Going on holiday or business to Spain, France or Italy this year? Then watch out for a new ploy to overcharge your credit or debt card.
Many restaurateurs and retailers in these countries now have the facility to get you to authorise your bill in euros but then they recharge your card in sterling. That sounds innocent but there's a sting in the tail. The retailers charge you an additional service fee of up to 4%! The system is called dynamic currency conversion (DCC).
DCC guidelines from Visa say that UK cardholders should be offered the option to either have their card charged in euros or to have the transaction changed into sterling before it goes through. It seems that in practice, few of us are being offered the alternative. Many retailers are charging us in sterling automatically - and with the extra 4% fee!
The language barrier might explain the lack of explanation but we are a little more cynical! Even where permission is sought, we doubt whether many restaurateurs or retailers will clearly spell out the additional service fee. After all it's an opportunity to make a bit more profit!
Our advice is that when abroad in euro-land always ensure that your transaction is processed in euros. That's because some UK card operators such as Nationwide, Saga and Lombard Direct will convert euros to sterling at no charge. Others, such as cards from our high street banks, will charge 2.75% as a foreign currency loading fee – but even that's less than the retailers' 4% DCC.
In fact even with a 2.75% foreign currency loading fee, it'll still be cheaper to use your credit card rather than converting sterling to euros before leaving the UK or converting it abroad at the bureau de change. That's because the exchange rates applied by Visa and Mastercard are often much better than you'd get for your cash and travellers cheques whilst abroad. And please don't be fooled by the commission free advertising outside the bureau de change. They might not charges commission but their currency rates are never cheap – after all, how else do they make a crust?
And another bit of helpful advice. Unless it's an emergency don't be tempted to use your plastic to withdraw euros. That's because as with all cash withdrawals, interest will be charged from the minute the euros leave the cash dispenser. Remember, there's never any interest free period on cash withdrawals.
And whilst on points to remember, please be especially vigilant about card security whilst abroad, especially if you're travelling in Eastern Europe. Card fraudsters love holidaymakers and business travellers. That's because they're able to enjoy a bit more time with the card before the card is blocked. Chip and pin technology has helped enormously but there are still risks to watch out for. A report we read last week serves to highlight the problem.
Mr & Mrs B were on a weeks' break in Prague when Mr B's wallet was stolen by a pickpocket. It was greatly inconvenient and not a little distressing, but they thought that their chip and pin cards would protect them. Imagine their horror when they returned to the UK, to find that within three days of losing the wallet all their debit and credit cards had been raided for thousands of pounds. How could that happen?
It's a fairly common fraud. A trained spotter had watched and recorded the pin number they used at a cash machine and a pickpocket had followed them from the machine to steal their wallet. Armed with the card and the pin number, the fraudsters were in for a field day. That's because this couple, like 1 in 3 cardholders, used the same pin number for all their cards. Naturally, knowing the 1 in 3 statistic, the fraudsters tried the pin number they knew on all the cards in the wallet. Hey presto, bonanza time!
And yes, it does also happen in the UK.
So, two lessons here. Be particularly careful when entering your pin numbers anywhere - not only abroad. Secondly, don't use the same pin number for all your cards. Work some way o remembering them. For example, use the first, second, third and fourth digits from each of the number clusters on that card or some combination like that. Or if you have a better memory than me, memorise a pin for each card!
With the ever rising reports of credit card fraud, fraudulent use, internet phishing and identity theft, people are rightly concerned about credit card security. Fraudulent credit card use can be an annoyance at best, and seriously damage your credit at worst. It's only reasonable that people have questions about credit card security and authentication methods. Here are some of the most frequently asked questions about credit card security.
1. How does the ATM or store terminal know my PIN number?
PIN (personal identification numbers) are the most often used way to authenticate your identity when you use your credit or ATM card. When you first choose your PIN number, it is 'encrypted' - stored in a secret code of letters and symbols - and either stored in a database or on the magnetic stripe on the back of your card.
