Credit Card Quick

When to Choose a Credit Card over a Debit Card

Choosing Credit Card

Debit cards are ideal, as they allow individuals to stay within their budget and spend only what they have. However, there are time when using a debit card is not a good option. Credit cards boast a number of advantages over debit cards, although they can be used in generally the same way. In other words, don’t let the debit cards fool you: they simply can’t offer the protections afforded by credit cards.

Here are times when it is best to choose a credit card over a debit card:

• Shopping online – Because debit cards are linked directly to your bank account, you may leave your finances vulnerable should an identity thief steal your card’s numbers. Although there are some protections afforded to debit card customers in the case of identity theft, the protections afforded to credit card customers are more comprehensive. In addition, although you may be protected from fraudulent use of your debit card, having your bank account drained may cause additional problems, like bouncing checks or not having enough money to cover living expenses.
• Expensive purchases – Any expensive purchase is best bought using a credit card, as it will likely offer you dispute rights if something goes awry with the product or service. Also, many credit cards feature extended warranties, thereby eliminating the need to purchase them from the retailer.
• Deposits – If you must use a credit card to hold anything from a hotel stay to a car, the company will likely take a security deposit against your debit card. In other words, if you reserve a hotel they may charge you a $200 security deposit that is returned after your stay; however, if you use a debit card to reserve the hotel room, you won’t have access to that $200 until your stay had ended.
• Restaurants – Using a debit card at a restaurant may set you up for loss. Anytime someone needs to walk away from you, out of your sight, to make a charge purchase, there is a chance of theft. With this in mind, it is best to use a credit card when you dine out, thereby better protecting yourself from the ill effects of identity theft.

Creditors now Paying Close Attention to their Customers’ Online Purchases

News

Credit card companies are watching you…online, that is.

Many of the country’s biggest credit card companies have begun using marketing techniques to appeal to certain customers online. In fact, they are using the shopping habits of customers to offer them customized, online offers.

Customized Offers Tailored to your Specific Habits

In other words, don’t be surprised that the next credit card offer that pops up while you’re surfing the web has been specifically targeted to you, based on your shopping habits. Credit card companies are now able to target individuals in a more precise manner; thereby allowing them to offer customers offers that best suit them.

Instead of the blanket credit card offers typically put out on the web, credit card companies are now doing a much better job targeting information, while still protecting their users’ privacy. It is now quite common, for example, for a creditor to offer a rewards credit card to you if you’re a frequent traveler. Based on your Internet surfing habits, they will be able to take a guess at your income and your interests, thereby allowing them to create a truly customized credit card offer.

Credit Card Companies Marketing Tactics Becoming Sophisticated

The credit card companies’ ability to track your spending and surfing habits has become much, much more sophisticated over the last 12 to 24 months, says Rob Shavell, co-founder of Abine Inc., a privacy software company.

Some companies are now able to compile large databases that store information on everything from your Internet browsing history, your “cookies” from other websites, and even “third party calls,” which is essentially information about you that is exchanged with outside websites.

One of the newest ways in which credit card companies are obtaining your personal spending information is through a technology called “device fingerprinting,” which provides companies with information about the computer you’re on, and the correlation between you and other people.

Some consumers enjoy having credit card offers tailored to them, while others may find this to be an invasion of privacy. If you want to avoid being targeted for marketing purposes, the best thing you can do is delete your computer’s Internet history and cookies regularly.

How to Stay Safe when Using Public Wi-Fi Connections

Identity Theft

We all love to settle down in our neighborhood coffee shop with a cup of our favorite custom blend coffee and our trusty laptop. Because many of today’s public locations, like coffee shops, airports, hotels and libraries offer free Wi-Fi connections, more and more people are now setting up shop and doing everything from checking their emails to working in public places.

But how secure are public Wi-Fi connections, and can you really trust them to keep your personal information safe when shopping online with credit cards?

The bottom line is that public Wi-Fi connections just aren’t as secure as your home or office connection, and the ability of someone to hack into your computer by someone sharing the same public connection is quite good.

In fact, the only thing that is secured over public Wi-Fi connections is your log-in information. The problem, it seems, is that technology has been zooming along at lightning speed, and the security for that technology just isn’t keeping up.

