07.29.2008 | 5:49 pm | credit cards
In the past, credit card fraud and identity theft happened when thieves stole wallets, rifled through bins to find information, or even when unscrupulous waiters wrote down card numbers while processing restaurant payments. But as technology has advanced, a new menace has raised its head. What is it, and – more importantly – how can you avoid it?
Skimmers are a potential problem for anyone who owns a credit card. These devices mimic legitimate credit card swipers on chip and pin terminals. When a card is swiped through the reader, the card number, account holder name and address and sometimes the PIN are stored so the thief can access it later. This information is used to make cloned credit card for fraudulent purchases.
Amazingly, credit card skimmers can be bought easily online. Aspiring thieves only have to shell out a couple of hundred pounds and team up with counterfeit credit card makers, and they are well on their way to fleecing innocent card holders.
Credit card skimming costs companies millions of pound each year, so it is a massive problem. The best way to avoid falling prey to credit card skimmers is to make sure that you see all transactions happen in front of your eyes. Don’t let waiters or bar staff take your card out of your sight, and check for anything out of the ordinary when you use an ATM or ticket machine.
Make sure that you check your credit card statement carefully to see if any fraudulent payments have been made. If you notice anything out of the ordinary, report it to your credit card provider immediately.
07.23.2008 | 4:48 pm | credit cards
Paying off credit card debt with 0% interest is the perfect scenario, which is why many credit card companies offer such promotions. They know it will attract new customers who have debt with other credit card companies to transfer that debt to their cards. But where is the value to the company offer the credit card balance transfer offer; if they let you repay that debt with 0% interest?
Whenever you see credit card promotions that sound like they’re going to be a good deal for you, it’s best to look into them closely and make sure you read all of the small print. A 0% balance transfer is usually good for a specific length of time – normally six or twelve months. If you have several thousand pounds of debt on a higher interest credit card and take advantage of a 0% balance transfer offer for twelve months, the credit card company is betting on you still having a balance once the promotional period ends. When the six or twelve months of no interest repayments end, the balance will start being repaid with interest.
Remember to check what the interest rate will be after the promotion ends. If you’re moving a balance that you are currently paying 9% interest to a card with an interest rate of 19% after the promotional period ends - unless you are able to pay it off completely during the 0% interest period, you are not likely to benefit financially over the long term. You would have to start looking for another 0% balance transfer offer, or pay the higher interest until the balance is paid off.
Another thing to bear in mind is that most credit card companies charge a transfer fee. This can range from 1% to 5% of the amount transferred. There are some cases where the amount you pay for the balance transfer fee will result in more money paid than if you had just kept your balance on the card it was on and paid interest. To ensure you’re actually getting a good deal, you’ll need to play with the numbers and decide how much you’ll spend for the life of the balance if you keep it on the card it’s currently on.
Interest free balance transfer offers are also only good as long as you make your payments on time. This is something to bear in mind if you have difficulty keeping up with your payments, because if you are late you can lose your 0% interest rate and start paying a much higher interest rate.
In order to make balance transfer fees work for you financially, it’s better to find a low interest balance transfer offer that is fixed for the length of the balance. If you can transfer a few thousand pounds from a credit card with 9% interest or higher, to a card with 1.99% or 3.99% fixed interest on the balance transfer for the life of that balance, you will save hundreds of pounds in interest and actually make out better than the 0% offers (provided you know you can’t pay off the entire balance before the 0% offer ends).
07.15.2008 | 3:00 pm | credit cards
A time when credit card are especially useful is when you’re travelling. If you’re going away on business, credit card make it easy to track your expenditure so you can claim expenses and tax-back. If you’re travelling on a vacation a credit card is often necessary to book hotels and car hire, and you may be able to get a better exchange rate when you change currency.
But you’ve still got to be careful. Here are some tips for a smooth journey with your credit card:
Better Safe than Sorry…
Make sure you have your card cancellation phone numbers written down and stowed somewhere about your person when you are travelling. If the worst case scenario happens and your card is stolen, you’ll be able to sort it out as soon as possible.
Spread the Load
If you’re travelling with your partner or family members, it’s a good idea to have your credit card on different accounts. This is because all cards on an account will be cancelled if one is stolen or lost.
Make Note of Your Card Use
Save all your receipts and keep track of where you used your card. You can check these against your credit card statement when you get home to make sure that no suspicious transactions have been made.
Beware of Extra Fees
Lots of banks charge a conversion fee on transactions made abroad, usually 1% of the purchase amount. Make sure you check with your credit card provider before you travel so you won’t get any nasty surprises when you see your statement.
07.7.2008 | 12:05 pm | credit cards
If you shop in department stores or clothes shops you’re probably familiar with the routine when you get to the till. Would you like to take out a store card? Great discounts on future purposes, and 15% off your transaction today. Sounds tempting. Many store cards come with a raft of incentives – in store offers, money-off bonuses – but are they a good idea?
The brief answer is no.
With Britain in the grip of a credit crunch, households are feeling the pinch and any extra debt is felt more than ever. The main reason for avoiding store cards is the exorbitant interest rates - around 10 to 20% higher than the average credit card. This is okay if you pay off the balance within the interest-free period (usually between 35 and 55 days). As with any credit card, it is the unpaid balance that proves problematic when interest starts to mount.
Taking out store cards may also adversely affect your credit rating, as the more cards you apply for, the worse your rating will be.
Many people fall into store card debt because of the way they are promoted. Shop cashiers with little or no financial experience push frazzled shoppers into signing up, with no explanation of the implications. Teenagers and young adults are especially susceptible to this.
So if you’re going to use credit, it’s best to use a regular card which won’t accrue ridiculous amounts of interest.
07.1.2008 | 3:36 pm | Uncategorized
You may have heard of pre-paid credit card. Also known as secured cards, they offer many of the advantages and benefits of a regular credit card without the risk of overspending and getting into debt. In the current credit crunch, it’s definitely worth thinking about.
So what does it involve? Think of it like a pay as you talk mobile phone. You load the card up with credit, and away you go. Here are some of the advantages to having a pre-paid credit card.
* No debt – it’s impossible to get into debt (one of the biggest risks of a regular credit card) because you only spend the money you’ve put on the card.
* No interest – this is a massive incentive, as the credit on a regular can soon mount up.
* Versatile - pre-paid cards can be used online, in shops, over the phone… In other words, exactly like a regular credit card.
* Safer - a pre-paid card is safer than carrying cash.
* Ease of approval – unless you’ve been involved in fraud, you will almost definitely be approved. This goes for under-18s too. Applying for a pre-paid credit card won’t affect your credit rating either.
So if you’re thinking about getting a credit card but don’t want to run the risks that a regular card presents, think about going pre-paid. Find the best deals at CreditCardExpert.co.uk.
