Top 5 Ways To Get In Trouble With Credit Cards

Credit cards aren’t evil; they are only another financial tool. As with any tool, it all depends on the users whether they hurt themselves or not when using them. If you want to avoid getting in trouble with credit cards, or even a payday loan, here’s what not to do.

Take Out Credit For Everyday Expenses :Whether it’s a credit card or a cash advance, if you’re using the money for every day expenses like groceries, gas, or even trips to the hairdresser, you’re bound to get in trouble. Save the credit cards for when you really have no other option. It’s always best to live within your


means.

Take Out More Than Two Credit Cards:When times were good, you probably got a ton of credit card offers. If you have more than two cards, strive to pay off all of the extras and keep two only. This not only helps with managing bill paying, but it also helps keep the tempting plastic out of your sight.

Make Late Payments:No matter what loan you have, a late payment of 30 days will show up on your credit history. You will also be served with a late penalty fee. Due to the Credit Card Act of 2009, you might not get an interest hike until after 60 days being late, but it will go on the credit report long before then. Make enough late payments and you’ll be paying far more on the bills than necessary and you will damage your credit to boot.

Have No Plan To Pay Off The Balance:The goal for a credit card is to be a revolving credit line. However, if you carry a large balance any hike in the interest rate is going to significantly impact your minimum payment. Transferring large balances to a lower rate card is problematic because you will be charged a 3% transfer fee on the balance transferred. Instead of playing credit card roulette to reduce finance charges, make it a plan to pay off the balance.

Refuse To Talk To Your Lender:Okay, maybe you got behind, made a few late payments, or lost a job. Now’s the time to talk to the lender, not ignore them. Many lenders are willing to work with people to set up a payment plan that can work for them, but you won’t know unless you answer your phone calls. Always seek to negotiate a debt, rather than ignore it.

An Article on Credit card 'phishing'

Before I go ahead with this topic of Credit Card Phishing let me briefly explain the term phishing According to wikipedia

“computer security, phishing is the criminally fraudulent process of attempting to acquire sensitive information such as usernames, passwords and credit card details by masquerading as a trustworthy entity in an electronic communication. Communications purporting to be from popular social web sites, auction sites, online payment processors or IT administrators are commonly used to lure the unsuspecting public. Phishing is typically carried out by e-mail or instant messaging, and it often directs users to enter details at a fake website whose look and feel are almost identical to the legitimate one. Even when using server authentication, it may require tremendous skill to detect that the website is fake. Phishing is an example of social engineering techniques used to fool users, and exploits the poor usability of current web security technologies. Attempts to deal with the growing number of reported phishing incidents include legislation, user training, public awareness, and technical security measures.

A phishing technique was described in detail in 1987, and the first recorded use of the term "phishing" was made in 1996. The term is a variant of fishing, probably influenced by phreaking, and alludes to baits used to "catch" financial information and passwords.”

"Phishing" has recently become a familiar phrase in the banking business. It is a form of fraud: Phishing is when thieves pretend to represent legitimate companies, contact consumers and extract their credit card information. Then the phishers go shopping. For the victims, it's not funny.




How it works
Phishing starts when a consumer receives an official-looking e-mail from a business. The e-mail looks in every respect like one from a trusted source, such as a bank or e-Bay. The fraudulent e-mail will come with all of the right wording and company logos and will typically profess to be doing a security check, requiring the customer to verify private information.

Consumers who fall for the phishers' scheme click on the ad or call the number and then volunteer their vital banking information: Social Security and account numbers. Then the trouble starts.

Protecting yourself from phishing
Experts say this is the key: Do not give out personal information when you have not initiated the conversation.

Unless you initiated the call, DON'T give out:
• Your date of birth.
• Your Social Security number.
• Your mother's maiden name.
• The three-digit security code on the back of your card.
The phone tricks:Don’t fall for it

Do not give your information out even if someone calls and says they are with your credit card company and are investigating a potential identity theft. Ask for the caller's phone number, and offer to call back. A scammer is unlikely to give you a number. Even if he or she does, don't call back; just report it to authorities. If you call and surrender your account information, kiss your money goodbye: Thieves can use your credit card to shop online in complete anonymity.

