My husband and I use two main credit cards to pay for everything that we can, and then we pay off the balances every month. The Discover More card gives us 5% cash back on rotating categories and the PenFed Visa gives us 5% cash back on gasoline. I check the monthly statements between the 14th and 17th of every month when I type every expense into our budget spreadsheet, and then I pay off the balances even if they aren’t due for another 3 weeks. I was recently reminded of what a good idea it is to check your credit card statement before paying the bill.
Our Info was Stolen
Two months ago, someone stole our credit card information somehow and bought something that cost $499. They used our Discover Card info through Paypal, so it took 2 calls for me to figure out what happened. The first was to my husband to find out what he bought that was $500. He verified that he didn’t buy anything that expensive. I then called Paypal and found out that someone ordered a $499 fishing pole from Trinidad through my husband’s Paypal account.
Handling the Charge
I then asked them to freeze our account and look into the issue, but when they said that it could take up to 6 weeks for their investigation, I thanked them and called Discover instead. Their representative immediately froze our account, let me know which monthly payments seemed to be auto-billed so I could call and have them moved to our other credit card, and issued us new cards for a new account that arrived 3 days later. Within 3 weeks, our new account showed that the issue had been resolved and we were never on the hook for any of the $499. I opened my account with Discover when I was 19 years old and have been impressed ever since.
Changing our Auto-Pays
The biggest hassle was changing all of our utilities and subscriptions to be auto-charged to the Visa. A few companies let me change my card info online, lost my change, tried to charge my old Discover anyway, and then sent me a notice that my account hadn’t been paid. I was very glad I printed confirmations of my changes and could prove that I owed no late fees and they screwed up. But other than a few annoying situations like that, the issue was wrapped up pretty quickly.
Check your Credit Card Statements Before you Pay
This did reinforce the idea that I need to check every, single credit card charge every month though. If I hadn’t, I would have paid for someone else’s $499 fishing pole. You’d think I’d have noticed that much extra on our bill, but it was during the same month we had vacation charges and some pet bills, so the overall bill actually didn’t seem to be so bad. It was even better when I found out I didn’t need to pay for $500 of it, lol.
Do you check your credit card statements every month?
Feel Free to See your Free Credit Scores!
The following is a guest post about credit cards and credit scores from Angie Picardo, a staff writer for NerdWallet, which is a credit card website dedicated to helping consumers find the best credit card.
Though they are often mistakenly interchanged, there are some significant differences between credit cards and charge cards. Unlike credit cards, charge cards don’t have preset spending limits. The idea of a limitless card may sound dangerous, but since the balance must be paid in full at the end of each month, cardholders are encouraged to think twice before embarking on any shopping sprees. Plus, a card issuer can always cancel the card if they decide you’re too risky.
So how should our friends at Fair Isaac factor a charge card into your credit score? You (hopefully) never carry a balance month-to-month, and since your credit limit is technically infinite, your debt-to-credit limit ratio is zero to infinity. FICO doesn’t waste time with abstract numbers, of course, so we’re left with the question: How does a charge card affect your credit score?
Does a charge card influence your credit score?
According to FICO, the percentage of your open credit lines in use, or your debt utilization ratio, makes up 30% of your credit score. So if you had an $8,000 limit with a $2,000 balance, your utilization ratio would be 25%. A lower debt-to-credit limit ratio translates a better credit score because it shows that you can avoid maxing out when trusted with a good amount of credit. Unfortunately, figuring out the debt utilization ratio on a card with no limit and no balance makes it a little difficult to determine how charge cards affect your credit score.
Allow us fill you in.
Charge card issuers report your highest balance to date, or a “high limit,” instead of your credit limit. They also report the credit line as “open” as opposed to a “revolving” credit line, which has no fixed number of payments. If a credit bureau sees an open account with a high limit instead of a credit limit, they know they’re looking at a charge card. They then disregard the information, so charge cards have no impact, positive or negative, on your credit score.
So what’s the benefit?
Before you write off charge cards as limited lines of credit that don’t help your utilization ratio, consider the cards’ other effects. Over time, having the account bumps up the average length of your credit lines and payment history (that is, if you’ve been keeping up), which adds up to 50% of your overall credit score. If your only goal is to maintain your credit score and keep low balances, a revolving card may be the best credit card for you.
