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Protecting Credit Cards

Credit Cards
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Credit and debit cards are very similar other than that credit cards are protected by a federal law that limits your liability for unauthorized transactions. Therefore, it's generally best to use credit cards given a choice because you won't be liable for unauthorized charges (and have a variety of other protections as well. Still, it's not fun to have to replace a credit card so here are some tips to keep them out of the hands of bad guys:

Watch for skimmers

It's not incredibly likely that restaurant servers or other store employees will use a handheld card skimmer, but if you're worried, you can ask to pay at the register. Much more likely is to find a card skimmer "in the wild"; usually attached to a credit card system of a gas pump. Always look for loose or mismatched pieces where the cards would be inserted. Go ahead and give it a firm tub and shake just to see if something comes loose (and if one does, call the police).

Cross out your card number on receipts

This shouldn't be a problem anymore, but I still find stores now and then that have really old credit systems where it's a good idea to make sure the full credit card number isn't visible on the receipt. If it is, scratch it out and if the store/restaurant employee complains, just remind them that printing the credit card number on a merchant copy is against federal law:

According to the federal Fair and Accurate Credit Transaction Act (FACTA), the electronically printed credit and debit card receipts you give your customers must shorten — or truncate — the account information. You may include no more than the last five digits of the card number, and you must delete the card’s expiration date.

Don't let online companies store your card

It's simply a matter of odds. The more places your card is stored online, the more likely it will be caught up in a breach. If you don't shop somewhere often, decline to store payment information.

Use Virtual Cards

If your bank has this feature and you wish to make a purchase with a store you don't know or trust yet, use virtual credit cards. These are one-time use numbers attached to your real credit card, but using a number that's only good under certain restrictions (like a limited number of transactions, specific time span, one-time use at only one store, etc.).

Avoid contactless pay systems

The last thing you should have to worry about is your credit card being accessed remotely without your knowledge, but the wireless chips used in some cards make that possible. For example, the EZ-Pass system uses an RFID chip that can be read and easily copied from hundreds of feet away. Once copied, someone can go through the tolls while leaving you with the bill. If a system doesn't require any physical contact, just proximity, then you're probably using RFID and you're at risk (this is not the same as chip cards that still require actual mechanical contact and can't be waved over a reader to pay.

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Got Credit Fraud?

Credit Cards
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So last night I get a phone call saying they're my bank and asking to verify information. As you should always do under such circumstances, I refused and asked for a number where I could call her back. When she provided it, I looked it up online, but found nothing. So I called the bank at a known number and they were able to confirm it. Phase one complete.

Next I was transferred to the Credit Card Fraud department where they explained that I had unauthorized charges. My wife and I have always used our credit card as a shield for places that we didn't fully trust or online stores. Now that was coming in handy.

The sad fact is that there's nothing you can really do to protect a credit card number other than not use credit cards, but thanks to strong federal regulation instead of bogus "self-regulation", it was a very smooth process.

She read me the last 10 or so transactions and I claimed the ones that were mine and told her that the $300, $400, and $80 charges weren't. Despite that being a lot of money, by law I'm not responsible for any of it.

The charges will be reversed and new cards will be issued though not as fast as I'd like. I'd like to be angry, but at who? There's no telling how they got the number or how long they've had it. At the best, you should try to protect your card as much as possible, but don't take it personally when and if this happens to you.

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Top 10 Things You Should Know About Your Credit Cards

Credit Cards
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I've seen businesses do 4 and 5 so I guess next time, I'll call them on it.

  1. Unsigned Cards Are Not Valid And Merchants Can And Will Refuse Them
  2. The Maximum Liability For Unauthorized Use Of A Credit Card (not debit even if it's got a credit card logo) Is $50 According To Federal Law
  3. Merchants Cannot Require You To Present ID, Unless Your Card Is Unsigned
  4. Merchants Cannot Require A Minimum Transaction Amount
  5. Merchants Cannot Charge A Surcharge For Using A Credit Card, However, They Can Offer A "Cash Discount"
  6. Many Credit Cards Have Programs That Will Automatically Double The Manufacturer's Warranty And Other Excellent Benefits
  7. Merchants Are Not Allowed To Make You Give Up Your Right To A Chargeback
  8. Merchants Are Not Allowed To Place A Hold For The Estimated Tip
  9. If Merchants Suspect You Of Fraud They Are Supposed To Call With A "Code 10"
  10. If Merchants Break These Rules, You Can Report Them To The Credit Card Company
  11. Read the details for each of these at The Consumerist.

