Should You Save Your Credit Card Information Online?

How to protect your information when shopping on the internet
Woman using a tablet to make an online purchase using a credit card
It seems all too common these days to hear about major breaches at retailers that leave consumers’ credit card numbers and personal information vulnerable to identity thieves. In perilous times, it feels tenuous enough using a credit card to complete purchases in-store, let alone online. If you shop online frequently, the question of whether it is safe to store credit card information online for the purposes of faster and easier check outs is a valid one that can be approached a number of ways.

Assume the worst
In an April 2014 article on NerdWallet entitled “Should I Save My Credit Card Payment Information on Retail Websites?”, website contributor Lindsay Konsko states the obvious in a blunt fashion: “[Y]ou must understand that anything you put on the internet should be considered completely unsafe and available to the public. No matter how much a website boasts about its security, it may still be vulnerable.”

You can save your credit card information with retailers if you shop there frequently enough that it might warrant it, but you should only do so fully understanding the level of risk involved. Some retail outlets like Amazon.com provide two-step authentication to protect your information and help you spot when someone might be attempting to access your account, but even then, it is not entirely protected from the possibility of data breaches.

Consider the alternatives
CNET Senior Editor Lexy Savvides recommends protecting yourself from the possibility of having your credit card information stolen from an online retailer by considering instead the option of shopping online with a prepaid card. According to Savvides, prepaid credit cards are advantageous in that they can help curb impulse shopping and can easily be reloaded (for a small fee), but arguably the biggest advantage that they provide online shoppers is that “even if the card’s details are compromised somewhere along the chain, there is a limit to the amount of money that can be taken.”

Be proactive
The reality, as unfortunate as it may be, is that there can be no guarantee of the complete safety of your credit card information. Having said that, it is within your power to determine how much risk you face. Savvides notes that you should only enter credit card information when checking out online if the website has an https connection and “a padlock or another digital security certificate to ensure that you are only entering your details on a site that encrypts the transaction end-to-end.”

Savvides also recommends being attentive when it comes to monitoring transactions. Konsko notes that most credit card companies offer fraud protection and low or zero liability for fraudulent charges, but it is not always guaranteed that a credit card company will notify you when a charge goes through even if it is unusual. As such, frequent or even daily monitoring of your balances and transactions can be key to shutting down identity thieves before they have an opportunity to do any major damage.

Savvides notes that credit card companies like MasterCard and Visa offer secondary levels of security to protect your credit card information by requiring a private code or password before completing a purchase. Before deciding whether you feel comfortable storing your credit card information with a retailer online, make sure that your credit provider will protect you in the event of having that information compromised. When it comes to credit, it is always better to be safe than sorry.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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When to Use Credit (and When to Avoid It)

person holding credit card and using a laptopIf used carefully, credit can be a helpful financial tool. For example, using credit to purchase a home now, rather than trying to save up the whole purchase price, makes financial sense. The home provides a place to live that will perhaps increase in value and the mortgage interest offers a tax deduction. Credit may also help you deal promptly with costly emergencies.

Many consumers turn to credit when faced with unexpected home or auto repairs, as well as medical emergencies. And credit offers convenience, enabling you to rent a car or hotel room or buy airline tickets over the phone or online. In many situations, credit offers peace of mind; there is no need to carry large amounts of cash when shopping or traveling.

Despite all the advantages and conveniences credit can provide, there are some pitfalls associated with credit use. Credit can be expensive. Interest rates (often ranging from 14% to 22%), finance charges, annual fees, and penalties can dramatically increase the cost of any purchase made on credit. Then, there is a tendency to overspend on credit. It is much easier to spend more than you can afford when all you have to do is pull out the plastic. Over-extension gets thousands of consumers into financial trouble every year.

It is possible to have the best of both worlds, though. Designing a realistic spending and savings plan so you are aware of how much credit you can afford, as well as comparing the cost of credit and shopping around for the best deals, will help you avoid credit trouble.

Here are a few more tips:
Keep your charge receipts in an envelope with a running total on the outside. If the total exceeds an amount you consider appropriate, you know it’s time to curtail your spending.
Save monthly for expenses such as auto maintenance, holiday gifts, and the kids’ school clothes. That way you don’t need to use credit to cover these expenses, or, if you do charge them, you can pay the balance in full when the bill arrives.
Monitor interest rates. Choose lower-rate financing options whenever possible.
Limit the number of open credit card accounts you have. You don’t need more than one or two credit cards, and it’s much easier to keep track of your total outstanding debt with just a couple of accounts.

