Wallet Hacks

Save Money & Prevent Fraud with a Credit Card Reset

There was a four week period where I lost my credit card twice. The first time was when I misplaced my wallet, putting it in a strange part of the car when I went to the gym, for a few days. The second time I lost just the card after paying for something in a restaurant.

A funny thing happened… I started getting emails from services about how my card was invalid and I couldn't be billed for services. Oh no!

Then I realized — I didn't want some of those services anymore!

That's when it dawned on me… I should really do this more often! Why not “lose” my credit every 12 months to reset all my recurring subscriptions?

Enter – the Credit Card Reset.

What is a Credit Card Reset?

It's when you “lose” your credit card so that all automatic payments get suspended. 🙂

The credit card company sends you a new card and now you need to go back and update all your accounts. You must manually log into the accounts, update the card information and re-activate.

To do this, just call your credit card company and report your card lost or stolen. They will confirm the last few transactions are yours and then issue you a new card.

If you don't have a backup card to use for the next few days, you can request that they rush the card to you because it's your “every day card.” (those are magic words, use them) Make sure there is no charge for the rush delivery, there usually isn't but confirm.

Why should I do this?

I haven't convinced you yet huh?

You execute nearly every credit card frugality trick with one phone call.

Research has shown that barriers inhibit behavior. If you have to enter in your credit card information to checkout, you're less likely to check out. To help save money, don't save credit card information with any merchants. A credit card reset invalidates all that information at every merchant in one phone call.

It helps reduce fraud. Not only will this save you money by creating a roadblock, you reduce the chance of fraud. How many forgotten accounts do you have at smaller merchants? How many have your credit card information? When you perform the reset, the answer is “none of them have my credit card information, even the ones I don't remember I had.”

This also will invalidate any stored credit card data at brick and mortar stores. Remember the hacks of TJ Maxx and Home Depot (and a million other places) — well now they have invalid credit card data they can't use. Boom. You win.

It automatically cancels services, requiring you to re-activate them. Negative option billing is when a customer agrees to have products/services sent to them and billed later, like Columbia House and their music CDs back in the day. Many services work in a similar way, you get your Netflix subscription and you keep getting billed until you explicitly cancel it. Netflix makes it easy to cancel but not every company does. A credit card reset makes them all easy to cancel. 🙂

If you signed a contract, you are still responsible for paying the merchant even if you cancel the card. Netflix has no contract so when your card becomes invalid, they will send you email reminders until you enter your new card information or they shut off service. So if you have a Verizon bill, don't think cancelling the card during an active contract will do anything for you!

What else should I know?

If you use services like Personal Capital (check our review) or Mint, you may need to update those to get accurate spending information. Otherwise, you're all set!

Have you done a voluntary (or involuntary!) Credit Card Reset lately?