the FCBA, your liability for unauthorized use of your credit card tops out at $50. However, if you report the loss before your credit card is used, the FCBA says you are not responsible for any charges you didn’t authorize. If your credit card number is stolen, but not the card, you are not liable for unauthorized use.”https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards
Some issuers won’t hold the customer responsible for fraud at all. Discover’s policy is as follows:
“Discover’s $0 Fraud Liability Guarantee means you’re never responsible for unauthorized purchases on your Discover Card account.”
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@principalmember said in Credit Card limit your max amount if possible.:
Yes, we charge everything, and I have it set so that all bills are paid in full, automatically every month - I track it all in Quicken.
I hope people will get over this fascination/addiction to tracking things in Quicken - what purpose does it serve? I charge everything, I forward pay my bills, the credit card companies auto magically withdraw their payments from my brokerage account which can never be overdrawn. Periodically, I will glance at my monthly transactions to make sure I recognize something - but other than that, everything is on auto pilot with no tracking. For that matter, what is quicken?
I don’t use Quicken, but I do export transactions to CSV files every couple months and keep them all in a massive excel workbook. That way, when I need to find a transaction I can just filter/search for it and find out which credit card I made the purchase with. This is something that would also be possible if I used Quicken, so there is some benefit, even if only used as an aggregator. The other functions of Quicken may be helpful to some as well. It’s nice to be able to determine how much you spend at particular merchants or in particular categories. I’ve tried Quicken and Mint, but they just get things wrong too often that it makes it not worth it, not to mention the fact that they still seem to be unable to match up transfers to/from accounts. But if Quicken worked well without any extra effort from me in recategorizing, etc. I’d use it.
