Pay off credit card debt: four tips from the personal finance experts

This is one of the most common financial problems and can overwhelm you if you are not careful with your spending.

Credit card debt can feel like it takes on a life of its own when you’re not looking, and adding to it is too easy – dinner here, a little retail therapy there, chasing points reward for an airline, splashing out on vacation… it all adds up. Worse yet, you find that you are doing this on multiple cards.

It’s time to take a deep breath and make a plan to pay off the debt you’ve accumulated. The independent spoke with three personal finance experts about what they consider to be the best strategies for tackling credit card debt.

Calculate your total debt and set a debt-free date

In order to pay off your debt, you first need to know exactly how much you have. Create a simple spreadsheet or use a personal finance site like Mint and itemize all of your credit cards, their respective balances, and interest rates.

This will help you clarify the scale of the project ahead and allow you to focus and monitor your progress. You might be surprised how quickly you can get to work paying off what you owe, and the difference a few small changes in your lifestyle can make if you use even small amounts to pay off debt.

Then set a deadline for yourself. When do you want to be free from your debts? Danetha Doe, the creator of Silver & Mimosas, a financial wellness platform for the self-employed, says, “Once you have a date in mind, reverse engineer the process to determine how much you need to pay each month and which strategy is the best approach for you. you. “

Choosing a debt repayment strategy

There are not many ways to pay off your debt, so pick one that you think will work for you, but be aware that if you are struggling, you have other options.

The first approach is known as the “avalanche method” where you first pay off the card with the highest interest rate while paying the minimum amount on other credit cards. “Once you pay off the first credit card, you transfer those monthly payments to the next credit card and so on. Explains Ms. Doe.

Loreen Gilbert, CEO and Founder of WealthWise Financial Services, notes, “People have different opinions on how to tackle credit card debt. Some say pay the smallest first because it is an accomplishment. However, I think tackling the one that generates the most interest makes more financial sense. “

Paying off the card with the lowest balance is known as the “snowball method”. Likewise, as with the avalanche method, you pay the minimum amount on any other cards you own, and then after the first card is redeemed, you snowball those monthly payments onto the next card.

Ramit Sethi, the author of I will teach you how to be rich, is a fan of this method, and notes that if you feel like you’re not ahead of your debt, it’s a quick way to gain a sense of accomplishment in what for many is an uphill struggle.

He advises paying an extra $ 50 per month, either by saving money elsewhere or by making extra money through a side business to cover that amount. Above all, while paying the minimum on your other cards, pretend they don’t exist to avoid getting into more debt.

Says Mr. Sethi, “Paying off the credit card with the highest APR might be the best mathematical method, but you know what’s amazing? Pay a card. You’ll regain confidence, gain momentum, and be ready for a bigger challenge. Before you know it, you’ll have paid for it and you can upgrade to the next card.

A third method is to do debt consolidation. This is where you call your credit card companies and ask if they will consolidate your credit card balances into one card.

Ms. Doe notes that generally, if they do, they’ll offer a lower interest rate on the card. “This can be great for some people because it translates to just one payment per month versus multiple payments which can be overwhelming.”

As a last resort, she suggests filing for bankruptcy. “Sometimes it’s the only option for people to get out of overwhelming debt. Work with a legal expert to determine if this is the right course for you.

Consider a balance transfer

Depending on your credit score, some credit cards will offer you the option of transferring your credit card balance to a 0% interest rate credit card. Keep in mind that this 0% interest will only last for a short time, and once the period is over, the interest rate will skyrocket.

Ms. Gilbert notes: “A lot of people used to living beyond their means use credit cards to finance their lifestyle and then look to shift credit card balances to 0% interest cards. The problem is, rates won’t be low forever, so keeping spending under control is key to getting rid of credit card debt once and for all.

“If you transfer balances to a 0% offer,” she advises, “keep the same payment from your higher interest cards that you had to pay in order to reduce debt faster. “

Be tough on your spending

Use the time you spend paying down your debt to work on setting new financial standards that will hopefully leave you in better health.

“Until the credit cards are paid off, stop using the credit cards altogether,” says Gilbert. “Studies have shown that people spend about 20% more when they use credit cards than when they pay cash. So use cash and break the habit of spending more.

“By the time the credit cards are paid off, you have developed a new habit and you may not feel the need to use a credit card,” she adds.

“If you’re still having trouble sticking to your debt repayment plan, you may need to use a system like the Conscious Spending Plan to manage your spending,” suggests Sethi, referring to the Exact Planning Technique. of how you are going to spend your money up front and stick to it.

