If you are traveling for the holidays, you might have to let your bank know where you are headed.
But this year, rather than call and set a travel alert, your bank may want you to do something a little different. Banks are increasingly asking you to share your location through your smartphone.
That might seem creepy, even for an institution you trust. You will need to decide if the benefits of sharing outweigh the perceived cost of what you're giving up.
By sharing your location with your banking app, the bank can sync where your phone is with where your card is. When an unauthorized charge is made in a location different from the one you are sharing, the bank can decline the charge.
U.S. Bank recently rolled out location-based monitoring for all of its debit and credit cards, said Dominic Venturo, chief innovation officer at the Minneapolis-based bank. The app is recording only your general location, he said.
Credit Human Federal Credit Union in San Antonio allows its members various types of card controls through a separate app, including location-based restrictions. For example, users can set their cards to be accepted only within a mile radius of their mobile phones.
When you are about to swipe your card for tapas in Barcelona, how does the bank know it's you and not a credit card thief? One way is to tell your bank that you will be traveling.
Most banks suggest you set up a travel alert by contacting the bank so that your purchases in a city you are visiting aren't declined. But that involves work; ostensibly, it's easier to share your location with your banking app and let your bank do the work.
To make the experience seamless, Venturo said, it's best to share your location always, rather than just when you are using the app. If you have to pull out your phone, open your app and let it gather your location, you might as well have put a travel notice on your account.
But Venturo understands the trepidation. If customers are uneasy, they can turn off the tracking and tell the bank when they are traveling.
The average cost of an out-of-network ATM withdrawal was $4.69, according to Bankrate's 2017 checking account survey. Obviously, the easiest way to avoid that fee is to use your bank's ATMs, but you might not know where one is. Letting your bank have access to your location, even momentarily, could quickly tell you where the nearest ATMs are.
In general, privacy experts said that if there is anything you are going to trust with your location data, it's where you keep your checking or savings accounts.
Albert Gidari, the director of privacy for the Center for Internet & Society at Stanford Law School, agreed that most of the bank's efforts with geolocation are "innocuous." But he added that the always-on function seems excessive. After all, is calling your bank to tell it you are traveling that much of an inconvenience?
"If this is just for the occasional trip abroad, well, that's a lot of continuous data flow for very little benefit to the user," Gidari said. "Perhaps they are discarding the location information otherwise — hard for me to see the business case here unless you are trying to build a location profile of your customer base."
Robert Barba writes for Bankrate.com.