Many of us love the convenience and practicability of using a public Wi-Fi connection and, luckily, there are a number of things you can do to better safeguard your personal information:

• If you work on public Wi-Fi networks frequently, consider using a mail website that encrypts your data. You can easily tell whether your mail is encrypted by looking for the closed padlock icon that is usually located to the right of the address.
• If you check your email, shop with credit cards, or surf the Web using your mobile device, make sure it is updated with all the latest security updates.
• Consider using virtual private networks, most commonly known as VPNs. VPNs encrypt all of the information that you send and receive online. Some employers have already begun implementing VPNs, so check with your employer about this option.
• Consider using paid Wi-Fi instead of free Wi-Fi. You can purchase a wireless card through any of the phone carriers. Your own private Wi-Fi access will provide a more secure connection, particularly if you work away from home on a regular basis.

The Resurgence of Airline Rewards Credit Cards

Credit Card Rewards

Airline rewards credit cards used to be the cream of the crop when it came to credit cards. However, they quickly took a back seat to other types of rewards credit cards, such as cash back rewards credit cards. Interestingly enough, though, these airline rewards credit cards are now taking center stage again because of their attractive rewards and perks.

New Perks and Waivers take Center Stage

The airline industry doesn’t exactly top the list in terms of favorite companies in the eyes of consumers, mainly due to the high fees and extraneous surcharges for everything from an extra piece of luggage to a can of soda. Airline rewards credit cards therefore often address these inconvenient charges by offering free waivers and perks. On top of that, credit card companies are now offering plenty of mileage rewards, too, thereby making many consumers reconsider the advantages of airline rewards credit cards.

According to Mintel Comperemedia, airline rewards cards (including credit cards that offer either points or miles) accounted for nearly 40 percent of the credit card industry in 2010, which was an increase of 30 percent from just a year earlier. It’s no secret why airline rewards credit cards are becoming a popular choice among consumers again, either: the benefits are better than ever.

Great Deals in the Airline Industry

For example, Delta has begun offering its cardholders a free checked bag fee (worth $25), while sign-up bonuses for Continental cardholders range between 30,000 and 50,000 miles, which equals nearly one or two domestic, round-trip tickets.

Southwest, which is due to release its credit card in the next month or so, is offering its cardholders the option of trading in their points to take advantage of fare sales at lower rates.

JetBlue has found its niche, too, in terms of airline rewards credit cards: it updated its rewards program to eliminate expiration dates and to change it rewards system to award consumers points per dollar spent rather by the length of the flight.

Unlike the airline rewards credit cards of the past that came with large annual fees and even larger interest rates, today’s airline rewards credit cards are luring customers in with often too-good-to-pass-up deals and perks.

Bank of America to Hit Customers with Annual Fees

News

It is clear that credit card companies are still reeling from the ill effects of the CARD Act legislation. From raising interest rates to becoming much more selective regarding whom they will offer credit, the effects of the CARD Act continue to reverberate throughout the credit card industry.

Bank of America, though, appears to be taking things one step further, as they recently announced that they will begin charging annual fees to millions of its customers. Although it is still not clear how many people will be affected by these new annual fees, even consumers with a good history and a good credit score may not be in the clear regarding annual fees.

Fees to Start Soon

Bank of America is expected to begin sending letters to its current credit card customers as early as this spring. The letter will state that the company will begin charging many of its customers a $59 annual fee. The letter also states three reasons why credit card customers may be charge this annual fee, but it falls short on spelling out who exactly will be targeted.

The letter goes on to state that the company is making the changes due to “derogatory public record or collection filed” and that they will review their banking relationship with each customer.

Who is being Targeted?

It appears that the company is targeting customers with outstanding balances and why they are doing this is quite simple. If the company charges a customer with a large balance the $59 annual fee, they can either accept the fee or close the account. However, before they can close the account they must pay off the balance — and this is simply not possible for some customers. In short, the company can get away with charging the $59 fee to customers with higher balances because, unless they pay off their balance, they must keep the card open and pay off the fee.