“You can also look for big wins that can unlock more income, like negotiating your salary or rent. By earning more (or spending less), you can pay off your debt faster, ”he adds.

Ms. Gilbert suggests a similar practical approach: “Eat half as much a week and use that money to pay off your debts. It may seem like a small amount of money, but that small amount of money can make a big difference. For example, if each meal costs you $ 25, you could pay off the debt of $ 200 per month.

Breaking a cycle of spending and accumulating debt may require a more introspective examination, says Doe. “If you find yourself in a cycle of credit card debt for an extended period of time, or if you are fluctuating between no credit card debt and high debt levels, it is wise to examine your mindset. “

She suggests examining your relationship and your beliefs about money to determine the financial behaviors you need to change.


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How to report income on a business credit card application – Forbes Advisor

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.

A credit card designed specifically for business spending can quickly become a staple in any business owner’s wallet. Applying for a credit card is a fairly straightforward process, but business owners should be careful to accurately report their income and income. Typically, a credit card issuer requires a gross annual income from the previous year on a business card application. The applicant must report all income before taxes and expenses.

Why is business income needed?

Credit card issuers use three elements to assess whether the applicant will spend responsibly and be able to make monthly card payments on time:

  • turnover
  • estimated monthly expenses
  • personal income

Issuers also use this information to set a credit limit. The higher the income of the business, the more likely the applicant business is to be approved and the higher the limit.

What must be declared?

Most business credit card applications require gross annual income from the previous year. This includes any money from sales or services, stock sales, or anything else that makes the business money. Make sure you don’t subtract expenses or taxes from annual income (there is no need to split profit or net income).

Be careful not to report sales forecasts as revenue (unless the issuer specifically states that this is acceptable). In general, only income that can be verified should be reported.

Small business owners can choose or be asked to report both business income and personal income to assure the issuer that they are able to make monthly payments on their business card. Keep in mind that a business card applicant does not need to have a registered business to qualify. Sole proprietors (like freelancers or Uber drivers) can also benefit from a small business credit card. Simply report the income from the previous year (before taxes) as income.

What should be left out?

Be careful not to report income or income that cannot be verified with pay stubs, receipts, invoices or other documents. Credit card issuers can ask for tangible proof showing that the applicant has earned what they claim.

Do not report any personal income that is unrelated to the business declared in the application. For example, if the applicant has a full-time job at a fast food restaurant and the application is for a business credit card for their graphic design activity, the fast food restaurant salaries should not be included in the income of the company. ‘business. (However, fast food wages can be reported as personal income.)

What if a candidate has no business income yet?

Not having any business income yet is not necessarily a deciding factor in applying for a business credit card. Applicants can enter $ 0 as income as long as they are able to indicate their personal income later in the application. Any income from part-time or full-time employment, a spouse’s income, or business profits can all be reported as personal income on the application. The credit card issuer will use this information to determine if the request will be approved and to set the amount of the credit line.

Depending on the issuer, some applicants may enter new business sales forecasts as revenue. The requester should call the sender to ask if this is acceptable. Do not do this without the explicit permission of the issuer. Keep all screening documents handy in case the issuer requests proof.

Above all, don’t lie about the app. This is illegal and can lead to heavy fines or jail time.

Best Business Credit Cards 2021

Find the best business card for you and identify the important factors for your business

Final result

Business owners and sole proprietors can qualify for business credit cards. Report the gross annual income (before taxes and expenses) of the previous year on the request. Entering personal income can help increase the chances of approval, especially if a new business owner does not yet have income to report. Be careful not to lie down on the application, which could have serious consequences.


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Will Credit Card Debt Ever End?

Just when I thought maybe the pandemic had made many Americans realize, when they had less to do and spend money, that they could in fact live without a lot of unaffordable “wants”. and the resulting credit card debt, WalletHub.com released this report, based on its recent survey.

“After a record year for credit card debt reduction in 2020, US consumers are once again adding new credit card debt by the billions, racking up $ 45.7 billion in the second quarter of 2021. C This is an all-time record for credit card debt added in the second quarter of the year, and WalletHub now predicts consumers will add a total of $ 100 billion in debt in 2021. ”

These quotes from Jill Gonzalez, a WalletHub analyst, should make everyone think twice, but will they?

Why Are Credit Card Debt Levels On The Rise Again?