But it really all just comes down to whether or not you are a responsible cardholder. A charge card can be costly if you carry a balance: some charge $35 if you’re late, or worse, 2.99% of the balance. That translates to an APR of over 35% – far worse than most credit cards. If there’s a chance you won’t be able to pay off the debt on your charge card in a month, you should look for a low interest rate credit card instead. Charge or credit, no card can replace keeping a keen eye on your budget and practicing good, old fashioned, smart spending habits.
The following is a post on behalf of Money Supermarket.
While most people’s everyday lives depend on their credit score, often, they have no idea how to check it. If they do know how to check it, they don’t keep constant tabs on the changes and progress made. When you know your credit score, you have some control over your life, your finances and the decisions that you are going to make in the near future.
After checking, you may notice that there are some discrepancies and you can contact a place such as moneysupermarket.com to help you get back on track.
Knowledge is Power.
When you know your credit score, you know how other companies and businesses view you. You can walk into a car dealership knowing that you have a strong score and should be paying a lower interest rate. As you open the mail and come across credit card offers, you know whether or not to take advantage of any of the opportunities presented.
When you don’t have a clear idea of what your credit score is, people can look to deceive you and try to take advantage of you. Knowing your score means that you know just how valuable you really are to companies that are looking for your business.
Be one the Lookout for Mistakes.
There are times when reporting is inaccurate. When you know your credit score, you can keep an eye on the changes. When something doesn’t look right, you can check and make sure that there are no mistakes. Catching a mistake early means that you can have the numbers adjusted right away and get your credit score back on track. Don’t expect anyone else to take care of this number for you.
Protect your Identity.
When someone else uses your credit cards or even your identity, your credit score is one of the first things to be affected. With your credit score and the information included in it, you can track down the unauthorized charges, when they took place and be on your way to getting your credit back in order.
Prepare for the Future.
When you know that your credit score is weak you can begin working to improve it. This means paying off your loans and bills and building up positive credit. You can do this with checking and savings accounts and even credit cards that are specifically made for people who are struggling financially.
When You Can’t Check Regularly.
Some people just can’t keep up with their credit score on their own. You can look into a company that will be able to track your score as well as your report for a fee. They will alert you when they see a problem and will work with you to fix whatever happened.
In the case of identity theft, they will be able to help catch the person who is causing the problems and bring them to justice. Some offer a guarantee that your identity cannot be stolen when they are in charge of monitoring everything.
Don’t let other people tell you about your financial situation. Use your credit score and credit report to learn more about what kind of consumer you are and what you are capable of achieving.
You should know your credit score and check the reports regularly.
Feel Free to See your Free Credit Scores!
This article about credit card scams was written by Les Roberts, investment researcher at Moneysupermarket.com.
Most people these days own a credit card and used correctly and carefully, they can be invaluable for making purchases online and in store.
There are excellent offers and rewards associated with the many credit cards on offer and if you would like to know more about credit cards click here to find the best offer for you.
However, how do you know that your details are safe and you are not leaving yourself open to fraud and online scams? There are some simple and straight forward checks that will keep you safe online.
- When you are browsing the internet, make some basic checks on the site you are using.
- A site that is secure will have the locked padlock symbol in the browser bar; always check that this is present before you give your card or bank details on the website.
- Some sites will claim to be part of an industry professional body; if they genuinely are a member of this organisation then the displayed logos will link you to the organisation’s website where you can check the credentials.
- A fraudulent site will merely have a picture or image of the organisation without the associated links. Using your credit card on a site such as this could result in a fraudulent use of your card.
- Two of the most important parts of your card details to keep secure are your pin number and the three digit code on the reverse security signature strip.
- Your bank will never ask you for your pin number and therefore neither should any other retailer. Unfortunately, that doesn’t mean that a scam cannot operate without it.
- The general rule of thumb is to make sure that you keep your card details secure when you are shopping online and indeed, when you are shopping in stores.
- No retailers will need to know your pin number under any circumstances and if you are ever asked for it, do not give the information. Contact your bank or credit card company immediately if you think your card details have been accessed by anyone.