If you get a suspicious e-mail, forward it to your bank or retailer. Most of them have internal security teams that want to stay abreast of the latest phishing techniques.

Always keep one thing in mind that Computers don't steal, people behind computers do steal .

How to avoid Credit Card debt

Credit Cards(CC) is really useful as you can buy things on credit. Book a flight ticket without moving an inch out of your house ,buy your favorite items even if you don’t have the much needed cash just buy what ever you with your CC. Isn’t that great!!. But if you don’t know how to manage your CCs properly you might fall into trouble called CC debts.
General advice to avoid CC debt

Always try to pay more than your minimum dues: You actually build up recurring and extra interest on your CC when you make only the min payments. It actually shoots up the net cost of your CCs considerably. Therefore, always make an extra payment towards your CC debts whenever you can. Follow this golden rule religiously just pay before the due date: Don’t make a habit of paying CC bills on the due date. You’ll be charged late fees if you somehow miss the due date of your CC payments. Therefore, it is always recommended to make the required payments on time .Good old cash! Try to purchase items with cash: You can avert accumulating CC debt if you make a habit of purchasing stuff with cash. Use CCs only during emergency time when you really cannot do without it. Make a smart budget plan and allot fixed amounts to each category so that you don’t require to use your CC unless it’s an urgency, such as, paying those emergency medical bills.Never use multiple CCs: never use too many if possible, cancel some of your CCs. It will help you to manage and remember the due dates of your payments if you have few manageable number of CCs. Also always create an emergency fund so that you don’t have to swipe your CCs every time. It will help you to prevent cumulatively accumulating CC debt. It is recommended that you keep an emergency fund worth 3-6 months of your living expenses. Also, make sure you don’t use the amount to buy stuff. Instead, use the money to repair a damaged item or pay an emergency medical bill whenever required.

Things you must know while using your credit cards online

Shopping on web is cool buying stuff without going out of your home is even more cool option for all of us. Buying stuff online using your Credit Card (CC) can be a bad experience if you are not careful enough. Many Internet users do believe that using a CC for net transactions is unsafe . The greatest risk of using CC while buying online is identity theft. Other serious concerns like: personal data or info may be sold to 3rd parties, unauthorized and continuous recurring transactions, not geting the exact ordered products or even paying much higher prices than declared prices.

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Many Internet users believe that shopping online is dangerous. So few precautionary measures can be taken until you want to completely give up shopping online. Firstly we should never shop from unknown(read fraud) websites. Always look for familiar sites or ask somebody to recommend you a site or a company. Still, if you're not sure of the site’s identity try to do a detail and minute background checking . Also see the refund and return terms of the company carefully in case they don't send you the right stuff or you're not happy with the quality. The internet browser that you're using has to be a secured and safe browser. By a secured internet browser I mean a Secure Sockets Layer that scramble the data or info you are sending over the net, making the online transaction more secure and safe.

Another vital thing to be worried about is your privacy. The info you're giving when you use your CC online should be kept secret by the site that receives it, meaning it should not be shared or sold to 3rd parties unless you agree. Many sites ask for your agreement for using personal details for marketing, and if you don’t want to give them rights you must know that you can do that. Before giving any personal info or details you should check the privacy terms of an website; if there are things not clear to you give them a call and clarify things. Do not give any data or info, unless you're sure that your CC details are secure and safe.

It is a known that online CC transactions are perilous, as your personal detail data or info are given out and can be misused to do frauds. Yet, if the buyers are watchful to whom they relies these data or info and the vendors are cautious from whom they receive CC data or info, the risks of online CC frauds declines considerably. When exposing personal data or info, common sense must be applied.