“Credit card debt levels are rising again as the economic uncertainty caused by the coronavirus pandemic has subsided. People are reintegrating into society and making up for lost time by living fully, even though they cannot quite afford it. The fact that credit card debt has increased dramatically isn’t too surprising, although it’s unclear whether this will be a momentary reaction to the unique conditions caused by COVID or the restart of the drift. long-term consumers towards financial instability. ”

Why are debt levels rising faster today than before the pandemic?

“Debt levels rose 32% more in the second quarter of 2021 compared to the same quarter in 2019 as consumer enthusiasm exceeds fundamentals. Many of us are not as full as we might be feeling right now, but we are still spending like there is no tomorrow. The starting point also matters. After the start of the pandemic, consumers reduced credit card debt to levels not seen in decades, and now we are seeing pent-up demand in action. ”

Didn’t consumers learn from their pre-pandemic financial mistakes?

“The $ 45.7 billion increase in credit card debt during the second quarter of 2021 indicates that consumers have learned little about sustainable spending from the pandemic. The fear people had of running out of money for food and shelter, not to mention other bill payments, was overcome by enthusiasm at the prospect of post-pandemic life.

Related to another subject, using cash as much as possible, I had a wonderful experience last week. I was at Tom Wahl’s in Fairport for lunch with my grandson. We were served by Gabriellis, an enthusiastic and charming young lady with a great personality. I paid in cash, of course, including the exact change in my wallet. She said: “I also have a wallet, and everyone in my family too, because we pay as much as possible in cash.” She takes a year off and works to save money. There is hope for more people using cash!

Continuing, metaphorically, on the topics of credit card debt and the use of cash, I can’t help but think that sometimes we should take the cards out of the federal government and make it pay new cash. “wanted” programs. The administration says it can fund the many programs covered by the $ 3.5 trillion human infrastructure bill by raising taxes for the rich and corporate.

For some of the programs that to many Americans seem less urgent, why not ask the government to tax, to prove that it can collect the money needed, save it, and then fund the program with that “money saved.” ? ”

He is not proposing that the federal government should operate on a balanced budget basis, which many Americans have proposed. It’s just that for some programs they actually have to be paid so that the national debt doesn’t go up for them.

Following up on the topic of savings, we discussed how the pandemic has shown the importance of having savings in an emergency and that many Americans do not have enough savings in the event of an emergency. emergency. Recently, the Gist by Finny reported this encouraging news on the subject: “More and more employers are starting to explore the idea of ​​offering savings benefits to their valued employees. In a recent Willis Towers Watson poll, 26% of 464 participants said they offer emergency savings as part of their retirement benefits, and 19% said they are considering or heading for it. In addition, “several bills aimed at making provisions for employers and employees in the field of savings have also been introduced recently. The benefits would include things like making it easier for employees to sign up for emergency fund plans, more tax-free access to 401,000 contributions for emergencies, and even automatic savings focused on tax refunds.

On a final topic, I have to be a presenter of a program for mothers who want their teenage daughters to learn important life skills and other skills. One of the topics of my interview will be why you should learn about personal finance and teach your kids about it.

Here are three of my 10 reasons (the other seven will be in the next column):

1. Eight of the top 10 stressors in life, the last time I checked, were money-related, including being the # 1 cause of divorce, with 72% of Americans admitting they were. worried about their finances at work at one point or another.

2. Employers, landlords and others check credit because people with debt issues don’t perform as well (due to stress and time spent dealing with those issues) so people are wasting all kinds of things. things because of bad credit, like jobs, promotions, apartments, etc.

3. Due to incredible marketing, we now live in a “Debt is OK” society, but the interest you pay on debt (like credit cards, car loans seven years and older) means that you will pay more for everything you do. and buy – so you should avoid and minimize debt as much as possible.

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at mpnnow.com/search?text=Ninfo.


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Here’s the Truth About Credit Card Debt Relief

Although you tried hard, you couldn’t keep up with your credit card debt. In fact, you have fallen even deeper. Well you have an option to run out of bankruptcy and it is called debt relief. While no financial strategy is perfect, debt relief has helped dozens of people just like you.

Here is the truth about credit card debt relief.

What is debt relief?

Also called debt settlement, debt relief involves bringing in a company to see if your creditors – primarily credit card companies – will allow you to pay less than the full amount you owe to “settle”. »Your debts once and for all. And why would they do that? Well they can see what shape you are in, and know that if you drop bankruptcy, they probably won’t get anything.

How Does Debt Relief Work?

After an initial consultation with a company such as Freedom Debt Relief, you will have a plan formulated just for you. You will be asked to start making monthly deposits to a savings type account that you control. When you’ve saved enough – the amount will depend on your debt and income – your business negotiators will speak to your creditors on your behalf. Once each settlement is reached and accepted by you, the funds will flow out of your account.

