Tips for Making Safe Credit Card Purchases Online

In today’s digital age, you need to be especially careful when making online purchases

With online shopping becoming the norm, people have also become more susceptible to identity theft. It’s imperative that you be careful and mindful of how you shop online.

A November 2016 article in The Balance by contributor LaToya Irby outlines seven tips for safe online shopping:

Conduct your online shopping only on websites you trust
It may sound obvious, but using your credit card to make online purchases only on those websites you know and trust could save you from becoming a victim of fraud. Never click on links provided via email; instead, type the entire URL of the website into your browser to open the site.

Never shop from a public place
Public computers are susceptible to hacker technology, such as software that captures your keystrokes and retains your personal and credit card information. Additionally, public Wi-Fi is unsecured and, as such, could redirect your device to a fake internet connection that an identity thief can monitor and use to intercept your personal information.

Keep your devices protected from viruses
Always stay up to date with virus and spyware protection software, and make sure you are using antivirus software that is reputable, not the type for which you receive an ad via email or in a pop-up window.

Check with the BBB first
The Better Business Bureau marks websites with poor customer service records, so make sure to check out the credibility of the site in question using the BBB before making a purchase.

Use credit cards, not debit cards
Credit cards have better protection services against fraud than debit cards, so you’re liable for fewer fraudulent charges if they occur. Additionally, you could lose access to your account and your funds while the financial institution sorts out a debit card that has been compromised, whereas with a credit card the only access that’s affected is that line of credit.

Make sure the website you use is secured
Always look for the green lock symbol at the start of your URL browser, and make sure you type in the website using “https” to ensure the site is secured to encrypt your information when making online purchases.

Keep track of your purchases with receipts
Just as with in-store purchases, printing a copy of the receipt of your online transaction will help you track your credit card activity. Use the printed copy to compare against your monthly credit card statement and watch for fraud.

In a November 2016 article in the Better Business Bureau by APR, CFEE Janet C. Hart recommends checking both your credit card activity and your bank account activity once a week, rather than waiting for the monthly statement. This ensures you catch fraudulent activity shortly after it’s occurred instead of finding out weeks later.

Hart also advises that we be wary of phishing scams—emails seemingly from a business claiming an error with your order or your account and asking you to confirm personal and identifying information. Legitimate businesses do not send these types of emails.

“Beware of ‘GREAT’ deals — if you find a website offering deals that seem too good to be true, they probably are. You may get a knock-off product, a product that is not the brand you ordered, or you may get nothing at all,” adds Hart.

Lastly, Hart recommends always checking the website’s privacy policy before making purchases online, so you know exactly how your personal information will be used.

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Personal Loans Versus Credit Cards

Advantages and drawbacks of each type of lending

Personal loans andCardsVsLoans_Featured credit cards, should they be used intelligently, can be great ways to finance your wants and needs. As personal finance author Greg McFarlane writes on Investopedia.com, credit in general grants us temporary access to other people’s money, and for a time, it is a win-win for all parties.

“The lenders get interest, the borrowers get leverage and the economy grows. What’s not to love?” he said. “Without credit, capitalism would stagnate.”

But which lending method is better: personal loans or credit cards? Let’s look at some of the high points and low points of each.

Personal loans
This type of credit is unsecured, meaning there is no collateral involved. Because this is a higher risk for the lender, as there is nothing of which they can take possession in the event of default, interest rates are fairly high. And because you will have a balance to be paid from day one, you are paying that interest starting the moment you sign on the dotted line. Still, these interest rates are typically lower than those of most consumer credit cards, giving personal loans an advantage there.

Another advantage of a loan is that it comes with a set term during which you will be repaying it, and a set amount to pay, which helps with budgeting. At the same time, credit card terms are either longer or unspecified, allowing for lower, although inconsistent, payment amounts.

“Many personal loans have a payback period of no longer than 60 months, or five years. Credit cards tend to amortize your payment over eight to 10 years, resulting in a lower payment over a longer time,” said debt adviser Steve Bucci of Bankrate.com.

Credit cards
While credit cards do come with inherently high rates — so high, in fact, that the president and Congress had to artificially cap those rates from outside the free market — for the first month after you purchase something on the card, you are technically getting a zero percent interest rate, McFarlane says.

