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6 easy ways to protect yourself from skimmers

Filed under: Fraud and Privacy Issues on November 17, 2015 @ 1:11 pm

If you’ve ever worried about swiping your card at the gas pump, or wondered if it’s safe to take out money for one of those ATMs at the back of a convenience store, listen to your gut. Those are some of the most likely places to have skimming devices put there by criminals trying to steal your financial information.

In November, New York Gov. Andrew Cuomo unveiled a coordinated statewide effort to crack down on illegal skimmers. This New Yorker sure is happy to hear that!

New York regulators are collaborating to sweep the approximately 42,000 gas pumps across the state to find and remove the illegal devices. New York’s effort is similar to that of Florida’s, which found and removed more than 100 skimmers across the Sunshine State this summer.

Here’s what you need to know about skimming devices and how they can affect you:

Skimmer hot spots

While card skimming is falling fast at gas pumps and other point-of-sale terminals (down 81 percent from January to April 2014 when compared to the same period of 2015), according to FICO Card Alert Service data, it’s soaring at bank ATMs (up 173 percent) and at non-bank ATMs (up 316 percent).

John Buzzard, then FICO product manager, said in a May FICO blog post that the hot spots for skimming devices are “pretty much everything from Connecticut to Florida.”

How skimmers work

A skimming device is inserted over where you’d normally swipe your card, allowing it to capture the data contained in the card’s magnetic stripe. Some sophisticated skimmers also have a tiny video camera on them to steal your PIN code when you key it in. Or, there may be a hidden camera above or off to the side.

Hopefully, with New York’s anti-skimmer program, other state and local agencies will step up efforts to educate consumers and also catch more of these fraudsters in the act.

How to protect yourself

Here are six simple ways to safeguard your data from being skimmed before and after you swipe your card:

  • Always cover your hand from view as you enter your PIN.
  • Avoid using your debit card at gas stations, since credit cards have better fraud protection.
  • If possible, choose ATMs located inside a bank. Because of security cameras, it’s less likely that a thief would attempt placing a skimming device at such a location.
  • When you use an ATM machine, check for signs of tampering, such as if something is loose, crooked, colored differently or just doesn’t look right, particularly around the area where you insert your card. Always trust your gut and walk away if something seems off.
  • Report suspected skimming devices to the police. If you think you used a gas pump or ATM that was compromised, contact that credit issuer or bank to report the possibility of fraud.
  • Regularly monitor your banking and credit accounts for unauthorized transactions. You also can set up text and email alerts so you are notified whenever your card is used. If you do spot anything amiss, call the company’s fraud department right away.
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11 easy ways to protect your security online

Filed under: Fraud and Privacy Issues on November 3, 2015 @ 1:26 pm

Our phones have become our lifelines. We check email, get Facebook updates and do our banking while on the go.

An American Bankers Association 2015 study found that two in five Americans (39 percent) use a mobile device to manage their bank account at least once per month. And fraudsters are increasingly aware of this.

“Mobile banking provides an unprecedented level of convenience for bank customers, and while it is a safe way to conduct banking transactions, customers need to remember that any device used to connect to the Internet is vulnerable,” said Frank Keating, ABA president and CEO, in a press release.
It’s not that hard to practice safe security online. But too many of us aren’t.

For starters, a survey from Experian’s ProtectMyID found 50 percent of respondents don’t have all their Web-enabled devices password-protected. Another 50 percent don’t check to see if a website is secure.

“Always practice good security habits on an ongoing basis,” says Michael Bruemmer, vice president of consumer protection at Experian. “As we head into the holiday shopping season, this is even more important as it’s the peak season for criminals to commit identity theft and fraud.”

What more can we do?