2. If my PIN number is stored in a database, doesn't that mean that bank or credit card employees have access to it?
The encryption method that's used by ATM and credit cards is called 'one-way encryption'. It makes it easy for the bank's computer to verify the PIN given the bank's key and the PIN, but nearly impossible to extract the PIN in text form from the encrypted database.
3. How does the machine 'read' my card?
The stripe on the back of your credit or ATM card is called a magnetic stripe. It's actually made up of thousands of tiny magnetic iron-based particles. The card can be 'written to' much the same way that the hard drive on your computer can be written - by means of magnetic interaction changing the charge. Written into the stripe are your account number and identifying data. When you swipe the card, that information is read and sent via modem to an 'acquirer' - a company that 'acquires' a payment guarantee from the credit card company based on the information stored on your card's magnetic stripe.
4. Isn't buying on the internet dangerous and insecure?
Honestly? Your credit card information is in less danger being transmitted over the internet than it is when you hand your card to a store clerk at the counter. The real danger to your credit card information isn't from hackers hitting online merchants, or stealing your credit card information via modem or phone lines. The real internet security dangers come from two different directions:
a. Hackers using back doors to get into the records of banks, credit card companies and data repositories.
This is the biggest danger. It's also a danger for stores and companies that have records 'online' for billing purposes. There's a great deal being done to improve security of data repositories, which are far more vulnerable than any data transmission stream.
b. The second big credit card security danger is the practice that's sometimes called 'phishing'. In this case, the credit card thieves trick you into giving them your identification and credit card data. They may do this with an email purporting to be from an official of your internet service provider or email, your credit card issuer or anyone else. They also may build sites that are identical to sites like Paypal, American Express and others for the express purpose of capturing your information so that they can use it.
5. How do I protect myself from phishers?
First, never provide your social security number or other identifying data to anyone without first verifying that they are exactly who they say they are. Experts recommend that you never use the link provided in an email to go to the site of someone you do business with. Instead, open a new browser window and type in the known address by hand
Secured credit cards can rebuild your bad credit only if you show a historical improvement to your payment history. A secured credit card is one that is prepaid; as long as you maintain a positive balance then a positive history is created.
Can a credit card improve bad credit? Can something inherently bad become something good? However, the consensus of most honest financial advisors is that debt is a disease. An ongoing radio commercial announced that credit card debt is the third largest debt growth area amongst Americans. It states that the average credit card debt is $10,000. Apparently Americans have a serious disease and it is not getting better. Some advertisements promise debt consolidation, whereby a large amount of credit card debt from many credit cards are rolled into one credit card debt. The only improvement is that there is one address to send monthly payments.
There is nothing really good about debt. Americans have been convinced by retail salesmen and the banks that to have good credit one must have a solid credit history through credit cards or credit accounts. A solid history means more than the fact that you have consistently made payments on time without failure. The credit card companies and the banks evaluate your spending tends, the debt load over time, your savings history, checking deposit history and actual check spending history. This personal information is felt by these institutions to be proprietary, belonging to the institution because of their unique methods of collection, rather than belonging to the individual who creates this activity. Debt is bad because it gives total strangers control over your life. It teaches you that spending all of your cash assets is fine, there is no limit or bounds to spending, it is acceptable to owe vastly more money than you make or will ever make.
A credit card, if it is the only credit card you possess, could start improving a portion of bad debt only if you liquidate your current debt in a steady, reliable manner. This will only show a history of reliable payment. As I have already stated banks and credit card companies are not interested only in your reliability, they want the "juice" off of the advanced credit you have obtained. This means they only want you if they can get their interest in a regular and steady manner.
This is not the same as pay your debt regularly until it vanishes. They want you to remain indebted permanently but repaying them in a timely manner. If you are debt free you may not be judged to be a good credit risk. This is the state that underage children and young adults find themselves whenever they attempt to secure a credit card. Simply stated, good credit doesn't mean what it did just fourteen years ago. The protections afforded the consumer since the Depression of 1929 no longer exist.