Won’t debt relief hurt my credit?

The debt relief process requires that each of your creditors receive a one-time payment in full to meet your obligations. Because you pay your creditors indirectly – from your account – and only after a settlement, your credit will suffer a temporary decline. Once all of your settlements are met and you rebuild your credit, your scores will rebound and then some.

How Long Does Debt Relief Take?

Credit Card Debt Relief – which is basically what debt settlement is – takes anywhere from two to four years, which might sound like a long time, but not compared to the time it would take to try and pay off your debts on your own. Now it would take years, if not decades. Plus, your first settlement will likely come in a few months.

How Much Does Debt Relief Cost?

It depends on the business, but you can have 15-25% of your debt listed. But do you know how “priceless” things can be? It would be your new peace of mind.

Aren’t there a lot of scammers in debt relief?

Not a lot – unless YOU are caught, of course. The point is, most debt relief agencies are up and up. However, it is also true that there is some bad actors there who are more interested in parting with your cash than getting you back on track financially.

What you want is a reputable, credible company with a proven track record. You also want accreditation, so find a company that is a member of the American Fair Credit Council and the International Association of Professional Debt Arbitrators.

What you don’t want is a business charging upfront fees – before they’ve paid off a single debt. It is against the law, by the way. Make sure the company is transparent about their pricing structure and doesn’t force you to sign up. Sometimes companies promise too much or make guarantees, which are further red flags. While debt relief is a popular and broadly wise strategy, negotiations, by their very nature, are unpredictable.

Now that you know the truth about credit card debt relief, you can act with confidence if the approach is right for you. Just make sure you pick a credible, established business to help you out, and you’ll be back on track in no time.


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What to put as income on a student credit card application – Forbes Advisor

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.

Find the best student credit cards of 2021

Getting a credit card while attending college full time is a great way to start building credit. Even if students do not have gainful employment, they can use other forms of income in their credit card application, such as family bank deposits or financial aid leftovers.

Students must be at least 18 years old to be eligible for a credit card.

Why is income required on a credit card application?

Credit card issuers typically require income information on a new application. Issuers often look at disposable income – what is left over after someone pays expenses like rent or utility bills. Disposable income helps issuers determine what the applicant’s credit card limit will be and whether the cardholder will be able to make payments on time.

It is common for full-time students to have no income or minimal income from part-time employment. So what should a student put on a credit card application for income?

What counts as income?

Students can list actual earnings from a job if they have one. In addition to income from work, regular allowances or bank deposits received from parents or family may be included in income. As long as the monthly bank statements prove income, they are valid as income on a credit card application. Remaining financial aid (after paying tuition and college fees) may also count towards the income of a credit card application.

Make sure you add up all the potential income received and enter it into the credit card application. Students may be required to provide documents to prove their income, such as pay stubs, bank statements, or financial aid records.

How Much Income Do Students Need to Qualify for a Credit Card?

Technically, there is no minimum income required to obtain a credit card. A student’s disposable income could be as low as $ 100 and they would still have the option of being approved for a credit card.

Higher incomes generally give applicants a better chance of getting a card approved and a higher credit limit. Don’t lie about the income on a credit card application. Putting false information on a credit card application is fraud and can result in jail time or heavy fines.

What to do if you don’t get approved for a credit card

Some students without a credit history may have difficulty obtaining a credit card. Credit card issuers review an applicant’s credit history, but younger students usually have no history to analyze. They need a first credit card to build a line of credit for future loans and major purchases. Fortunately, there are alternatives for students to build a credit history if a credit card issuer denies an application.

  • Apply for a student credit card. Student credit cards are designed to help students get their first credit card. Issuers may have lower expectations for key application information such as revenue. Some do not have an annual fee and offer the option of increasing the line of credit over time as long as payments are made on time.
  • Apply for a secure credit card. Secured credit cards are approved for a predetermined amount of cash prepaid by the cardholder. The initial payment becomes the credit limit of the card. Cardholders can begin to build a positive credit history by using the card to make purchases and pay off their monthly balances. Keep in mind that purchases can still be charged with interest if the balance is not paid monthly. The cash amount will be returned to the cardholder once their account is closed.
  • Become an authorized user. Parents or other family members can add someone as an authorized user to credit card accounts. This is a great way for students to build on someone’s good credit history to start building their own. Be sure to ask the issuer first if they are reporting authorized user activity to the credit bureaus.
  • Have a co-signer sign the application. Having a parent or other responsible family member co-sign a credit card application can be one way to make approval more likely. As long as the co-signer has decent credit and pays their bills on time, it increases the chances of student approval. Many banks do not allow co-signers on credit card applications.