The ABA and ProtectMyID suggest consumers take these steps to bolster online security:

  • Avoid using public Wi-Fi hot spots that make it easy for thieves to hack into the information stored on your mobile devices.
  • Password-protect your phone since it provides access to sensitive information and accounts.
  • Log out completely and close the app when you finish a mobile banking session.
  • Enable remote location and wiping software to track your phone if it’s lost or stolen, allowing you to wipe all of the data if your phone goes missing.
  • Review credit reports regularly, and watch for signs of fraud.
  • Shop on sites you know that offer secure checkout (the URL will show “https” during the checkout process instead of simply “http”).
  • Beware of mega deals from sites you’ve never heard of. The old adage is true: If a deal seems too good to be true, it probably is.
  • Use a credit card when shopping online since card issuers can hold customers liable for only the first $50 (or less, depending on the issuer) of fraudulent transactions. If your debit card is used for unauthorized charges, you may be able to get the money back, but you may have to deal with an overdrawn account, a much higher liability amount if you don’t report the theft in a timely manner (up to $500) and more hassle since you don’t have access to your money.

Identity theft is another worry. The ProtectMyID survey found that 71 percent believe they will be a victim of identity theft in the future. It’s not hard to see why after dozens of data breaches at credit card companies, health insurers, retailers and government.

“These sectors will continue to be the top targets,” Bruemmer says.

Some additional tips from the ABA and Experian to safeguard your identity in this era of data breaches:

  • Beware of mobile phishing. Avoid opening links and attachments in emails and texts, especially from senders you don’t know. And be wary of ads (not from your security provider) claiming that your device is infected.
  • Wipe your mobile device of your data before you donate, sell or trade it using specialized software or using the manufacturer’s recommended technique.
  • Be aware of shoulder surfers and your surroundings especially when you’re punching in sensitive information.

“And make sure your PC is secure,” Bruemmer says. “Some identity thieves gain all of their victims’ information through spyware, malware and keystroke loggers installed on non-secure computers. This allows them to track all of your information and use it for their gain.

“By keeping up to date with your computer’s antivirus and having a firewall in place, you are adding an essential layer of defense needed for even the occasional online shopper.”

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Pay by ring or jacket: Lines blur between fashion, finance

Filed under: Finances — Brianti Downing on October 29, 2015 @ 3:15 pm

When Marty McFly went into the future, he didn’t see people paying for hoverboards with their accessories in 2015, but that’s the world we live in now. The lines between fashion and finances have blurred as tech companies cash in on the convenience of paying for lunch or buying a dress with your watch, ring, jacket or even pants.

Case in point: I was at a McDonald’s recently with a colleague and he was pleased that the world’s biggest fast-food chain accepts Apple Pay.

“That means I can pay with my watch,”ť he said, flashing his new Apple Watch.

ApplePay and a host of other payment-ready gadgets and fashion accessories use near field communication, a short-range wireless transmission of payment data between two NFC chip devices held close together.

Apple may be one of the biggest names cashing in on the craze, but it’s not the only company developing futuristic fashion-forward payment options:

  • This week, MasterCard debuted at the Money 20/20 conference in Las Vegas partnerships with designer to the stars Adam Selman, General Motors, wearable tech company Nymi, smart jewelry maker Ringly and others to “give consumers the freedom to shop using the device or thing that is most convenient to them.”ť Capital One is expected to roll out the first of these gee-whiz payment gizmos in 2016 in the U.S.
  • Scottish company Lyle & Scott created a jacket with Barclays’ bPay technology in the cuff, Engadget reports. While an Apple Watch could run you anywhere between $349 and $17,000, depending on the model, a “Contactless Jacket”ť costs 150 pounds (about $230 US). The downside is that you have to wear the jacket or carry it with you to make payments with it.
  • Last month at London’s Fashion Week, wearable payment technology lined the catwalks. Items worn by the models at British designer Henry Holland’s Spring 2016 show could be bought by audience members using NFC-enabled rings. Holland partnered with Visa Europe in the fashion show first.
  • London startup Kerv, which used Kickstarter to raise funds, says its ring works anywhere contactless payments are accepted. It doesn’t need to be charged or paired with a phone, and it’s waterproof. Oh, and the inner band now comes in seven colors.

But as we get closer to a world in which you can pay for a bar tab with the swish of your skirt or by pointing a mug-laden ring finger, what about worries about fraud? Fashion accessories aren’t widely used for contactless payments yet, but we know about the vulnerabilities of bank cards that use the same technology.