The Financial Laws passed through Congress in 1992 allowed banks, insurance companies (especially health insurance companies) investment firms to handle banking, insurance and investment operations. Laws passed after 1929 had prevented banks from insurance and direct stock exchange trading, likewise insurance companies could not pursue banking operations or stock exchange nor could stock exchange companies pursue insurance or banking operations. This freedom was granted without the subsequent protections of the consumer included in these new laws. There currently exists no single body of consumer law. The private citizen must fight the triumvirate of bank,insurance and stock exchange through the court system for his own right to privacy. Remember a credit card is not the way to improve bad credit; it is a quick way to obtain bad credit!
The internet is the place of limitless ideas, products, businesses and anything under the sun. It could also be a place of deceptive offers and persuasive advertisements? Credit cards are already becoming a must-have item nowadays. People are seeking to own one to facilitate their shopping and traveling. Credit cards are very important properties that can be equated to cash. Almost every product that is available for sale can be purchased using the credit card. Restaurants are offering foods to be served for a credit card. Hotel rooms are made available in one swipe. Plane tickets and cruise line fees at hand provided by credit cards. There is nothing to ask for if one has a credit card. Debts are natural to be included in credit cards. And these debts can be directly relative to the card issuer company. There are many things to look up to when credit card and credit card offers is being the subject of the conversation. The internet, being the place of instant shop less the hassle, is also becoming the place of fraudulent offers be it form any product and even to credit cards. There are fake or marketing companies that use the internet to win attention from people who would want to their own credit card. There are a lot of them and they are drastically growing. These companies are not actually lending companies. They can appear to be foundations that offer credit solution and the like but acts and talks the same way as a credit company. There are many ways and strategies that they are doing just to capture the attention of many and rob their money. What are the things that these fake lending companies are saying and what are the offers they frequently brag? Here are some pointers to consider on how to know whether a lending company is a fake or not. -When companies are starting to offer zero interest and low interest at the same time but not telling what type of credit card is going to be given, chances are that the company is not giving away or is not a lending company but a marketing or sales company. This company maybe referring to one-time-credit-cards or gift checks that can be used to purchase products from the company. The card that they will give can never be used in any ATM around the world. -When companies disregard your credit history or situation, then these certain companies maybe just pretending to be real. No lending company will disregard a credit situation of a client. Companies think first of the profits that they can get from the client and will not accommodate any losses due to non-payment. -When companies disregard the age and employment status of a person, there is a higher possibility that these companies are just make-believing. The capacity of a person to pay is determined through his employment status. When this is disregarded, what good can it bring to the lending company? In addition, most banks and lending companies prioritize those younger person rather than the old ones. This is in lieu with the ability-to-pay scheme that lending companies are implementing. There are still a lot of doubtful offers that you may encounter not just in the internet but also in newspapers and other media. To make sure you will not be victimized by these people, try to contact reliable banks and lending companies rather than infamous lending companies.