Final result

Students can list actual income from employment, regular bank deposits from family members, or remaining financial aid as income on a credit card application. Make sure you are honest about the income on an application. Creating or faking the truth about any information is fraud and can result in jail time or heavy fines. If a student receives a credit card denial, they can try again using a co-signer on their application. Alternatively, students can apply for secure credit cards, student credit cards, or become an authorized user on a family member’s account in order to start building their own credit history.

Find the best student credit cards of 2021


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What does your credit card number mean?

Most of us are curious by nature. So if you’ve been lying awake at night wondering what your 16-digit credit card number means, it’s your lucky day.

I’m going to pull the curtain back and show you not only what the numbers stand for, but also how they’re designed to detect an invalid credit card account number. I know the suspense is killing you, so let’s go.

Decode your credit card number

There are standards for account numbers, and this falls under the purview of the International Organization for Standardization. ISO is an independent international non-governmental organization.

So, credit card, which typically have between 13 and 16 account numbers, aren’t just random. Each digit conveys identifying information about the credit card, and the assigned numbers must follow the guidelines set by ISO.

However, there is some variation in how the standards are applied, and you’ll see what I mean when we get to the second set of numbers.

The first number.

Numbers 2 to 6.

Numbers 7 to 15 (or more).

The last digit.

[READ: Best Credit Cards for Young Adults.]

The first number

This number is called MII, or Industry Principal Identifier, and it specifies the card’s network and industry. If your card starts with 3, your card uses the American Express network. Visa starts with 4, Mastercard is 5, and Discover is 6.

Other numbers are used to identify the industry. For example, 1 and 2 are used for the airline industry. The number 3 represents travel and entertainment, so it makes sense that 3 also indicates that it is an American Express card. (AmEx cards focus largely on travel.)

Here is a full list of MII numbers:

1. Airlines.

2. Airline and other industry missions.

3. Travel and entertainment.

4. Banking and finance.

5. Banking and finance.

6. Merchandising and banking.

7. Oil.

8. Telecommunications and other industry missions.

9. Open for assignment.

Numbers 2 to 6

This group of numbers is called the issuer identification number. Usually, these numbers identify the company or institution that issued the credit card.

But note that different credit cards may have slightly different numbering systems. For example, Visa uses the second to sixth digits for the bank number. But American Express uses the third and fourth digits to identify the type of card and the currency used.

[Read: Best Starter Credit Cards.]

Numbers 7 to 15 (or more, depending on the length of the account number)

These numbers are linked to the cardholder’s account. The numbers in this group are unique to a transmitter and help route information to the correct channels.

The last digit

The account number van has an important role. It’s called the check digit, and it’s designed to ensure that all account numbers represent a valid credit card number.

Payment processors use a checksum formula called the Luhn algorithm. It was invented by Hans Peter Luhn of IBM. It is used to determine if credit card numbers have a logical pattern. If the numbers do not work with the algorithm, it is not a valid credit card number.

Where is the security code on a credit card?

This is a three or four digit number, often referred to as the CVV, or card verification value. The location of the CVV depends on the network payment processor used.

Visa, Mastercard and Discover: These networks have a three-digit CVV, and it is located on the back of the card.

American Express: This network has a four-digit CVV, and you can find it on the front of the card.

The CVV is designed to increase security, as you will likely need to have the card in hand to know this code number. For example, if someone has stolen your credit card number and tried to buy something online, unless the thief knows your CVV, that person will not be able to complete the purchase.

This code also comes into play when you order pizza over the phone. You give the credit card number, and the restaurant clerk asks for the expiration date and CVV. It’s easy to answer, of course, if you look at the actual credit card.

[Read: Best Cash Back Credit Cards.]

It is by no means foolproof. It is possible that a thief has your physical card and has access to the CVV. But the security code provides another layer of security against certain types of fraud. In particular, he fights what is called ” missing card fraud, “or CNP fraud, which can occur online and over the phone.

So be sure to keep your CVV number. And when you share it, make sure you’re on a secure website or on a phone call you initiated.


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Has your credit card number been disclosed?

As data breaches become more and more common, many people fall victim to credit card leaks. Unfortunately, most don’t find out they were part of an offense until they are notified by their financial institutions.