Credit Card Informations

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Credit cards are really cool, right? You get a easy credit limit and you can pay for things you love with your card. When you pay for something with your credit card,you are actually buying things on credit. You have to pay interest on your credit card balance and as long as you don't go over your credit limit, everything's easy and fine.
Here are some of the frequently asked questions and answers -about credit cards .
What is interest?
Interest is money that you pay a lender for the privilege of using his money to buy something on credit.
What is this about 'interest rates' and percentages?
The interest rate =Is the monetary amount you're paying for borrowing money on your credit card. It's is a % of the balance on your card, usually as an annual percentage rate. The lower the annual percentage rate, the less interest you're paying .
Now, Why would you take a card with a interest rate?
Most people don't want to pay a high interest rate. Credit card service providers decides what interest it will charge you, they determine that by looking at your history of paying bills. If you have a good reputation of paying bills on time, then you'll qualify for lower interest rates. If you haven't ever had any bills to pay, or if you've had trouble paying your bills, that will show in your credit history. As it's a riskier to lend you money, banks will charge a higher interest rate. People might also take a credit card with a higher interest rate for the gifts and rewards that come with that card. If the card includes special gifts that you want, they may offset the higher interest rate and make it more worthwhile for you.
'outstanding balance'. ?What is it?
Outstanding balance is the net amount that you owe on your credit card. Banks and Credit card companies compute what's called an 'average daily balance' for each month and base your interest charges on that.

Improve Your Credit Score

Credit score is important for everyone who has any account and uses credit card. You should always keep in mind that your credit score follows you just like your social security number. It plays an important role whenever you are going to get any mortgage, car loan or even when you are applying for any job. So if a person knows the method of checking credit, then it becomes very easy to improve the credit score. Following are some methods to improve the credit score following which can really help you out:

• First and most important thing is to review your credit report. Correct the errors if you find any in your credit report. You can always get a free copy of it from any free credit report site.
• You should always remember to pay you bill on time. This step will help you in long run to improve you credit score.
• Try to avoid too many credit cards which can lead you into heavy credit card debt.
• Transferring balances from one account to another can change the ratio of total credit card balances to total available credit lines. But you should also keep in mind that transferring of balances should not affect the credit score.
• You can also go for other new credit accounts but use it wisely.
• Try to use your credit card less and always pay them off at the end of month. It is good for your credit score if you keep space between the balance you carry and your total credit limits.
• It is advisable if you don’t close your old and paid off accounts because closing these old accounts can short your credit report as well as make them of less credit value.
• You should always avoid bankruptcy because it affects hard on the credit score.

If you follow these steps then you’ll sure improve your credit score and never get into any credit card debt trap.

Credit Card Options for Newly Wedded Couples - II

In my last post I shared with you what are the pros and cons related with couples who don’t share their credit cards with each other. Now in this post I would like to share the advantages and disadvantages related with couples who share their credit cards with each other.

If a couple have faith on each other so much that they can share a joint account and credit card between them only then they should go for a joint account because if both in the couple are spendthrift then the interest which will be counted in a single count which can lead the couple into heavy debt trap. The method of sharing a single credit card and account work only for those couple who share their opinion with each other and have same mind about their financial decisions. Couples which are sharing their credit card must keep in their mind that they must avoid any credit card debt as it affects the credit rating. This credit rating can affect you financially if couple don’t pay their balance amount or not make the repayment at the right time. If a couple shares a single account then credit card bureau always keep an eye on credit report of both people. Couple should use their joint account wisely because they have to answer the creditors whether for good reasons or for bad reasons. They should always plan for clear payment because having joint credit card affects credit rating. Couple can use their joint account for household expenses or for whatever they decide with a single mind.

Most of the couple never plans for their finances before and fall into credit card debt trap. So it is better to plan for financial matter to avoid any financial crisis.

Credit Card Options for Newly Wedded Couples - I

When a man and a woman marry each other, they promise each other to share everything (happiness and sorrow) with each other. But when the question comes of sharing their credit cards, then in most of the cases you’ll not find any answer by couples because no one of the couple wants to pay credit card bills of each other. So the question arises here is that whether newly married couple should share their credit cards with each other or not.

It is better for newly married couples not to share their credit cards with each other and have separate accounts till the time they understand each other because after the time when you know each other well, then you can decide whether you should share your credit card(s) with your partner or not. If you choose to have separate credit cards for yourself and your spouse then in that case no one has to answer to each about any expense or about their spending habits. This type of couples is always ready to avoid any clash between them regarding credit card bills. Also they always keep their financial issues always clear which help both of them in long run. One more important thing which I should mention here is that both persons can make a strong payment history under their name.

These were some advantages for the couples which want to have separate accounts and don’t want to share their credit cards. In my next post I’ll share some advantages and disadvantages related with couples who share their credit cards. Also I’ll share different credit card options for newly wedded couples.