Bank of America, although it doesn’t state this, of course, says that every account undergoes a periodical review, and that every customer will either have the choice to accept the fee or close the account. Bank of America also states that the “majority” of customers will receive the annual fee.

Have you Gone Paperless Yet?

Introduction

Millions of Americans are now enjoying the convenience of paying their bills online, but only a fraction of those people have canceled their paper statements.

Consumers Paying Online, Reluctant to go Paperless

In fact, about 50 percent of credit card customers pay their bills online, but only about 15 percent of those customers have gone to paperless billing and statements. Credit card companies, because so few customers use the paperless option, must manage paper billing, as well as online bill payments, for the same customers. Coupled with postage costs and it’s clear to see why credit card companies are pushing for paperless billing and statements.

Expect Paperless Incentives from your Creditor

If you are one of those consumers who can’t seem to say good-bye to your paper statements each month, now may be a good time to make the change. Creditors are now offering a number of incentives and features for consumers who go paperless.

If incentives don’t work, it is expected that credit card companies will use a negative incentive – charging customers who want to receive paper bills – to convince them to go paperless. Because customers would likely revolt if this occurred, credit card companies have begun going the nice route.

Some of the incentives offered to customers from their credit card companies include: email alerts when their bill is due, which provide them with a visual reminder; sweepstakes that allow winners to receive large cash prizes; and environmental incentives like Wells Fargo, who announced that it would contribute $30,000 to the Arbor Day Foundation to honor its customers who went paperless.

Advantages of Going Paperless

Consumers are gradually leaning toward paperless billing and statements because of the effect the reduction of paper will have on the environment. In addition, many consumers now realize that no paper statements mean less of a likelihood of their credit card information being stolen.

In fact, paperless statements provide an extra layer of security, as their credit card information is sent and received through secure log-ins. Many credit card companies have begun offering educational campaigns that tout the many advantages of going paperless.

How to Protect yourself from Credit Card Skimming

Identity Theft

We all have to be extra diligent when it comes to credit card thieves and hackers. After all, we don’t want to become the next victim of identity theft.

In particular, credit card thieves are targeting consumers by “skimming” their information when they pay at the pump or hit the ATM.

What is skimming?

Skimming is accomplished when a credit card thief puts a special device over a credit card slot. These skimming devices, which fit inconspicuously over a credit card reader, are designed to capture your credit card numbers when you swipe your card.  In other words, a skimmer allows the credit card thief to capture your credit card numbers easily and quickly, and you are left none the wiser.

Where does skimming take place?

Skimming can take place on any credit card reader that isn’t controlled by the retailer. In other words, if a thief is capable of placing a skimmer onto a credit card reader, they can steal your credit card information. Some of the common places thieves place credit card skimmers are on ATMs and gas station pumps.

How can I protect myself?

The best way to protect yourself against skimming is to be aware of the look of the machine. If the card reader looks different from other nearby card readers, or if you notice anything resembling a loose card slot or glue residue on the machine, steer clear of it and alert the retailer.

You can also better protect yourself from the loss stemming from a skimming incident by using your debit card as a credit card. When you use your debit card as a credit card, you are likely protected from theft, and federal law prevents the credit card company from charging you more than $50 after you report a credit card theft incident.

You can also protect others from skimming by reporting any incident to the local police. If your credit card information was stolen at your local gas station, for example, it is best to file a police report so they can take the appropriate measures to apprehend the individual or individuals in question so other consumers won’t have to deal with the effects of credit card theft.

The Best Time to Use your Credit Card

Introduction

Many consumers enjoy the benefits of a credit card every day, while others use theirs more selectively, for large purchases or while traveling. Although the frequency at which you use your credit card is a very personal one, there are a few occasions when it is always a good time to use your credit card:

• During a financial emergency – If your furnace breaks and the weather is supposed to fall below freezing, what do you do? Because not many people have access to a large sum of cash – especially in a pinch – credit cards are a popular choice for getting us through life’s unexpected financial emergencies. Credit cards may also have lower interest rates and more liberal repayment terms than financing a large purchase through a company, so it pays to bring out your credit card during these times.
• When making a large purchase – If you have a credit card with a low, fixed interest rate or a credit card with a low, promotional rate, it may make good financial sense to use it to make a large purchase. For example, if you have a low, promotional rate on your credit card and you know you can pay off your purchase during the promotional period, you may end up being able to make monthly payments without interest. In other words, it may be a great opportunity to make that large purchase you’ve wanted!
• When traveling – When traveling, especially abroad, it just doesn’t make sense to carry cash. If you lose cash, you are not protected. We love credit cards for traveling because you are protected again credit card theft or identity theft, and you automatically get the conversion rate when traveling to countries with different currencies. Plus, the convenience of a credit card is unmatched when traveling! From booking hotels and airlines to car rentals and dinner reservations, a credit card is the most practical — and often the only accepted — form of payment.  Don’t forget that credit cards may also serve as car rental insurance, and can be easily replaced if lost or stolen.

HELOC or Credit Card: Which is Right for you?

Choosing Credit Card

If you need access to quick cash, where do you turn?

For most people, access to cash means either a home equity line of credit (HELOC) or a credit card. The question is: which one is right for you?

Both HELOCs and credit cards provide convenient sources of financing. Both a HELOC and a credit card are an open-ended line of credit, and both can be ideal for large purchases.

Here are the pros and cons of both HELOCs and credit cards:

PROS – Home Equity Line of Credit (HELOC)

• A home equity line of credit is open, meaning that the cash is available when you need it, regardless of the expense.
• A home equity line of credit, because it is tied to your home, usually comes with a low interest rate.
• Depending on the amount of equity you have in your home, a HELOC can provide you with access to a significant amount of cash for everything from a home remodel to your child’s college education. Plus, if you use your HELOC to pay for home improvement or home remodel projects, you are increasing your home’s value, which therefore further raises your home’s equity.
• The interest you pay on a HELOC is usually tax deductible.

CONS – Home Equity Line of Credit (HELOC)

• Because a HELOC is tied to your home, your inability to pay on the loan could result in the foreclosure of your home.
• Some HELOCs have specific time frames in which you can access your money, which can leave you in a financially vulnerable position if you need quick cash.

PROS – Credit Cards

• You do not need to own a home to enjoy the benefits of a credit card.
• A credit card is easier to apply for than a HELOC.
• You do not risk the loss of your home if you fail to pay on a credit card.
• Depending on your credit score, you can achieve a low interest rate.

CONS – Credit Cards

• The interest on credit cards is not tax deductible.
• The credit limit on a credit card is likely lower than a HELOC.

Where to Think Twice about Using your Credit Card

Identity Theft

Sure, we love our credit cards. They are practical and convenient, and they sure do beat the heck out of toting around cash. However, regardless of how much we love our plastic there are a few places where it may be best to keep it in our wallet.

• Unfamiliar ATMs – It is probably safe to use an ATM that is owned by a bank, but other types of ATMs commonly found at gas stations or convenience stores, for example, are best to avoid. This is because these types of ATMs are not as closely monitored as bank-owned ATMs and may be more susceptible to being hacked. For example, skimmers (small devices that are placed over an ATM card reader) may be installed by hackers onto these types of machines, thereby allowing the hacker to easily obtain your card’s numbers when you swipe it.
• Traveling vendors – It is best to avoid using your credit card when purchasing items from traveling vendors, like those you may see at shopping mall craft shows, flea markets and carnivals, as it may be extremely difficult (or even downright impossible) to track down the vendor if there is an error or discrepancy on your credit card. In addition, the likelihood of coming across an unscrupulous vendor is also much higher.
• Unfamiliar websites – With the influx of new websites each and every day, it becomes very hard to determine which ones are trustworthy and which ones are not. Because of this, it is usually best to only shop online with trusted websites. If you are unsure of the validity of a website, check it out online, as consumers are usually more than willing to post their experience with certain websites and companies. But don’t stop there; make sure the website you are shopping on is secure. The best way to determine whether your credit card information is fully protected is to look at the address of the page on which the retailer asks you to enter your personal information. In short, the web address should begin with “https” instead of “http.” Although most consumers merely looked for the closed padlock sign near the website address, it has been found that some unscrupulous websites simply inserted the padlock icon to fool consumers.