But how are credit cards disclosed in the first place? Are there ways to proactively find out if you are part of a credit card breach to minimize damage and protect your sensitive data?

How do credit cards leak?

A security incident such as a data breach affecting a bank or any other database in which your credit card or personal data is stored can expose your credit card information to the world. Once this happens, you may be part of a data breach. This information is often sold on the dark web.

Here are some common methods by which credit cards can be disclosed.

Phishing emails

A hook trying to phish emails

The sole purpose of phishing emails is to trick users into clicking fraudulent links or downloading malicious attachments. The links look believable and familiar, but may ask users to click on other questionable links or ask them to enter account information.

Public Wi-Fi networks

While it’s nice to be able to access public Wi-Fi while having coffee or waiting at an airport, there is always a risk.

Public networks are susceptible to data breaches and Wi-Fi fragmentation attacks. If you enter your sensitive information or access your bank’s website while using a public Wi-Fi network, you can easily fall victim to such attacks. .

Advice: Install a VPN on your device if you often use the Internet in public.

Skimming

An EMV chip

Although skimming mainly affects older types of cards with magnetic stripes, this method can still cause a lot of problems.

Skimming typically happens when a thief steals your credit card number while you are making a transaction, and then uses it to create a counterfeit card or perform online transactions that don’t require a physical card. Sometimes device skimmers are also used in places such as unattended terminals to steal card data.

Advice: Switch to EMV smart cards if you haven’t already, as they prevent device skimmers from interpreting the data. Special attention should be paid to unattended counters and payment terminals. If you see anything unusual in the card slot, avoid using it and alert an employee if possible.

Major data breaches

Large organizations such as retail businesses and banks can fall victim to data breaches, which can also put you at risk for credit card leaks.

One of the biggest data breaches of modern times struck Capital One in 2019 and affected tens of millions of consumers.

Insider attacks

Magnify a person as an insider threat.

Insider attacks occur when a privileged user like an administrator or even a disgruntled employee with access to a cardholder database decides to exfiltrate the data. While various measures (such as logging) exist in the banking system to prevent this from happening, the reality is that anyone with access can tamper with user logs if they wish.

Credit card leaks due to insider attacks are minimal, but there is always a possibility that they will occur.

Related: The Risk of Compromised Credentials and Insider Threats in the Workplace

Cardholder data in logs

Log files are much less protected than a cardholder database. Sometimes a developer can make a mistake that can go beyond review and instead send thousands of credit card numbers to log files.

Once this happens it can be very easy for attackers who are on the lookout to find credit card numbers in the log files.

form hijacking

Formjacking is a way to collect credit card data before it enters a secure environment. This type of attack uses script injection (via compromised static resources) to collect data as the user types it.

Have your credit card details been disclosed?

Worried about your credit card information being leaked? Here are some telltale signs to watch out for.

Strange purchases on your account

Seeing unknown purchases on your bank statement is a big red flag indicating that your credit card may have been breached.

Credit card leaks can happen at any time, so it’s important to continue to regularly check your bank account to stay in the know.

Small charges on your account

Most credit card thieves start with making small purchases on your credit card to avoid setting off red flags. A trickle of small charges that don’t sound familiar is a potential sign that someone has used your credit card for purchases.

Unknown business names on your statement

bank statement

If an unknown name appears on your statement for payments you have made, you should contact your credit card company to dispute the charge as soon as possible.

Noticing a payment made to a business name you are not familiar with could mean a credit card leak.

A lower available credit balance

Unexplained pending charges that indicate a reduced credit limit indicating that your credit card has been disclosed or tampered with.

If there are no justifiable large item purchases on your end, you should still investigate the real reason for the change in your available credit.

How to protect yourself against credit card leaks

It’s always best to be proactive and mitigate the risks associated with your credit cards. The following strategies can help you.

Use only secure websites

padlock

It is essential that you avoid entering personal information on unsecured websites. Look for a small padlock icon before the website address in the URL to make sure that the site you are trying to reach is encrypted using the secure HTTPS version of the Internet.

Although this is not a guarantee, it does give some assurance that the website practices a higher level of security.

Related: Does HTTPS Protect Data In Transit?

Do not give out your account number over the phone

Never give out your credit card or account number over the phone unless you are sure that the caller is legitimate. Be very careful of random fraudulent calls where a caller asks you for your credit card information.

Simply put: don’t share your private information over the phone!

Regularly check credit card statements

Regularly checking your statements is the best way to protect yourself against leaks and credit card fraud. As a general rule, you should check your statements at least once a month.