In an October news report, a Londoner said money was stolen from his bank account while he was on a train. He told reporters a thief bumped into him, using a contactless payment reader to steal 20 pounds (about $30.61 US) out of his account. This kind of theft is possible. In July, researchers with the consumer association Which? were able to bypass security measures on contactless bank cards, stealing key details from 10 account holders.

While cardholders can buy covers that claim to block illegal transactions, wrapping aluminum foil around your ring might not send the fashion statement you hoped for.

There have been over a billion contactless payments made in Europe, and contactless payments are growing in the U.S. NFC World reports that there were 185 million contactless payment cards shipped to people in 2014 — a 35 percent increase.

That means by the time we do get the flying cars seen in “Back to the Future Part II,”ť back in the news this past week, you could be giving the car dealership a down payment with a wave of your hand.

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Love, marriage and credit scores: Fed finds links

Filed under: Credit Score on October 20, 2015 @ 2:32 pm

Credit checks are run for a credit card, some job applications and to get a home loan. Why not when couples are thinking about tying the knot?

A new working paper for the Federal Reserve Board finds that a couple’s credit scores “play a role in the formation of committed relationships — such as marriages and long-term cohabitations.”

As columnist Michelle Singletary writes in The Washington Post, “The researchers found that when it comes to credit scores, opposites don’t attract.”

“When there were wide gaps in scores when people first met, the more likely they were to break up. Partners who both have high scores tend to stay together,” writes Singletary.

The researchers’ report looked at credit scores of 12 million people over a 15-year period. The data came from the Federal Reserve Bank of New York Consumer Credit Panel and Equifax, one of the three leading credit agencies.

Other key findings:

  • Individuals with higher credit scores are more likely to form committed relationships and couples with higher initial credit scores are more likely to maintain their committed relationships. Why? Credit scores reflect an individual’s general trustworthiness and that appears to mirror one’s commitment to non-debt obligations.
  • Those with the lowest credit scores are about 30 percent less likely to form a committed relationship in a given year, the researchers found. Yet those with the highest scores are slightly less likely than individuals with a credit score between 750 and 800, the second-highest group, at finding a partner.

So how can one raise one’s credit score? Quick fixes for your credit score include charging less and paying down any balances, asking for a credit limit increase and paying off cards early.

No word from on whether credit scores will be added to online profiles as a possible predictor of long-term compatibility.

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Taking the payoff plunge with my cards

Filed under: Debt Tips on September 29, 2015 @ 2:45 pm

A while back, I shared a couple of credit confessions with you, one of which was that I – a credit card writer – was carrying around a few thousand dollars in debt, divided between two credit cards. As I explained, this was partially by choice, since I did technically have the savings to pay off the cards, but am cautious about depleting that savings since I have the unsteady income of a freelance writer. 

After coming into a lump sum of cash thanks to a few extra freelance writing projects this summer, however, I decided that enough was enough. It was time to say goodbye to my debt for good (well, almost). Here’s what I did:

  1. I paid off my highest interest card (hooray!). I probably shouldn’t admit this, but I was carrying a balance on a card with an interest rate above 20 percent. It happens to be a co-branded rewards card with a lot of perks, so that’s sort of typical, but it’s counterintuitive that I was paying interest on something designed to save me money. So, good riddance to that balance!
  2. But less than 24 hours after using my windfall to pay my creditor, my refrigerator died. I’d already fixed it once, so I knew it wouldn’t be worth it to call a repairman. For a second, I felt defeated. Here I am, finally paying off my credit card, and now I have to shell out hundreds for a new appliance. Luckily, because I’m a stickler about keeping my emergency fund intact, I was able to purchase a new refrigerator using cash.
  3. Because the payoff on card No. 1 and the unexpected refrigerator purchase wiped out my extra cash, I couldn’t put anything toward my remaining card balance. But I was determined to do something. Although card No. 2 has a less horrifying interest rate (13.99 percent), I’m really sick of wasting money on interest. I began shopping around to find a good balance transfer offer. Since I wanted to get a new card anyway (to replace that high-interest co-branded card I no longer want to use), the timing was perfect. As luck would have it, an offer came in the mail for 0 percent on balance transfers for 15 months; 12 months of 0 percent APR on regular purchases; and $250 cash back if I spend $1,000 in the first three months. After analyzing my spending habits, a card that rewards cash back on everyday purchases is the best way for me to really maximize my credit card usage since I’m not much of a traveler.
  4. So, I did it. I applied, was approved, and transferred my last remaining balance to the new card. This is not a decision I took lightly. I crunched some numbers to make sure I’d still save money even with the 3 percent balance transfer fee that was tacked on. If I pay off the transfer balance within the 0 percent interest rate period (I took the balance and divided by 15 to make sure it’s a number my budget can handle), it will be a good move for me. And, if I take advantage of the $250 cash back offer on the new card, it will more than cover the balance transfer fee. I can easily spend $1,000 in the first three months by using the card for groceries and gas. The key going forward, however, is that I intend to pay the balance in full each month on the new card (no more revolving balances for this girl!).

