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!

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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.

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.

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

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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