Immediately notify your card issuer or financial institution if you notice any suspicious charges.

Keep an eye on your card during in-person transactions

Never let a restaurant or retail store employee take your credit card and walk away with it. Once out of sight, the person holding your card can write down your card number, expiration date and security code, or make contactless payments!

Be proactive and limit the damage

Defend against data breaches.

Image Credit: TippaPatt / Shutterstock.com

A big part of preventing a data breach involves limiting the damage after your credit card details have been compromised.

Time is running out once you realize that your credit card could be tampered with. So act fast and freeze your broken credit card.

At the same time, continue to monitor your financials and sign up for identity theft and surveillance services.

Remember that by applying mitigation strategies before the damage occurs, you will not only limit the damage to your credit cards, but you can also prevent future attacks.


data breach
What is a data breach and how can you protect yourself?

A data breach can be devastating. Hackers target money and identity. How can you protect yourself against a data breach?

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Credit card debt plagues tenants as eviction moratorium expires

While total credit card balances have declined significantly during the COVID-19 pandemic, this overall improvement masks some significant challenges at the household level. Many tenants are caught in the crosshairs, and the situation could worsen as a result of the Supreme Court decision of August 26 which struck down the CDC’s moratorium on evictions.

Money Management International (MMI), the country’s largest nonprofit credit counseling agency, reports that about half of its recent counseling sessions have focused on housing issues, up from about one in four before the pandemic. . Tenants who turned to MMI for help in 2021 have accumulated an average of nearly $ 25,000 in credit card debtsaid Michelle Jones, the agency’s chief external affairs officer. In 2019, the average was around $ 3,000. This indicates that many have racked up substantial living expenses on their credit cards because they fell behind on their housing bills.

For context, the national average credit card balance is $ 5,313. according to Experian. Just over half of active credit cardholders carry month-to-month balances, the American Bankers Association said. And it is a very expensive debt; Bankrate sets the average credit card interest rate at 16.21%.

Multiple crises collide

Some 11.4 million American adults were behind on rent payments in late June and early July, a Center on Budget and Policy Priorities investigation revealed.

The pandemic is making a comeback, fueled by the Delta variant. The seven-day moving average of new COVID cases in the United States was 153,245 on September 1. as measured by the CDC. This was well above the seven-day moving average (88,047) recorded exactly one month earlier.

While total credit card balances were 15% lower in the second quarter of 2021 compared to the fourth quarter of 2019, according to the New York Federal, MMI’s experiences show how this improvement was not shared equally by all Americans.

A deeper dive into this Bureau of Labor Statistics data reveals a similar trend: general improvements mask the fact that not everyone is doing betternot by far.

The unemployment rate peaked at 14.7% in April 2020 and fell to 5.4% in July 2021. Although this is substantial progress, the unemployment rate is still higher today than it was before the pandemic. In February 2020, unemployment was only 3.5%. This means that the number of unemployed Americans fell from 5.7 million in February 2020 to 8.7 million in July 2021, and that doesn’t even include those who have stopped looking for work for various reasons.

The labor force participation rate, which includes workers and those actively seeking employment, declined 1.6 percentage points during the pandemic.

What to do if you are having trouble

While Congress has designated more than $ 45 billion in rental assistance in late 2020 and early 2021, the rollout has been bumpy and most of that money has not been spent. The Consumer Financial Protection Bureau has a useful list of rental assistance programs available to tenants and landlords. Certified housing advisers such as Money Management International can also help. The end of the moratorium on CDC evictions should make the distribution of this aid even more urgent. (By the way, some cities and states still have moratoriums on evictions, so find out about policies in your area.)

If you have good credit but have accumulated debt, consider getting a 0% balance transfer credit card. Suspending the interest clock for up to 20 months can save you a lot of money. Just make sure you are making progressyou shouldn’t see this as a shell game of moving debt from one card to another, and ending up where you started. Finding ways to increase your income or reduce your expenses can boost your debt repayment strategy.

For those with lesser credit, or even if your credit score is strong but you need a little extra nudge in the right direction, reputable nonprofit credit counseling agencies such as MMI can be extremely helpful. In addition to providing great advice tailored to your individual situation, they can negotiate lower rates with your creditors and consolidate your monthly bills into one payment you can afford. A common scenario is something like a four year payback with a 7% interest rate. These numbers are similar to the personal loan terms available to people with good credit, but accessible to a much wider audience.