How Much Debt Is OK?
As a rule, no more than 15% of your net (take home) income should be committed to consumer debt payments each month. Another way to determine how much debt is appropriate for you to carry is to first complete a family budget. The amount remaining after you deduct your monthly savings and living expenses from your net income is the most you should have going to debt repayment. If you’re sending more than that to your creditors each month, you may want to consider credit coaching to help you reduce your debt load.

Shopping for Credit
When shopping for a credit card, you should first decide how you plan to use it so you can compare the features that are important for you. It is important to understand the difference between a charge card and a credit card. The balance on a charge card must be paid in full every month. Paying only a portion of the bill will cause your account to be delinquent. A credit card allows you to carry a balance for as long as you want, provided you make at least the minimum monthly payment due.

If you will pay your credit card bill off every month, a low annual fee is important. If you usually carry a balance, look for the lowest interest rate. Shop for a grace period, the amount of time after your purchase during which finance charges are not assessed. Some banks and finance companies give you up to 30 “free” days, but it has to be at least 21 days. However, interest starts accruing immediately on cash advances; there is no grace period and the interest rate is higher than that applied to regular purchases.

Depending on your payment and credit use habits, you may also be affected by late and, possibly, over-limit fees.

If you have no credit or a bad credit history, you may be able to obtain a secured credit card. A secured card works just like a regular credit card except that you must leave a deposit—usually between $250 and $500—with the issuing bank as collateral. If you default on your payments, the bank takes the money owed out of your deposit.

The interest rate and annual fee on a secured card are often a bit higher than on a regular card. But a secured card can offer you the convenience of a regular credit card and the opportunity to improve your credit record. When comparing cards, try to find one that does not charge an application or processing fee and confirm with the issuing bank that they will report your payment performance to at least one of the three major credit reporting bureaus, Experian, Trans Union, and Equifax. Make the most of this chance to build an unblemished credit report!

Used with Permission. Published by BALANCE Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Getting Control of Your Credit Card Bill

Stop the headaches and take charge of your cards with these simple tips

Credit cards are great financial tools,bankingon_e_a002899539 giving you purchasing freedom and the opportunity to build a strong credit profile — a must-have for anyone looking for the best deal on a car, home or even a business loan. For many, however, credit cards are also a great way to get into trouble. If your credit card bills are controlling you rather than the other way around, read on to learn how you can turn the credit card game back in your favor.

First, you have to make sure you know exactly what the terms of your credit card contracts are. Interest rates, grace periods for repayment, late charges and other fees vary considerably from card to card (and from consumer to consumer). Read the card agreement before you spend or sign, and be sure to read your monthly statements carefully.

“If you don’t open your credit card billing statement, you risk missing your payment due date. You could also miss important announcements about changes to your credit card terms,” writes personal finance expert LaToya Irby. “Knowing your credit card terms give you more control over your credit card costs. You know how you should and should not use your credit card based on how your creditor will respond to your actions.”

Once you have a handle on your credit card terms and know what not to do to make the bills even worse, it’s time to start paying those bills off. Making minimum payments or simply paying what you can after a month’s worth of spending is setting yourself up for years of effort and a slim chance of successfully climbing out of credit card debt. Instead, budget a set amount — more than the minimum required payment — that you will pay toward your credit cards each month, and make it the first thing that comes out of your paycheck.

“Most card issuers let you set up automatic payments from a checking account and allow you to decide how much you pay,” says credit adviser Elizabeth Ody. “This strategy keeps that money from becoming a temptation for you to spend on something else because it’s already gone. It also helps you avoid late payments that can damage your credit score, cost you a bundle in fees and trigger an interest rate hike.”

Finally, if your bills are simply too high for you to manage even with a strict budget, don’t simply ignore the problem. Talk to your credit card company and see if they’ll negotiate — you might be surprised.

“Sometimes you can get your interest rate lowered, set up a payment plan that will allow you to pay off your debt, or even get some of your debt forgiven, all with a simple phone call,” writes financial journalist Amy Fontinelle. “If your first call doesn’t work, remember that just because one person says no doesn’t mean that’s the final answer. Keep calling the company back – you’ll often get a different customer service rep almost every time, and talking to different people may allow you to negotiate a better deal.”