- Some scams have been widely reported in the press including a recent occasion when an Acai Berry weight loss pill was offered on a free trial.
- Shortly after signing for the free trail, people discovered that their credit card had been charged without their permission or knowledge. Generally speaking, it is wise to be wary of free trial offers that request your card details.
- If you are asked for your card details, it is possible that either your card will be used fraudulently or you will be charged for the goods at the end of the free trial, without your knowledge.
- There are far more genuine retailers than scammers and do not be put off using the internet for purchases purely for fear of being a victim of a scam or fraud. Following simple guidelines and staying vigilant is key to keeping yourself safe.
- Avoid links and sites that you do not recognise or you did not intend to visit and be cautious of who to give your details to and the card details that are asked for during the transaction.
The following is a guest post about credit card mistakes from Odysseas Papadimitriou, the CEO of Card Hub, a Web marketplace for credit card offers.
You know how every once in a while you find yourself saying something along the lines of, “Man, I really wish I didn’t do that,” or “I wish I could go back and do that over”? That’s because none of us is perfect by any means, and we all make mistakes. However, isn’t it better to avoid making a mistake than to regret an action or wish for a do-over that you know won’t ever come? I, for one, would certainly say so.
So, without further ado, here are five of the most common credit card mistakes consumers make. Learn how to avoid them now, and you won’t wish you had a time machine like the guys from the Coke Zero commercials later.
Credit Card Mistake #1 – Grasping for Rewards
Everyone with a credit card wants to earn rewards with their spending. Rewards are fun, after all, and they make credit card use like a game, complete with points and prizes. People also just like to get free stuff. For many, it doesn’t really matter that it might take significant use to earn a free flight or a couple hundred bucks cash back; the prospect of “winning” such a prize makes a rewards credit card seem preferable to any other option.
However, if you don’t have excellent credit or don’t pay your bill in full each and every month, it really isn’t. First of all, you’re unlikely to be approved for any good rewards credit card without excellent credit. Furthermore, if you revolve a balance, you have needs that trump rewards.
While it might not seem as flashy or special, by foregoing rewards in favor of a low interest credit card, you can lower the cost of your debt or attain excellent credit as efficiently and cheaply as possible. Yeah, you might eventually get a free flight out of a rewards card, but you’ll probably also waste more money than the cost of that ticket in interest along the way or face a much more difficult road toward higher credit standing.
Credit Card Mistake #2 – Believing in the Unlimited
Believe it or not, credit cards that allow unlimited spending do not exist. However, Visa Signature, World MasterCard, and charge cards from Chase and American Express have become some of the most popular excellent credit spending vehicles because many consumers believe the No Preset Spending Limit (NPSL) feature means these cards have no limits.
In reality, NPSL only means that your credit limit is determined on a month-to-month basis and you might incur undeserving credit score damage as a result of the way these limits are reported to the major credit bureaus. Therefore, you must not believe in the unlimited spending vehicle and must avoid cards with the NPSL feature.
Credit Card Mistake #3 – Not Making Business Personal
Yeah, we all know the cliché—that it’s not personal, it’s just business—but what if business is personal? Not much imagination is needed here because business is personal when it comes to credit cards.
According to a Card Hub study, every major business credit card issuer follows the same policy of holding individual small business owners liable for business card use and reporting usage information to their individual credit reports. What’s more, despite how closely tied so-called business credit cards are to individuals, only Bank of America has given its business cards the CARD Act protection against increased interest rates being applied to existing consumer credit card balances unless an account is at least 60 days delinquent.
As a result, small business owners have two choices: use a personal card for purchases leading to a revolving monthly balance in addition to a business card or use a Bank of America card for all company spending. These are the only ways to enjoy both the debt predictability provided by a personal card and the unique business features of a business card.
Credit Card Mistake #4 – Misunderstanding Negative Information on Credit Reports
There are only two ways for negative information to be removed from your major credit reports. First, you have the right to protest false information and have it expunged. Other than that, time is the only thing that can bring about removal.
Therefore, while companies might market services that can remove information from your credit reports, this is impossible and they are scams. Most negative information from credit card accounts remains on your major credit reports for seven and a half years. Nothing can truncate this time frame. Nothing can extend it either. Therefore, it would be a mistake to believe that anything you can do can influence the presence of accurate information on your major credit reports.