“Should you choose to take 30 days or longer to pay for an item you bought on a credit card? Well, that’s when you’re failing to take advantage of the inherent benefit of the method of payment,” he explains.

Furthermore, credit card companies often offer a grace period for payments. That means you have more than a month to come up with enough money to pay off your balance and avoid being charged interest — that’s at least two pay periods to gather your own money and use it to pay off the money you borrowed.

Also, not having to wait for paperwork approval when you need or want the money, as you do with loans, is yet another way your credit card acts just like cash (except in plastic form).

Exceptions to these details exist when you are talking about business loans or credit cards, or about personal loans obtained for use of credit card consolidation. Regardless of how you are using your means of credit, make sure you are looking carefully at the terms of the agreement. Let us help you choose the method that best suits your needs, and then take full advantage of its benefits.

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Watch Out for This Chip Card Scam

Make sure you don’t fall victim to this chip card scam

The country isCreditScam_Featured progressing quickly on the path to replacing magnetic strip swipe cards with new, more secure chip cards. The switch to chip cards marks an effort to improve security and prevent fraud and identity theft.

The move to embrace this technology, which is already the standard in many other countries, was partially motivated by the highly publicized security breaches at several major retailers over the past few years. While the move to chip cards will improve security overall, there are some scammers who are trying to take advantage of the temporary confusion during the switch.

Last October marked the deadline for retailers to update their point-of-sale systems so that they could read the new chip cards. Any retailers that didn’t meet that deadline were at risk of being held liable for fraudulent transactions that may have been prevented with the new chip card systems.

“The new cards provide more security because the microchip creates a unique code for each use to help authenticate a transaction,” according to Kathryn Vasel of CNN Money. “Older cards store that payment data in the magnetic strip on the back, which is easy to steal, replicate and put on fake cards.”

As retailers across the country switched over, financial institutions began sending out new cards. During this time, a new identity theft scam arose. The scammers pose as financial institutions and send emails in an attempt to collect valuable personal information. They sometimes ask people to confirm or provide updated personal information so that a new card can be sent.

Other times, they provide a link that they claim will take people to their financial institution’s website so they can start the process of getting a new card. Unfortunately, these sites are used to gather information that can be used for identity theft. Even if you don’t input any information, just clicking the link can cause problems.

“If you click on the link, you may unknowingly install malware on your device,” according to Colleen Tressler, a consumer education specialist with the Federal Trade Commission. “Malware programs can cause your device to crash, monitor your online activity, send spam, steal personal information and commit fraud.”

You can avoid these scams by keeping in mind that your financial institution will never ask you for personal information over email or the phone. If you receive a call asking for information, hang up and call back yourself, using the number provided on the back of your card. You may have to give your account number over the phone when you call, but since you typed in the number yourself, you know the correct people are hearing it.

Likewise, do not respond to emails with any personal information. If you think you may have a legitimate email from your financial institution, it is important to close the email and navigate to the financial institution’s website from a new browser. That way, you know you are going to the correct URL — one that you type in yourself — and not risking a link that redirects to a scammer’s site. You should also check that the website you are on is secure before putting in any information. If you can’t find the page that the link referred to, you can call your financial institution to confirm the email was legitimate before you use the link.

If you keep this information in mind and remember that it is always better to play it safe and take the extra step to ensure that your communications are with your actual financial institution, then you can stay safe from this chip card scam.

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Tips for Building Your Credit Score

If your credit score could use a boost, read these foolproof tips

There’s a certain three-digitCreditScore_Featured number that can make all the difference between being denied or approved for credit, and whether you’ll receive a low or high interest rate. That number is called a credit score, and it’s derived from your payment history, accounts owed, length of credit history, types of credit used and other factors.

Many of the credit-related decisions you make can have an impact on your credit score. For example, skipping a payment on a credit card bill can have a negative impact on your score. Your credit score defines you financially, and if you do something to negatively impact it, you could face a risky financial future with poor credit.

“A low score warns lenders that you might be an unreliable borrower, which can thwart you from getting the credit you need,” writes Credit Karma contributor Jenna Lee. “A high credit score can save you tens of thousands of dollars in interest over the life of your loans.”

