Credit card locks: How setting automatic limits on your credit card spending helps you save
Credit card lock is an option that lets you freeze your card without cancelling it
Dubai: A card lock is a feature that allows you to lock or freeze your credit card account for a certain period of time. Many people use card locks to prevent themselves or others from making purchases.
“Locking a credit card is quick and easy, and most credit card issuers allow you to manage your card locks through your online account or credit card app,” explained Rupesh Naish, a credit and debt consultant based in Dubai.
Is it wise to lock your credit card?
A credit card lock can help keep your credit card account safe from fraud.
“If you suspect that your credit card has been compromised, a card lock is one way to keep third parties from making purchases on your account — though you’ll probably also want to contact your issuer to report credit card fraud and request a new card,” added Naish.
“You can also freeze your credit card account if you accidentally misplace your credit card — especially if you think you’ll be able to find your credit card in a day or two.” So in other words, a card lock can protect your account until you decide whether your credit card is gone for good.
Locking a credit card is quick and easy, and most credit card issuers allow you to manage your card locks through your online account or credit card app
Which transactions are locked?
When you lock a card, new charges and cash advances will be denied. However, recurring auto payments, as mentioned above, will continue to go through. Typically, so will bank fees, returns, credits, interest and rewards. Transactions that occurred before locking the card are unaffected.
“Check with your issuer or its website to determine whether you have card lock and exactly how yours works, because locks work differently depending on the card issuer,” advised Abu Dhabi-based independent credit consultant Rajesh Markara.
“For example, if the card is associated with a smartphone mobile payment app, such as Apple Pay, that may continue to work on a locked account. And cards differ on whether they allow balance transfers to go through when a card is locked.”
Generally, a lock affects all cards with the same credit card number, which might affect authorised users of the card. While some card locks or freezes remain until you unlock or thaw them, other locks expire. For example, an American Express freeze expires in seven days.
How credit card locks help curb spending
Experts also recommend locking your credit card account as an aid to prevent you from making new purchases on the card.
“If you are trying to curb impulse shopping or stay out of credit card debt, locking your credit card can help you refrain from making purchases you might later regret,” Naish noted.
Since most credit card locks allow recurring transactions like subscriptions to go through, you can also use a card lock as a way to keep an old credit card account active.
“Closing an old credit card can hurt your credit score, so consider putting one or two subscriptions on the card, setting up auto-pay to ensure that you don’t fall behind on your payments and locking your card to prevent yourself (or anyone else) from making new purchases on the account,” added Markara.
To initiate an immediate lock or to cancel a lock, use your card issuer's mobile app or log in to your online account to activate an on-off switch. Many debit card accounts also feature a lock.
When all does credit card locks not help?
There are several instances when freezing may not be enough to save your card info, here are three such examples:
• Your credit card info has leaked online
If your credit card information has been leaked online, it’s possible that thieves will attempt to use it multiple times before it expires. That’s a good time to cut your losses and get a totally new card number.
• Your card is in the hands of someone you distrust
Similarly, if your card info has fallen into the hands you don’t trust, and especially if they know you froze it, they may just be waiting for it to unfreeze. It might be then time to cancel your card, not just lock it.
• You’re still getting fraudulent charges after you unfreeze
This ties into bullets one and two, but if you unfreeze your card and still get bombarded with fraudulent charges, that’s definitely a sign that your card info is compromised.
If you are trying to curb impulse shopping or stay out of credit card debt, locking your credit card can help you refrain from making purchases you might later regret
Bottom line?
While locking a credit card prevents anyone from making new purchases on your credit card, you can also use credit card locks to keep your account safe, prevent impulse shopping or stick to a monthly budget.
In most cases, getting a card lock in place only stops new purchases. If you want to set or lift a credit card freeze, log into your online credit card account or use your credit card issuer’s mobile app.
You could lock all your credit cards and unlock them each time you make a purchase. That short delay fiddling with your phone might provide a cooling-off period during which you decide against an impulse purchase.
“If you designate a card for use with auto-pay only, you might as well lock it because recurring charges will still go through,” added Naish. “Further, if you use only one card regularly, you could lock all others as a precaution.”
To put it simply, credit card locks takes the majority stress out of losing your card, provides an instant layer of security, and can even help you manage your finances — all with a simple toggle.