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When a person acquires a credit card, the card owner faces very tough responsibilities he should face. The user should learn to use the card responsibly by not over charging it or using it to get much cash advances. Aside from using the card discreetly, the user should also make ways to prevent fraud. Here are some ways that will help protect you against frauds.

Protection Against Credit Card Fraud:
•    Immediately sign the new cards. If the card you requested is a replacement, sign it and then discard the old one by cutting it up to smaller pieces.
•    To prevent criminals stealing your identity by looking at the garbage bin for credit receipts. Try to shred all your credit receipts, unneeded documents with your social security number or other sensitive personal information.
•    Try not to fax your credit card number. The reason being that there is a chance that after you have faxed it, it will just lay down on the other end and people passing by will see your number. There might also be a technology now in which your card number may be intercepted.
•    Be very careful when giving your credit numbers online or via phone. Only give your numbers to people who you will transact with that you trust very much. It doesn’t matter if the other party has a very proven track record. The important thing is that you trust the person to give your number.
•    There might be some legitimate unannounced calls that will ask for your number, don’t give it to them.
•    If you are going to transact online look for addresses that begin with https:\. This means that the connection is secure. There should also be a small padlock that should appear at the bottom right hand corner of your screen. This indicates that it is safe to transact. However you should still be wary, because hackers could still get your card number.
•    If you suspect trouble immediately call the credit card company. All of them should have a 24 hour hotline to help out the customer when he or she senses trouble. Much fraud happens within the first hour or so, if you lost your wallet or purse, immediately call the credit card company’s hot line. After you make the call the credit card company will block all transactions. This will help prevent further lost of money from your account.
•    There are now various features that will provide added security. I.e. of these new measures is that your picture will be included in the card.

Tags: Budget, Debit, Credit, Credit Cards, Master Card

Credit cards are a great apparatus that have been given to shopaholics. Aside from being able to prolong the payment of an item, the card user can also get cash advances when he or she is in desperate need for some liquid assets. Even though credit cards provide a short temporary happiness for shoppers, they should be used smartly. If one over uses his or her credit cards the card owner may experience more problems rather than satisfaction. One of those pitfalls for a credit card user is advancing too much cash. This article will help explain the pitfalls of using credit card too much to advance cash.

•    The interest fees of cash advances are higher than charging a certain item you have purchased. The percentage can be computed 2 ways, either on a percentage basis or on flat rate fees. Percentage basis usually has rates of around 1% to 4%. Flat fees are not based on the amount of money of you have withdrawn.
•    There is an emerging trend of combining both methods that’s why the rates end up higher. I.e., the card company can give you the money based on interest rates of x% but should have a minimum of $10. Red the terms very carefully because the fee computation is very tricky.
•    Avoid using ATM’s when getting cash advances because ATM’s charges an additional fee for advances. This fee is charged by the financial institution that owns the ATM.
•    The finance or interest rate charge that you get from having cash advance is the biggest pitfall. The interest rates are usually around 20-25% compared to the 15.88% to 17.30% of credit card purchases. There are some that issue the same rates for cash advances and card purchases.
•    The borrower might think that he or she will be given grace periods. When he borrows the cash his or her cash advance will be immediately accrued. There will still be a charge that you will still need to pay even though you immediately pay your cash advance when the bill arrives. The finance charges and interest rates will be very high when you still have a balance that you have not paid when you used your card to purchase something. This happens because most credit card companies apply the payment to purchases first before the cash advance.
•    Credit card checks that you receive are considered cash advances.
•    Try to get some help from debt counselors when you rely too much on cash advances for money.

It may be very tempting to get cash advances but remember for everything good that you receive there is always a much worse payoff.

Tags: Credit Card Traps, Master Card, Spending Money, Debit, Credit Cards

The Christmas season is once again all over. After all the happy exchange gifts and all the eating one would now need to worry about paying his or her credit card bills. The person who probably over burned his credit card just wishes that he or she got money to pay the bills. Well, now it’s just too late, but you can still gear up for next Christmas. Here are some tips on how you can reduce your credit card debt.

1.    It is important to be aware of the interest rates that your card has. High rate cards will definitely hurt your pocket and probably your head as well. I.e., if the card holder has the average balance of $2,500 and a purchase rate of 19.99%, the credit card holder will pay $1,000 in interest for two years. It would seem almost half of the average balance. If the rate was lowered to 8% the interest payment will be $400. The difference of $600 is definitely big.
2.    Try to avoid cash advances because the rates are higher and will hurt your wallet more.
3.    There are some companies that will entice customers by giving “introductory rates or teaser rates.” These rates are very short lived, but if you are very savvy you can manage to do some tricks that will prolong the grace period.
4.    When looking for cards, try to look for those that have longer promotional period about 6 to 12 months for balance transfers.
5.    If you have more than 1 card with available credits, you may transfer the balances to be able to continually avail of the promotion. This is called transfer rates or card dumping.
6.     If you have good credit history, you may try to ask the card company to extend the promotional rate.
7.    Be aggressive when dealing with credit card companies. Try threatening them with paying off your given card, because this will put you in a bargaining positioning.
8.    Avoid only paying the required monthly requirement of card companies. If you have an outstanding debt of $3,000, avoid only paying the required $60 monthly. It would only hurt you more because it would take 8 years to pay with an interest of $2,780.
9.    There are some companies that will immediately start the grace period when you have purchased the item and when the billing statement arrived. Avoid them.
10.    Try to get help from Credit Counseling Services when your credit card debt reaches $2000.  Organizations like these provide debt analysis and would require only a few minutes. They will negotiate with the credit card company to lower the interest rate by 50%. These programs also help prevent you from ending up bankrupt.

Tags: Credit, Spending Money, Visa Card, Budget, Credit Card Traps

Some people are so compulsive when shopping even though they have lack of money. Thos people will tend to drool and salivate when they are only able to window shop. That’s why institutions decided to create the credit card.

This apparatus was created to help people without cash to use the card instead. To some people, this will be the perfect thing to satisfy their demand. However, because they tend to be so eager of the credit card there are some traps or pitfalls that they will tend to overlook and pay bigger for their mistakes.  This article compiles all the common traps that credit card users often fall into.

1. Universal default clause – this trap allows the credit card company to raise the interest rate you have all of a sudden if you o not pay your bills on time or have been starting to get bad credit reports. The bad thing is they will monitor your credit report. From the 0% interest rate they will hike it to 24.99% with one slip up.

2. Finding a fixed rate credit card is very rare. The bad thing about it is, even if you have been given a 15 day letter that the rates will increase after, the interest rate hike will immediately take effect the following day. The existing balances and purchases you have already made will also be subjected to the interest rate hike.

3. Late fees are becoming stricter. If you are not able to pay the late fees on a certain deadline time, the fees will be outrageously high. If you also go over the limit of the deadline of payment the penalty fees will also hurt you.

4. A 1 to 2 percent foreign currency charge is also charged to foreign travelers on their purchases. These fees are not illegal, but they should have explained and notified the foreign travelers about this fee.

Based on the consumer’s annual survey about credit cards, here are the results.

1. In a period of 6 months to a year the interest rates of credit cards are dramatically increased because of 1 or 2 late payments.

2. Credit cards that make you pay late fees amounting to $35 has doubled.

3. When you are just starting to use the card the interest rate is only 2%, eventually the interest rate will increase after the first few months.

4. Most credit card firs will not show their annual percentage rate until their credit report has been properly screened. Instead they give meaningless rates which make it hard to compare other credit card companies.

Tags: Credit Card Application, American Express, Budget, Master Card, Credit Card Traps