So how can you build up your score in the unfortunate event it’s not where you’d hoped? Read on for expert advice on improving your credit score.

Get rid of small balances on several cards. “A good way to improve your score is to eliminate nuisance balances,” says John Ulzheimer, president of consumer education at Credit Sesame. “That way, you’re not polluting your credit report with a lot of balances.”

Since your credit score takes into account how many of your cards have balances, charging a few dollars on one card and then a few on another, instead of using the same card to make multiple purchases, can negatively impact your credit score. To build your score up again, pay off all the small balances you have on your cards, and then use just one or two cards for the majority of your everyday purchases.

Pay bills on time. If you’re skipping payments or paying them late, your credit will suffer. If you’re struggling to pay bills by their deadlines, try setting reminders on your smartphone or leaving sticky notes on your desk with the payment information and deadline for all your bills. Or hire a financial planner to help you get organized, which will help with paying bills on time.

“It isn’t necessarily hard — it just takes discipline,” says Hitha Prabhakar, a retail and consumer analyst and spokesperson for Mint.com.

Keep old debt. It sounds counterintuitive, but it’s actually better for your credit score if you leave old debt on your report. Some of that debt is good for your score, and trying to get older accounts off your credit score simply due to the fact that they’re paid off isn’t wise either.

Why? The longer your history of good debt, the better it is for your credit score. When you attempt to eliminate old good debt, it’s like getting great grades throughout school and trying to get your records erased down the line. You want to keep it around.

Get rid of student loans. If feasible, try to pay off those pesky student loans in a timely manner.

“If you pay your student loans in full and on time each month, the credit bureaus will make a record of that on a continuing 30-day basis,” writes contributor for NerdWallet Divya Raghavan. “And that will demonstrate to future lenders that you can be trusted to handle money responsibly.”

Keep new accounts to a minimum. Every time you open a regular or retail credit card, or even just apply for one, your report is looked at to determine whether or not you’ll receive the credit.

“Since a lot of hard inquiries may make it look like you’re desperate or aren’t getting approved for credit, it’s best to minimize how often you apply for more credit,” says Lee.

“You just don’t want to do anything that would indicate risk,” explains Dave Jones, retired president of the Association of Independent Consumer Credit Counseling Agencies.

Your credit score is an important part of your financial success. As an AOFCU member, you are entitled to a FREE Credit Score Analysis. We can offer a comprehensive list of actions you can do based on your credit report to help you raise your credit score.
Ask for your FREE CSA today!

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EMV Credit Cards

Facts about the new trend in credit cards
If you’ve been lookingEMV_Featured_052615 into getting a new credit card lately, you may have heard the term EMV credit card and wondered what it meant. This new trend has been gaining popularity in the United States over the past few years, but it is already firmly established internationally. The following information can help you understand the basics of EMV credit cards and how they can benefit you.

EMV stands for Europay, MasterCard and Visa. They are sometimes known as chip-cards because a small metal square – the chip – is visible on the outside of the card. Although it is fairly new to the U.S., it is considered the global standard in security for credit cards around the world. The term refers both to the computer chip equipped credit cards and the technology that works with the cards to authenticate them. This advanced technology gives chip card transactions a higher level of security than traditional cards.

EMV cards have become more popular in the U.S. because of the highly public and damaging security breaches that have occurred in recent years. With hackers gaining access to tremendous credit card databases from businesses thought to be very secure, financial institutions and businesses knew that a change was necessary. Now, people using EMV chip cards have an added layer of security both in the U.S. and when traveling abroad.

Traditional credit cards have a magnetic strip that contains all of its important data. Hackers attempt to access that data to gain the information about both the card and the cardholder necessary to commit fraud. With this information, purchases can be made that make the data as valuable as cash to anyone who knows how to steal it. The information on the magnetic strip never changes, so it can be repeated many times on any number of purchases.

The reason why EMV cards are considered more secure is because the information contained on the chip is only useful for a single payment. Each time an EMV card is used to purchase something, a unique transaction code is created, and that code can’t be used again.