Identity Theft - Protect your identity to protect your money

If someone steals your money from your bank account or any financial document using your personal identification details, we call this method of stealing as Identity theft. If a person can steal your personal identification details like your name, credit card numbers, email ids and password or social security number, he/she can easily take out all money from your bank account or can apply for credit on your name or even can get job on the basis of your social security number. It is not easy to solve such cases. It can get you into heavy debts and can ruin your credit score. In some cases, people are not able to recover from heavy financial loss.

There are several ways to steal your identity from you. The most common method is to steal your wallet with the help of which anyone can have your name, address and credit cards with the help of which he/she can quickly clear your bank account. Another way is to steal mail from your mailbox or change the mailing address in the post office in order to get your mail at the address given by thief. This type of thief can even use documents like old bills, bank statements etc throw away by you in garbage which has personal details about you. The most new form of identity theft is stealing identity through internet in which virus like Trojan send by thief through mails can get any type of personal information from your computer’s hard drive.

Identity theft is preventable and there are number of ways to avoid it. Following are some common ways to protect your identity:

• Monitor your account by checking it on weekly basis to check each and every transaction.
• Always check your credit report at least once in a year. You can ask for your credit report from credit bureaus too.
• Tear all your documents like old bills or bank statement before dumping them to dustbin.
• If your wallet is stolen by thief, then immediately inform bank, credit card companies and credit bureaus.
• Never open spam mails and never give reply to such mails.
• Use a good anti-virus in order to prevent your computer from viruses and unwanted application programs.

10 avoidable expenses in Credit Card Debt - II

I was not able to share all the points because of a meeting with the client. So here are the rest of points related with the expenses which you can avoid in case of credit card debt:

• Avoid gym membership: Yes, I can accept the fact that doing exercise in gym is important as well as good for your health but there are other ways too keep your body fit and healthy. You can go for run in a park instead of running on treadmill. It is not necessary to go for weight lifting machines or any other machines to have resistance in your body. You can do push ups, pull ups and other physical exercises for the purpose.
• Avoid designer clothes: Obviously, if you are going through credit card debt then you have to live on clothes without labels of any brands. Designer clothes come under luxuries items and are too expensive and being a person in debt you cannot afford a single luxurious item.
• Avoid unnecessary shopping: For most of the people, shopping is not an activity to buy things but it is an activity to refresh mood and a form of entertainment. So if you want to get out of debt change this habit. Don’t buy anything which you genuinely not require.
• Avoid late fees: Paying your bills on time will help you in two ways. First it will save you from penalties and secondly it will increase your credit score. You can borrow money at a much lower interest rate with increased credit score. So always remember to pay your bills on time.
• Avoid high interest rates: You are wasting your money if you have credit card with high interest rates. If you have any credit card with high interest rate then transfer the balance from that card to those which have lower annual percentage rate.

These are few points following on which can get you out of debt quickly and can balance your finance smoothly.

10 avoidable expenses in Credit Card Debt - I

If you are going through credit card debt then following are some expenses that you should avoid to get out of debt as soon as possible:

• Avoid taking meals in restaurants: Yes, I can accept the fact that taking meals in restaurant is pleasant but is not essential. You can buy few cookbooks and cook meals for yourself. Try some new recipes from cookbook and believe me you’ll find it more pleasant than going to restaurant.
• Avoid junk food: Avoid potato chips, burgers, cold drinks etc. Junk food is expensive and is harmful for your health too. Thus by eating junk food, you are affecting your financial condition in two ways. Try to go for real food. It is cheaper as well as good for your health too. But if you want to eat any junk food like burger or chips try to make it at your home.
• Avoid smoking: Smoking is worse than junk foods. It is injurious for your health as well as expensive too. Try to avoid it or minimize it if you can. It’ll be good for your health and your financial condition.
• Avoid Television: Watching TV is not good for your financial condition. TV pushes you to spend money which you don’t have. Commercials and advertisements in TV encourage you to buy those things which you don’t require. Cable fee in Television is an extra expense so it is better for you to switch it off for some time.
• Avoid buying DVDs: Watching a DVD is a better option then going to movies. But buying DVDs are still misuse of money. So avoid buying DVDs. Instead of that you can take the DVD on rent or from your local library. But don’t forget to return it to avoid late fees.