With or without an existing credit history, good or bad, you’re sure to be approached by someone with a credit card offer. And although all credit card offers seem wonderfully tempting, it’s usually the case that you’re only suitable to a particular type. To know which credit card offer is really meant for you, here’s what you should know. Tips on How to Know If a Credit Card is for You KNOW THYSELF – More importantly, know why you’d want and need a credit card in the first place. Consider the side of necessity first: how can a credit card help make your life better? Is there a way for a credit card to help you become more financially solvent? Next, think about the pleasant side of the fence – what perks would you wish to enjoy from using a credit card? Lastly, take a good look of yourself and make a self-evaluation by asking these questions: Am I ready for the responsibility of having a credit card? Do I really know what I’m getting myself into? Can I promise to myself to pay my credit card bills promptly? KNOW HOW OTHERS THINK OF YOU – The “others” in this part refers to the banks and creditors that you have transacted with in the past. If you have any bills or loans to pay, those can already serve as your credit background and may be one of the reasons that you’re given credit card offers that you don’t really find desirable. If, however, you don’t have any existing credit records, this isn’t exactly a good thing either unless you’re a fresh graduate. That’s understandable, of course, because you’ve just entered the real world. If, however, you’re already an adult, you should at least have a reliable and steady source of income. Without it, the types of credit card offers you can expect to receive are sure to be limited. KNOW ITS RANGE – Some credit cards can only be used in specified stores or limited to a certain region in the United States. If, however, you receive credit card offers for Visa or Mastercard, these will allow you to use your credit card even if you’re abroad. Cards with well-known names like Visa or Mastercard are definitely suitable for people who travel often or intend to use their cards in a variety of establishments. These cards, however, imposes stricter application requirements that what you’d expect from credit cards with a smaller scope. KNOW ITS AFFILIATES – Some credit cards offer special interest rates and other kinds of perks and privileges if you’re affiliated with a particular association or company so do make sure that you ask the person who made the credit card offer about this. You might even be able to choose a specialized design for your credit card if you happen to satisfy any of their stipulations regarding this matter. Now that you know what type of credit card offer is right for you, there are only two other things left to do: Firstly, take the necessary action to verify whether the credit card representative that approached you is really an employee or agent of the issuing company and that he’s really providing you a legitimate credit card offer. Secondly, be prepared to spend a bit of time and effort to satisfy the application requirements for the credit card offer you’ve chosen to take up. You’ll have to furnish the credit card company with documentary evidence of your income and credit history. But after that, the credit card’s all yours to swipe!
In this day and age, plastic rules, not just because of convenience and safety features but also because of the opportunities for rewards and rebates that many competitive credit card companies offer. You no longer have to look too hard for credit card offers because they will find you. The only question is how to pick one that will give you the best deal. If this is your current dilemma, here are some simple tips to help you narrow down your choice: Never go random. When there are so many credit card offers out there that seem to offer the same things, it can be tempting to just sign up for whatever card comes along. This is not a good way of taking advantage of credit card offers. Never pick a credit card based some random advertisement, a recommendation, pressure from the credit card company or a purchase emergency. Consider what you'll use it for. While a credit card can give you a semblance of financial freedom, it is still a form of debt, that's why it's called a credit card. Before you decide on a credit card offer, think about what you'll need to use it for and how often you think you'll be using it. Say for example you're the type who likes to frequent a certain establishment and usually use credit for your purchases, you might want to consider a credit card from that store if they're offering one. That credit card will often carry with it a lot of great discounts, rewards, cash rebates and special privileges when used with that establishment. Look for range. Generally, the more locations you can use your credit card with, the better, so you might want to choose a credit card that can be used both nationally or internationally. If you don’t see yourself leaving your locality for a long time, regional credit cards will work well for you. Go for low interest rates. When you're finding the best card among your credit card offers, look for one that has the low interest rates. Rates vary depending on the credit card company and sometimes, on the card itself, so it will be advantageous for you if you compared rates. Low interest rates will be a good choice for you if you're the type of consumer who prefers to pay for your credit card purchases on an installment basis, with payments spread out for several months. That way, you won't be saddled with high monthly payments and end up paying more. Other fees and features Annual fees and penalties are another thing to watch out for when you're considering credit card offers. There are also corresponding fees for other transactions such as balance transfers and cash advances. You might also want to check what features come with a credit card, such as rebates, rewards programs, discounts, warranties and even insurance. Mind the fine print. The fine print can be deceiving, so make sure you read it before signing up. You might be attracted to one credit card because of the low interest rates only to find out later that the rates are part of an introductory offer and that you'll be saddled with a much higher APR after only a few months. A credit card offer is only as good as the fine print, so choose well. Take charge. You don’t have to be passive about your credit card choice nor do you need o be stuck with what's being offered to you. Write down what your needs are and what kind of features you'd want in a credit card. Next, pick up the phone and ask several credit card companies for their best offers. If you take a more proactive role in choosing your credit card, you're more likely to find one that will fit you best.