In order to keep up with this change, consumers will have to obtain these cards and learn the specific technique for using them. Businesses and financial institutions will also have to adjust by outfitting their facilities with new technology, including processing systems. They will also have to change policies to keep up with new liability regulations.

“EMV technology will not prevent data breaches from occurring, but it will make it much harder for criminals to successfully profit from what they steal,” states Sienna Kossman from FoxBusiness.com.

Fox Business spoke with several experts about this technology, including Julie Conroy, the research director at Aite Group.

“Experts hope it will help significantly reduce fraud in the U.S., which has doubled in the past seven years as criminals have shied away from countries that already have transitioned to EMV cards, Conroy says,” according to Fox Business.

The way that these cards are used is different from a magnetic strip card. It also takes longer for the data to be transmitted and the transaction to be authenticated.

“Instead of going to a register and swiping your card, you are going to do what is called ‘card dipping’ instead, which means inserting your card into a terminal slot and waiting for it to process,” stated Conroy.

A second method of using an EMV card makes use of near field communication (NFC). Cards equipped with NFC technology just need to be tapped against a scanner, which can read the data. This is similar to the system that many people are familiar with using on public transportation in the country’s major cities.

“Contactless transactions are more consumer-friendly because you just have to tap,” according to Martin Ferenczi, the president of EMV provider Oberthur Technologies. ”Around the world, there is a move to make EMV cards dual-interface, which means contact and contactless. However, in the U.S., most financial institutions are issuing contact cards.”

This is due to the fact that dual scanners are expensive, so businesses are waiting until EMV cards become more widespread.

Some cards are known as chip-and-PIN because they require a pin number to be entered, just like with a traditional debit card. There are also chip-and-signature cards, which will likely be more popular than the PIN variety in the coming years.

This new trend is a great thing for both consumers who want to keep their money safe and businesses that want to protect their customers and their reputation.

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Five Reasons to Avoid Retail Credit Cards

How good of a deal is a store credit card?
You’re at the checkout at yourAvoid Retail Credit Cards! favorite retail store, when suddenly you’re offered a 10 percent or 15 percent discount on what you’re buying in exchange for opening a store credit card. Sound familiar? If this has ever happened to you, then you might’ve been tempted by all the advantages the store will make it sound like the card will bring, such as promotions, discounts, as well as other perks.

While it may sound tempting, don’t be swayed. Yes, there can be many advantages of having a store card, but many times, there can be just as many drawbacks, too. Consider the following cons before signing up for a retail credit card:

1. Low limits
More often than not, retail credit cards start you out with a low credit limit (especially if your credit is poor). And if your limit is only $100 to $1,000, the purchases you make could easily put you at a higher credit utilization (your purchasing power amount) than what’s beneficial for your credit. So for example, if you have a credit utilization of more than 20 percent, a credit card with a $100 limit means you shouldn’t buy more than $20 worth of items — and that’s not very useful.

2. High interest rates
With rates usually around 20 to 30 percent, if you’re likely to revolve balances, it can become extremely pricey if you don’t pay off what you owe at the end of your grace period. In fact, in some cases, people end up paying double or more of their initial purchase. So even with that discount offered at the beginning of use, it still isn’t worth it financially.

“The key, as with any credit card, is to pay it off each month, so that interest rate is moot,” says Matt Schulz, senior industry analyst of CreditCards.com.

3. Negative credit score impact
This is especially true if you sign up for multiple retail cards.

“You’re going to see more than a 30 point ding if you start getting multiple cards,” says Andy Jolls, CEO of the credit educational site VideoCreditScore.com. And closing recently opened accounts won’t necessarily make them disappear.

“That account will stay on your credit report for seven years. It doesn’t instantly go away when you close it,” explains Emily Peters, credit expert for Credit.com. In addition, applying for a new card also lowers the average age of your accounts, which can have an impact on your credit history’s length.

4. Spending temptation
“Once you sign up for a store card, you give the store free reign to bombard you with enticing ads and shopping promotions,” says Fatima Mehdikarimi, founder of ShoppingQueen.com. So if you’re mulling over signing up for a retail card, consider your shopping habits. If you acquire a store coupon, do you typically have the urge to use it, even if it’s on something you might not have necessarily bought without it? If so, you’re probably better off not signing up. It’s also important to keep in mind that “many of these promotions and sales can simply be had by signing up for the store’s e-mail newsletter,” according to Mehdikarimi.