Credit Card Mistake #5 – Falling Victim to Dynamic Currency Conversion
Given that overseas travel can be pretty overwhelming, when you get to the checkout counter, you might be inclined to accept a foreign merchant’s offer to convert prices into American dollars. It’s very important that you decline any such offer, however, because merchants charge high conversion rates for the supposed service in order to profit off tourists who don’t know any better.
So instead of paying much more than is necessary for everything you buy while aboard, just familiarize yourself with conversion rates in order to get an accurate sense of the cost of goods while aboard. It also goes without saying that a credit card with no foreign transaction fees is integral to lowering the cost of foreign travel.
The following in a guest post.
In the credit card world, one of the few things that can help you to pay off your credit card debt faster also happens to be one of the lesser understood and spoken about acts: balance transfers.
Balance transfers credit cards can be a tremendously helpful way for you to clear off your debt, because the idea of a balance transfer is that you transfer your debt from a credit card that has a lot of debt and a high amount of interest on it to a credit card that has a much lower amount of debt and interest on it.
By doing this, you will be receiving a lot less interest that you have to pay every month. It’s possible to go from an 8% interest rate down to a 1% or less interest rate by doing balance transfers with your credit card!
However, it’s not a one-time fix – your interest rates on the credit card that you’ve transferred you debt to will gradually increase over time. While it will be at least 6-18 months before your interest rates reach the level they were with your old card, the fact remains that it will eventually even out at the same level.
There’s also another catch to doing balance transfers: there’s a limit on how much you can transfer. While some cards will allow you to transfer as much as $20,000, others will only allow a couple of thousand dollars to be transferred, so check the fine print before you consider balance transfers.
With that said, if you’re looking at paying off your credit card debt faster, or you’re wanting to simply lower the amount of interest rates you’re paying, getting a balance transfer credit card is a very good idea. You’ll be able to pay off more debt, while still having more money in your pocket!
The following in a guest post.
We can anticipate the summer holidays and pay off the credit cards from Christmas, but the calendar marches on and waits for no one, and often summer holidays are here before we know it. Oh, we try to plan for it, but somehow it creeps up too fast. One minute the weather is awful and the summer season seems so far away, and the next thing you know the sun is shining, the birds are chirping and it’s time to enjoy the season. Problem is, if we’ve let the time get away from us, we’ve got big plans and no cash to back them up for a proper holiday.
Planning for a summer holiday might have slipped your mind, but if you have a credit card you can still pull it off. However, you want to do it the smart way so you don’t end up in real financial trouble. Here are some tips to having a great holiday without breaking the bank.
- Take advantage of the credit cards that offer air miles. If you do this all year, by the time the summer holidays roll around you will have enough air miles collected to fly for free. Just make sure you are familiar with the restrictions of the contract. Sometimes there are blackout dates or other restrictions that may impact your plans.
- If you plan on traveling by car, many credit cards offer rewards for petrol. This can really help you out, especially with gasoline prices soaring. With enough reward points saved up, you can offset this expense with a little left over.
- Some credit cards offer discounts or free nights at hotels with their reward program. Again, check the fine print for qualifications, restrictions and a list of participating hotels. Often, you can book a room for a lot less than you would normally pay.
- What’s a holiday without shopping? A whole lot less fun, that’s what. Check your credit card’s reward program for discounts on shopping excursions at a variety of shops and stores. You might be surprised to find your favorite shopping destination offers big discounts depending on what credit card you use.
- Compare credit cards to find discounts that suit your particular situation. Some credit card companies are offering 0% financing, which can really add up to significant savings. Why not try doing a credit card comparison, you may find you can get more money for your holiday. Consider a 0% balance transfer to free up even more options.
You might be caught off-guard by how fast the summer holidays approach, but that doesn’t mean you can’t plan and execute a fun experience. Check out all your options by scrutinizing what benefits your credit card has to offer, and then pack your bags and head out for a relaxing and exciting holiday without the financial worries. By utilizing the right credit card, you could have a vacation that actually pays for itself, and it doesn’t get better than that!