Getting your credit cards under control might take a bit of effort, but it will be well worth it in the long run. Once you’re free from the nightmare of mounting credit card bills, you can focus on building a lifetime of financial freedom.


Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Protect Yourself from Identity Theft!

When your personal financial information gets into the wrong hands, the consequences can be devastating. It’s critical to understand how identity theft and card fraud can happen to you. The information provided here will help you avoid becoming a victim and tell you what you can do if your identity is stolen.

What to do if your identity is stolen
If you should fall victim to identity theft, it is important that you act quickly. Contacting the correct agencies and filing the necessary reports will go a long way toward minimizing any damage to your financial well-being.

Financial Institutions and Credit Card Issuers
Report the theft to your credit card issuers and request replacement cards with new account numbers. Ask your bank to close affected accounts and obtain new account numbers there as well. If you have checks stolen, you can also ask your bank to stop payment on any checks about which you are unsure.

Law enforcement
Report identity theft to your local police department. If the crime occurred somewhere other than where you live, you may wish to report it to law enforcement there as well. The police will create an “identity theft report” and give you a copy.

Credit Bureaus
Immediately contact the fraud departments of each of the credit bureaus – Experian, TransUnion and Equifax. Alert them that you are a victim of identity theft, and request that a fraud alert be placed in your file. You can also request a security freeze, preventing credit issuers from obtaining access to your credit files without your permission. This prevents thieves from opening up new credit cards or other loans.

Federal Trade Commission (FTC)
The FTC does not investigate identity theft cases, but they can share information that you give them, such as the identity theft report number, with investigators nationwide.

Simple Ways To Protect Yourself
There are some simple steps you can take to reduce or minimize the risk of becoming a victim of identity theft or card fraud.

Practice safe Internet use – Delete spam emails that ask for personal information and keep your anti-virus and anti-spyware software up-to-date.
Shop online only with secure web pages – Check the bottom of your browser for an image of a lock or look for “https” in the address bar.

Never send via email – Never send credit or debit card numbers, social security numbers and other personal information via email.

Destroy personal financial records – Tear up or shred credit card statements; ATM, credit, or debit card receipts; bank deposit receipts; loan solicitations; and other documents that contain personal financial information.

Secure your mail – Empty your mailbox quickly and get a mailbox lock. When mailing bill payments and checks, consider dropping them off at the post office or a secure mailbox.

Be careful with your Social Security number –  Your social security number is a major target for identity thieves because it can give them access to your credit report and bank accounts. Never carry your card with you. Instead, memorize your number and keep the card in a secure place at home or in a safe deposit box. Never write or print your social security number on checks. You may also ask your employer to remove your social security number from your pay check stubs.

Check your credit report at least once a year – Obtain and review your credit report for suspicious activity. We can review your credit report with you here at the credit union, or  you can request a free copy of your report at www.annualcreditreport.com or by contacting any one of the three major credit reporting agencies; Experian, TransUnion and Equifax.

Beware of scams – Always be on the defensive with your financial information. Never give out personal information to telemarketers or respond to emails from someone claiming to represent your credit union, credit card issuer, a government agency, a charity, or other organization. If you think the request is legitimate, contact the agency directly to confirm their claims.

Tips For Frequent Travelers
When you travel be on the alert for opportunities that thieves may try to take advantage of.

Receipts – Do not leave credit card receipts on the table at restaurants; sign them and hand them directly back to the server. Keep your copy of all receipts.

Wallets – Stolen wallets frequently lead to identity theft, so instead of carrying your wallet in your pocket or having it easily accessible in your bag, use travel pouches that are worn inside your shirt.

Checks – Leave checkbooks at home in a locked safe or drawer. Checking account takeover is one of the hardest types of financial fraud to clear up.

Camera phones – That tourist with a camera phone may actually be taking a shot of your credit card or driver’s license. Keep important personal information out of view from others.

Hotels – Lock up all valuables in room or hotel safes while you are out, including laptops, passports and other documents that contain your personal identifying information. Do not leave these items with a hotel doorman to transport or hold—carry them yourself.

Airplanes – Do not put any items that contain your social security number, card numbers, or financial institution account numbers in checked luggage. Always carry that with you.

This content is used with permission of Visa, Practical Money Skills for Life.