When you plan to make a large or expensive purchase on your credit or debit card, it’s a good idea to notify your bank in advance. There are several reasons why alerting your bank about upcoming large transactions can benefit you.
Why Notify Your Bank?
Here are some of the main reasons to contact your bank before making a big purchase:
- Avoid declines – Notifying your bank prevents them from declining a legitimate purchase due to suspected fraud.
- Remove spending limits – Banks often have default limits on purchases that can be temporarily lifted if you give them notice.
- Ensure sufficient funds – The bank can confirm you have enough available credit or account balance to cover the charge.
- Update contact info – Verifying current contact information prevents issues if the bank needs to reach you about the purchase.
- Travel notifications – If making the purchase during travel, the bank can be alerted to prevent false location-based declines.
Essentially, the notification helps the bank identify the upcoming charge as valid and authorized. This prevents headaches, stress or embarrassment if the transaction were to be unexpectedly blocked or declined at the point of sale.
What Transactions Require Notification?
There aren’t hard and fast rules about what dollar amount triggers a required bank notification. Every institution sets its own thresholds and requirements. However, the general guideline is to alert your bank about any charge that seems unusually large or out-of-character for your normal spending.
Some common examples of expensive purchases that often warrant bank notification include:
- Automobiles
- Furniture or appliances
- Electronics like TVs or computers
- Jewelry
- Large home repairs or renovations
- Wedding expenses
- Vacation packages
- Major medical procedures
Most experts recommend contacting your bank for any transaction over $500, but the exact amount can vary. For example, a $2,000 purchase might not be unusual for some cardholders, but could seem suspicious for someone who typically only charges small amounts.
When Should I Notify the Bank?
It’s best to alert your bank at least several business days in advance of making a large purchase. Many institutions ask for notice of five business days or more. This gives them sufficient time to update your account, adjust any limits, and add notes about the upcoming transaction.
Don’t wait until the last minute. If you walk into a car dealership or furniture showroom expecting to make a major purchase with your card the same day, the bank may not be able to accommodate the short notice. The earlier you can plan ahead and contact them, the better.
How to Notify Your Bank
The easiest ways to notify your bank of an upcoming large transaction include:
- Online banking message – Most banks allow you to send secure messages through your account login.
- Mobile app message – Banking apps also typically have messaging capabilities.
- Phone call – Speaking directly with a customer service representative allows them to make real-time notes.
- In-branch visit – Meet with a branch manager or banker in person to discuss your plans.
When you reach out to notify them, be ready to provide identifying details like your name, account number, the date and amount of the anticipated charge, the name of the merchant, and your contact information.
What Details Should I Include?
To avoid delays and make sure the bank has all the necessary information, include the following details in your notification:
- Your name and account number
- Date the charge will occur
- Exact purchase amount, if known
- Name and location of the merchant
- Type of purchase (i.e. furniture, appliance, auto)
- Indications of international transactions, if applicable
- Contact phone number and email address
The more details you can provide up front, the more effectively the bank can make a note and accommodate the transaction. Be as accurate and thorough as possible to avoid problems down the line.
What If I Don’t Notify the Bank?
If you fail to notify your bank in advance of a major credit or debit card purchase, a few complications could occur:
- The card issuer could decline the transaction as suspicious.
- Spending limits or caps on your account could prevent the charge from going through.
- An anti-fraud alert could temporarily freeze your account until you contact them.
- You may incur an overdraft fee if account funds are insufficient.
At the very least, an unauthorized decline causes embarrassment and forces you to use another form of payment. At worst, your purchase plans could be completely derailed. When in doubt, it’s always wise to give your bank a heads up.
Will Every Large Purchase Require Approval?
In most cases, the bank won’t force you to get approval for every major purchase. Notifying them simply allows their systems and staff to be aware the charge is valid and authorized. Think of it as alerting the bank to “whitelist” the upcoming transaction from your account.
However, banks have full discretion based on your account history and standing. They may sometimes ask for additional verification before very large purchases can proceed. Factors like past transaction disputes, overdrafts or fraud alerts could prompt the need for approval.
Is a Phone Call Really Necessary?
For simple notifications, a phone call is often unnecessary. Most banks allow you to message them securely through online banking or mobile apps. However, there are some situations where speaking to a bank representative directly can be helpful:
- You need details about account limits or restrictions
- Complex transaction details require discussion
- You have further questions or concerns
- Your account has past fraud issues
- Your purchase requires negotiating exceptions or limits
If you think a conversation would provide more clarity or enable bank staff to make more comprehensive account notes, a quick phone call can be prudent.
Can the Bank Refuse to Remove Limits?
Banks have full authority over your account restrictions and spending caps. While they will generally aim to accommodate a legitimate large purchase with proper notice, they can refuse to lift limits in some cases, including:
- You have a poor account history and credit score
- Your purchase seems suspicious or fraudulent
- You frequently dispute legitimate transactions
- Your account balance is low or often overdrawn
- You have past incidents of fraud
If your bank declines to authorize a major purchase, you may need to make alternative arrangements, improve your account standing over time, or split the total across multiple smaller transactions.
Should I Inform Multiple Banks?
If you plan to split the purchase across more than one credit or debit card, it’s wise to notify each issuing bank. Don’t assume that contacting only one institution is sufficient, as the others will still consider the charges abnormal for your normal spending.
To avoid any declines or temporary account freezes, communicate with every bank that will be involved. Confirm they are aware of the amounts they’ll see hit your accounts ahead of time.
Can My Bank Lower Limits Without Notice?
Banks can adjust your account limits at their discretion based on factors like your spending patterns and credit history. However, they should notify you if making a significant reduction to your maximum purchase abilities.
Check your cardholder agreements, as they likely indicate that the issuer can change limits but must inform you beforehand. If your bank suddenly lowers a limit without notice, preventing a major purchase unexpectedly, you may be able to negotiate a one-time exception by contacting them promptly.
Should I Notify for Everyday Purchases?
For routine, moderate-sized transactions, notifying your bank is unnecessary. Everyday purchases like groceries, gas, retail goods, meals, travel expenses, utilities, and similar do not require contacting the bank in advance.
Only alert them for transactions that seem unusual and abnormally high based on your regular spending habits and account history. Don’t waste their time and resources flagging everyday expenses.
Can the Bank Reject My Planned Purchase?
Even with proper advance notice, banks can still reject an upcoming transaction in certain cases, including:
- Suspected fraud
- Sudden account delinquency or closure
- Significantly lowered credit limits
- Unverified merchant or source
- Expired account
- Non-payment of minimum balance
Your notification allows the bank to prepare for a major legitimate purchase but doesn’t guarantee approval. Remember, they make the final authorization decision when the charge actually hits your account.
Conclusion
Notifying your bank before expensive purchases often prevents stressful declines or account freezes. While requirements vary between institutions, it’s smart to give them advance notice of charges over $500 or that seem abnormal for your regular spending. Most banks recommend five days’ notice via phone, in-branch visit, online banking portal, or mobile app. Provide detailed information to facilitate a smooth transaction. While the bank can occasionally still refuse large purchases, proactive communication allows them to authorize your legitimate major transactions seamlessly in most cases.