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Credit Card Companies Swing Low to Stop Testimony

Credit Cards
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Four people who had flown to DC to share their stories of credit woe with the congress members who are involved in the credit card bill of rights were deflected by a mandate by the committee that they must release their full financial history to the public (not just to the people involved in the committee, but the PUBLIC) before they could testify.

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Fight Unauthorized Charges

Credit Cards
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It's worth repeating that if you get charged for something you didn't ask for, you should challenge it. One point this article makes that I want to stress, sometimes you get signed up for something because you didn't notice and uncheck a box during a transaction with some other company or you had a free trial and it charged you after it was over.

These are dishonest and while they might technically be legal (though they shouldn't be), it's worth challenging them all the same.

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5 Expenses You Should Cut Until Your Credit Debt is Under Control

Credit Cards
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This is a nice article explaining the five major monthly bills you should be ditching until you are debt-free (on your credit cards and accounts anyway). Included is the whining they know you'll do when you hear their recommendation:

5) Cable. Your Excuse: "But, but, but I need cable! I get a good deal! It's only $100 a month! I use it a lot! It's bundled with my phone and my internet. I'll only save $30 a month if I cancel it."

It's really sad how well the marketing has worked that people believe they really need and use this stuff. I have never had cable TV service. You can rent the best shows in the stores, borrow them from friends or just watch it with a regular antenna (for stuff that comes on the major channels). A lot of new shows are available from the networks directly on the Internet anyway.

The one service they forgot to mention was cellphone. Most people probably forget that it's just a convenience, not a necessity.

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Confessions of a College Credit Card Pusher (Wanna Free Shirt?)

Credit Cards
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If you've been on college campuses these days, you'll often see the booths where you get a free shirt or coffee mug for signing up for a credit card. Well, it's pretty obvious that college kids have no idea how to handle credit and the credit card companies know it.

Rhoades took the job and signed up roughly 30 students for cards. He regrets any trouble he caused other students from his actions. Still, his actions may have been most damaging to himself. He ended up with $13,000 worth of debt that he is now struggling to repay.

We don't get any training how to deal with and manage credit, but we get plenty of training on how to get and abuse it.

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Ask for Non-RFID Credit Cards

Credit Cards
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The Consumerist reports that one of their readers asked for a non-RFID credit card from American Express. Granted, they only disabled contactless transactions in their database and did not issue him a spychip-free card, but one of the commenters said that they were able to do so with Washington Mutual.

It never hurts to ask, but it can certainly hurt to not.

Of course, you could just physically disable the RFID with a hammer, drill, or knife.

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Credit Reporting Companies Ruled Against in Recent Case

Credit Cards
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If you have an outstanding debt that you eventually decide to make good on, you may get penalized. The "Date of Last Activity" field on your credit file will get updated if you make a single payment making it appear as if your delinquency was yesterday instead of 3 years ago.

This practice has been challenged and it seems that the consumers are winning.

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Credit Card Companies May Get Slapped by Congress

Will Congress act on a predatory credit card industry?
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Consumeraffairs writes that congress may take a look at the credit card industry and how it's been hurting consumers for years. They talk about the practice of assessing fees for anything and everything, but don't forget about those difficult to understand agreements:

"Anyone who has ever tried to read a credit card agreement knows that the terms are simply incomprehensible," Warren said. "The inserts sent along with monthly bills to amend the card agreements are filled with language even a lawyer would have difficulty parsing."

It's as this point that some would say "well, if you don't understand it, then don't sign it". That's great in theory, but how many things in life actually work that way? Do you completely understand all the terms and conditions when you bought your car? Bought your house? Signed up for your last web service? People have a right to simple to understand terms and conditions for everything they do. Not everyone is a lawyer and even they don't want to read pages and pages of crap just to open an account with a retailer.

Most of all, the expert witnesses emphasized the willingness of banks to lend to just about anyone as a prime reason for the explosion in consumer credit card debt.
This is called "Predatory Lending" and is similar to sending wine-of-the-month brochures to a list of Alcoholics Anonymous attendees.
"To make the assumption of debt more attractive to these households -- and to entice them into carrying debt for longer periods -- creditors lowered minimum payment balances from around five percent of principal to just over two percent," Manning said.
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