5. The terms aren’t spelled out up front
Usually, salespeople will offer you the credit card when you’re making a purchase, and that doesn’t give you a lot of time to think or go over a full explanation of the terms and conditions before you decide.

“Anytime that you’re making a decision without taking the time to read through the contracts and terms of service, it’s not (a good idea),” says Schulz. “It’s always best when you’re offered one of these cards to take a step back and think about it.” So walk away to give it a second thought before jumping into any rash decisions.

Interested in other options? Give us a call or stop by today to find out how we can help you.

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Five Questions to Ask When Getting an Auto Loan

The right questions can get you the right deal

In the market492494951 for a new car? Car shopping probably has you focused on questions like, What kind of car do I want? What are the safety ratings? Leather or cloth interior? However, a main question you should be asking yourself is, How am I going to pay for this car?

If you’re like most people, you probably plan to use an auto loan to finance your new purchase. And if that’s the case, you’ll need to consider a few questions beforehand to make sure you’ll be able to afford the car you want and won’t encounter any negative blows along the way.

“The big mistakes are made in the financing office,” explains Phil Reed, the senior consumer advice editor at Edmunds.com, the auto research website. “Making the right decisions can save thousands over the life of the loan.”

To make sure you’re making the right choice regarding an auto loan, here are five questions to ask before you sign the dotted line:

1. What is the type and amount of the interest rate?
With any type of loan comes an interest rate. But all rates are not the same – they vary among factors like your credit score, how much you’re putting down on the car, etc. A fixed interest rate is when your payments stay the same throughout the term of your loan. This type of loan is preferred among many since it makes budgeting easier, since you’ll always know what you owe. A variable interest rate, however, changes, so repayments may differ in amount. To avoid future headache-inducing surprises later, find out the type of interest rate you’ll be paying off before you complete the deal so you can factor it into your budget. The interest rate percentage is also important to know because it can vastly impact your monthly payment amount. Knowing what the interest rate is will help you determine how much interest you’ll pay over the life of the loan.

2. What is the loan’s term?
A term is the length of your repayment period. Finding this out is essential because some finance contracts require that there be a specific time period, typically two or three years. If that’s the case, your monthly payments will be higher. For some, it makes more sense to have lower monthly payments over the course of additional years, say five or six. For example, say your loan is for $18,000 at a 10 percent interest rate. If your term is 24 months, monthly payments will be $887. But if your term is 36 months at the same interest rate, monthly payments will be $615. Talk with your auto loan provider to determine what’s right for you.

3. What will my monthly payment be?
For the same reasons as knowing your interest rate beforehand, find out what your monthly payments will be. Make sure the dealer factors in the interest rate and any other fees bundled into that payment. For instance, if you’re purchasing add-ons to your vehicle, like fabric protection and paint sealant, that is an extra cost that should be calculated into your repayments. It’s important to understand the exact amount that you’ll be paying each month.

4. Are there penalties and fees I should know about?
Ask the finance company or lender if there are any additional costs that haven’t been presented yet on the loan. If you’re interested in paying off your car early, find out if there are any prepayment penalties you’ll ensue. Also ask about late charges as lenders will typically charge a fee if you’re late on your payments. The amount varies, but it could be around five percent or more of the unpaid portion of your monthly repayment, or a specific dollar amount. Also, there may be an establishment fee, which is the cost to set up a loan, or a monthly account keeping fee, a monthly charge to cover account keeping costs.

5. What documentation do you need?
To apply for a loan, you’ll usually need to provide several documents, for example, proof of income. Also, you may need to acquire comprehensive insurance coverage. Find out what kinds of documentation you’ll need to provide, and also if there’s anything that may delay the loan approval processing, such as past credit issues, repossession or bankruptcy. Make sure when signing the loan agreement that you read all the fine print and understand what it all entails. If you don’t understand something, ask questions to clarify.

Most of the time, your financial institution is a better bet when it comes to auto loans. You don’t have to worry about someone trying to take advantage of you either. If you’re looking to purchase a car and are in need of an auto loan, contact us today to see how we can help you.

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