Finally, while the window to appeal for goodwill may have expiredif you are late on your bills, you can only buy a limited time from a landlord, credit card issuer or other creditorI still think communication is a good idea. Don’t ignore the problem. At the very least, acknowledge that you are late and come up with a solution. Consider asking for more time to pay them off, a lower interest rate, or another break.

If nothing else, keep the lines of communication open. Hiding is not the answer. Face issues head-on before you get sued or find yourself in a corner where bankruptcy and eviction are your only answers. Getting out of debt is not easy, but it is possible. Don’t be afraid to ask for help along the way.

A question about credit cards? Email me at [email protected] and I would be happy to help.


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3 ways too much credit card debt can hurt your finances

Some people find themselves in credit card debt when too many surprise bills hit. Other times, credit card debt is something that slowly but steadily accumulates over time, to the point where it becomes less and less manageable.

As a rule of thumb, it’s best not to run into credit card debt at all. The more you accumulate, the more money you will lose in interest charges.

But that’s not the only problem with credit card debt. Here are some reasons why too high a balance could hurt you financially.

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1. This can leave you with a higher mortgage rate

The more credit card debt you have, the higher your credit utilization rate is likely to be. It is the ratio that measures your existing revolving debt against your total credit limit. Once this ratio exceeds the 30% threshold, it can lead to damage to the credit score. For example, if you have a total credit limit of $ 10,000 and you owe more than $ 3,000, you risk negative consequences. This, in turn, can make borrowing more expensive.

If you’re looking to buy a home, having too much credit card debt could leave you with a lower credit score – and end up with a higher mortgage rate. Plus, if you have too much debt that you monopolize too much of your income, a mortgage lender may turn you down completely.

2. It can make a personal loan more expensive

Just as you might end up with a lower interest rate on a mortgage when your debt load is huge, the same could happen with a personal loan. In fact, since personal loans are unsecured, meaning that they are not backed by a specific asset, lenders rely heavily on the credit scores of borrowers to determine rates. interest to be granted. But if a huge pile of debt lowers your score, it could mean paying a lot more to borrow.

3. It can cause you to lose lucrative credit card offers

There are many credit cards that offer attractive rewards programs and signup bonuses. These can put extra money in your pocket, but if your high level of credit card debt lowers your credit rating, you might not be eligible for these offers. If anything, you’re more likely to end up with a credit card that offers less rewards and charges a higher interest rate on new balances.

No longer have debts

If you’ve somehow climbed a huge pile of credit card debt, don’t despair. Instead, try to reduce that balance as quickly as possible.

Set a budget so that you can carefully track your spending, and cut as much spending as possible to free up money to pay off your debt. You might also consider finding a side job to raise extra money that can be used to pay off your debt.

At the same time, check to see if you qualify for a balance transfer, which will allow you to transfer your existing credit card balances to a new card with a lower interest rate. This, in turn, will make that debt easier and less expensive to eliminate. And the sooner you do it, the less your personal finances will be affected.


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Need to memorize your next year’s debit, credit, CVV card number?

Refuting reports that customers will have to remember their credit and debit card numbers, the Payments Council of India (PCI), the representative body of payment companies in the country, said the claims were false and that it was not necessary to memorize the numbers. .

The clarification comes after several news articles claimed that starting next year, people will need to memorize their 16-digit card numbers for online payments.

“Industry and PCI are working in alignment with the Reserve Bank of India (RBI) on possible secure card-to-file solutions that will ensure a nearly similar customer experience for online purchases while improving the security of information storage. ‘customer card identification,’ said a statement from the PCI reading.

In March 2020, the RBI asked payment system providers to come up with viable solutions to improve the security of storing customer card identifiers under relevant guidelines issued by it. In accordance with this, PCI shared the principles that the industry can adopt to develop such a secure card-to-file solution with RBI.

“We are working closely with RBI on developing a roadmap of possible solutions that could be adopted by the industry to secure the storage of raw card data. The solutions being developed would not require customers to manually enter their card number every time they make an online purchase, ”explains PCI. “The solutions will adhere to the security checks and controls and frameworks prescribed by RBI,” the PCI statement added.

According to reports, new guidelines proposed by the RBI prevent payment aggregators and merchants like Amazon, Flipkart, and Netflix from storing credit or debit card information used by the customer on their servers or databases. The new guidelines essentially mean that customers with debit or credit cards will now need to enter their 16-digit card number to make a payment.

Typically, the ecommerce model works on data stored by businesses that use it to market new items to customer demographics based on the information they have. Once the guidelines are implemented, it will become difficult for these sites to target their audience and reduce their reach.


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