91% Of Us Have Taken Steps To Protect Against Identity Theft

MoneyTips

In September 2017, America learned about the massive data breach at the credit reporting agency Equifax that affected approximately 148 million consumers – one of the largest breaches ever. Identity thieves suddenly acquired a new batch of Social Security numbers, names, addresses, phone numbers, and other personal information.

Consumers were advised to take steps immediately to protect themselves against identity theft. Did they heed that advice? A new survey from CompareCards.com shows that the vast majority of Americans (91%) took at least one protective step against identity theft while the average American had taken at least three steps.

The most cited protective steps were reviewing online bank and credit card statements more often (65%), checking credit scores (51%), and setting up alerts to notify users when charges were made to their accounts (50%).

Top Benefits Of Credit Cards

MoneyTips

What’s the benefit of having a credit card? That’s easy – it allows you to buy things with money you don’t currently have. (Of course, that may also be the biggest drawback of having a credit card, if you can’t control your spending.)

All credit cards allow basic purchases, but what specific benefits draw you to choose one credit card over another? A recent survey and report by Market Strategies International digs into the specific features that users prefer. Their #1 choice? No annual fee.

Given that 80% of card users aren’t clear about the benefits of their existing primary credit card, card issuers are better served by focusing on the top perceived benefits. The report suggests that card issuers must focus on the “must haves” and not depend on narrower benefits (listed in the survey as “tailored extras”).

Eighteen different credit card benefits were ranked and categorized into tailored extras, cost and value-related benefits, or baseline items that m…

Credit Freeze Vs. Credit Locks

MoneyTips

Thanks to large data breaches in recent years, both credit freezes and credit locks are gaining in popularity. What’s the difference between these two important identity protection tools, and which one is the best for you?

Both tools stop lenders from accessing your credit information – and lenders won’t extend credit if they can’t assess the risk that you won’t pay them back. In both cases, you can remove the tool to make legitimate credit applications and reapply the tool when you’re done. You have to apply either tool with each of the three credit bureaus (Equifax, Experian, and TransUnion) to receive full protection.

However, there are a few significant differences between credit freezes and locks.

Credit bureaus are required by federal law to offer credit freezes. Each freeze and thaw at each credit bureau used to have a fee set by individual state laws – but as of September 21, all credit freezes are

Credit Through History

MoneyTips

It may seem like you have been paying credit card interest since 3500 BC – but you might be surprised to learn that credit actually dates back to those ancient times.

Historians believe that the Sumerians of ancient Mesopotamia (in modern-day Iraq) extended credit to farmers in the rough equivalent of a consumer loan. The time lag between buying seed and harvesting grains to sell required up-front resources – just as it does today.

The first laws regarding credit were established in Babylon in 1800 BC. The Code of Hammurabi established formal contract rules for loans and caps on interest rates – perhaps an early form of consumer protection. To be enforceable, loans required recording and witnessing by a public official. Interest rate ceilings were high – 33.3% annually on grains and 20% on silver.

The concept of credit and interest continued through the ages, with occasional detours. For example, during Charlemagne’s rule in 768-814 AD, the charging of …

We Prefer Using Cash Over Credit For Small Purchases

MoneyTips

Do you use your credit card for most purchases? Are there times you prefer paying with your debit card? Perhaps you still use those funny green paper rectangles with numbers on them?

Cash hasn’t been forgotten, especially for smaller payments. A new study by CreditCards.com shows that 45% of consumers who have rewards credit cards still prefer to use cash for payments below $10. Even debit cards are more popular than credit cards on small payments, by a 30% to 23% margin.

This finding is consistent with previous data from the Federal Reserve’s Diary of Consumer Payment Choice (DCPC). In 2016, the DCPC found that 55% of all payments of $9.99 or less used cash, while cash prevailed for 35% of purchases between $10 and $24.99 but only 19% of purchases from $25 to $49.99. The CreditCards.com study agrees, showing that $25 is the median tipping point for using credit for purchases.

Why wouldn’t you use a credit card for all purchases when you get rewards fro…

Chips Cutting Counterfeit Credit Card Fraud By 75%

MoneyTips

EMV cards, otherwise known as “chip” cards for the embedded information chips they contain, were touted as the next great advancement in credit card security. According to a new study from Visa, EMV cards have lived up to their promise.

Visa discovered that as of March 2018, counterfeit credit card fraud is down 46% for all U.S. merchants compared to September 2015 – but for merchants who have completed the upgrade to EMV chip readers, counterfeit credit card fraud is down 75%. That’s a significant improvement over 2017’s 50% decrease from 2015 fraud levels.

Decreasing fraud correlates with the greater acceptance of EMV cards. As of June 2018, 3.1 million merchant locations – approximately two-thirds of U.S. storefronts – accepted chip cards for payment. Fewer than 400,000 merchants accepted chip cards in September 2015.

Visa claims tha…

Why A Credit Freeze Won’t Prevent Identity Theft

MoneyTips

We all like getting things for free, especially when the free items or services are valuable. Thanks to legislation that was signed in May 2018, Americans have another free service that they can use as often as they like – applying for a credit freeze. As of September 21, 2018, it no longer costs money to freeze or thaw your credit.

A credit freeze stops any potential lenders from accessing your credit report. If a lender can’t assess your risk, they won’t lend money to you – or to an identity thief pretending to be you. When you want to make a legitimate credit request, you “thaw” your account for as long as you need to get your credit source approved, and then re-apply the freeze.

Simply place a credit freeze with each of the major credit bureaus (Equifax, Experian, and TransUnion) and you’re all set … right?

Unfortunately, it’s not that simple. Identity thieves have man…

Racking Up Debt? Blame Your Parents!

MoneyTips

Parents, be careful how you act around your children. Children may listen to what you say, but they’ll be more influenced by what you do.

This maxim also appears to apply to attitudes toward debt. According to a study recently released by the National Bureau of Economic Research (NBER), children have a strong tendency to follow their parents’ attitudes about debt.

The study, which took place in Sweden, found a strong correlation between the attitudes of children and parents regarding debt – although the study also found attitudes to be changing over time. While 56% of respondents claimed to be uncomfortable with debt, 62% said their parents feel uncomfortable with debt.

Women were more uncomfortable with debt than men in both generations, yet both men and women were more likely to discuss their financial situation with their mothers instead of their fathers. Consequently, the correlation for transmitting debt philosophies to children was greater for wom…

Households With Lowest Net Worth Have Highest Credit Card Debt

MoneyTips

America’s total outstanding balance on revolving credit, primarily credit card debt, is over $1.03 trillion. How much of that $1.03 trillion balance is yours? According to recent data from ValuePenguin, you’re more likely to have a greater share of that balance if you’re in one of two groups – the poorest or the wealthiest Americans.

The average credit card debt for households with zero or negative net worth is $10,307 – not surprising since if you have a negative net worth, you need credit just to get by. On the other end of the economic spectrum, households with net worth above $500,000 carry the second-highest average credit card debt at $8,139.

Why would high-net-worth households carry so much credit card debt? Perhaps for one simple reason – because they can. Wealthier households are more likely to make more purchases and to pay off balances whenever they choose to do so.They may run purchases through their credit cards to get rewards or other perks even whe…