Tips for Successful Personal Finances
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Five
Have you ever received a credit card bill with a Sunday due date? Were you charged a late fee if they didn’t process the payment until Monday? That’s changing with the new Credit card Act of 2009. Your payment won’t be marked as late if it’s due on a weekend or holiday, but posted by the next business day.
The New Credit Card Act of 2009 takes effect on February 22, 2010. To help you prepare, my blog will feature Nine Tips over the next three weeks.
Tip Number Three
In the past, you wouldn’t know if a purchase put you over your credit limit until you received a big fee on credit card statement.
But that’s changed. Now, if a purchase will put you over your climit, your purchase will be declined. With the new Credit Card Act of 2009, only pre-authorized purchases will be approved.
(Remember, this doesn’t apply to your debit card. You’ll receive no warnings if a purchase will overdraw your checking account. )
Credit Card Shaving – it sounds like what you would say if you were cutting back on your credit cards, but that’s not what it means. This is the latest credit card scam and there is nothing you can do to prevent it. Isn’t that scary?
Credit Card Shaving Q & A
How do they get your credit card number? They get it through guesswork, not by theft. The thief makes a random list of 16 digit numbers. Then he tries to make purchases online with different combinations. If one works, then he knows he has a legitimate account.
Why is it called “Credit Card Shaving?” The thief literally shaves the raised numbers off of other credit cards (usually cheap gift cards) and glues them onto a new card in the correct order. The card looks legitimate. He can even use his own ID to prove the card is his.
How does he change the magnetic strip? The thief doesn’t need the magnetic strip, he just “scores” or scratches it so it can’t be used in the automated stripe reader. This forces the cashier to manually enter the numbers that are glued to the card.
What can you do about it? Always monitor your accounts. Check statements for unusual purchases. If you can access your accounts online, you can check more often.
Is it time-consuming to monitor your accounts? We treat credit cards like pre-approved micro-loans, or feel they’re safer than carrying cash because they can be canceled if stolen. In reality, the more cards you have, the more work is required to watch over them.
Which saves you more money: a debit card or a credit card? Most people believe debit cards are cheaper because there’s no interest rate or annual fee. But what about overdraft fees?
Debit card overdrafts are now the biggest source of revenue for banks. The danger with debit cards is twofold: One, the transactions hit your account instantly and two, very few people keep track of their debit card transactions in a check register.
Debit cards are convenient and fast. We use them for everything from buying $200 worth of groceries to $1.50 take-out coffee. The problem is that we aren’t notified at check-out if our account is overdrawn like we would be if we had maxed out a credit card. And overdraft fees are expensive – approximately $30 per transaction. Some people have found themselves with $60 – $1,00 in overdraft fees in a single day because they continued to use their debit card while their account was overdrawn.
Please, take a moment to record your debit card purchases. Remember, too, that debit cards hit your account instantly but deposits don’t. If you deposit a check and use your debit card on the same day, the debit card transactions will hit your account before your deposit clears.
If you share a credit card account with someone else, you are either an authorized user or a joint credit card user. Knowing the difference can help protect your credit score.
If you’re an authorized user, it means you can use the credit card account, but you’re NOT responsible for the payments. You have a card with your name on it, but you’re not the “card-holder.” The account won’t appear on your credit report, so it won’t help, or hurt, your credit score.
In the past, parents could add a child as an authorized user. This helped the child start his credit history, making it easier to get that first car loan or student loan. Because of some abuse, credit reporting agencies stopped monitoring authorized users. It’s now more difficult for children to begin building their credit history, but not impossible.
If you’re a joint credit card user, you and the other person were considered equally when you applied for the account. You are both responsible for the payments and the account will show up on both your credit reports. Joint card-holders should make a habit of reviewing bills and payments together to help protect you both from mistakes or fraud.