The result: I’m moving forward with my financial goal to be debt-free (just like the inspiring bloggers I recently wrote about) and for the rest of that journey, I won’t be paying any more interest on my remaining debt. I also have a new credit product in my arsenal that I plan to use strategically.

Yes, readers, I’m finally practicing what I preach about plastic, and it’s a great feeling.

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Big life changes bring money anxiety

Filed under: Finances on September 14, 2015 @ 12:23 pm

Ahh, life’s big changes. They can be exciting, but also can induce financial worries. If money was no object, changing jobs or buying a new home would be less stressful. Nevertheless, Americans don’t seem to be letting money woes get in the way of their future plans.

According to the Liberty Mutual Insurance New Beginnings study (which surveyed nearly 2,000 Americans over age 18), 42 percent of people said they were planning to make at least one major life change this year. Forty-four percent said they expected to move or undertake a major home renovation, while 22 percent were on the job hunt. Millennials, however, are the most focused on new beginnings, with nearly two-thirds saying they will be making a life change this year.

But here’s the kicker: All of these plans for the future can bring lots of money anxiety. Those millennials with the big plans also happen to be the most stressed in terms of finances, with 89 percent saying they were most concerned about money. Boomers weren’t far behind with 73 percent of them saying the same.

For the most part, I found these survey results encouraging, and on par with some of the emotions I’ve had in my own financial decision making over the past few years. A major life change should be accompanied by some apprehension – especially if it involves going into debt or the flow of your income. For instance, becoming a full-time freelance writer was hardly something I leaped into. I had been pondering the move for a few years, but worrying about not having a steady income prevented me from making the move. Ultimately, it was getting laid off by my full-time employer that gave me the kick I needed to make it happen. (So far, so good.)

Here are a couple of other takeaways from the survey findings:

  • Americans are more aware that their financial standing matters and has a direct correlation to their quality of life. No longer are we a nation that throws caution to the wind, taking on mortgages we really can’t afford (actually, we won’t qualify to do that anymore even if we tried, which is why strong credit and overall financial health is so important). The economic recovery also is giving us more confidence to look for better job opportunities. In other words, we’ve adopted a positive but prudent outlook, which makes sense after having lived through the rocky economic downturn of the past few years.
  • When it comes to making big decisions, a little worry is a good thing. Concern over how much debt you can reasonably take on if you move or invest in a home, and how you’ll pay it back, will help you to make smarter borrowing decisions. The same should go for making smaller purchases, too. Likewise, weighing the pros and cons of a job change, and having a financial plan in place – even if that means saving up before you make the leap – will help protect you from a gap in income.
  • Be willing to invest your own time and effort in addition to money to achieve your goals. Today’s younger adults are the most willing to participate in their own home improvement projects. According to the survey, 9 in 10 millennials (and 7 in 10 overall) said they will put some DIY effort into their home renovations. And more than half (55 percent) of respondents are doing so to improve their home’s value – a wise investment.

As Americans, we strive to advance our careers, own our own homes and be more self-sufficient. As per the survey, worrying about money comes with the territory. In my book, being more cash conscious is a good thing that will ultimately make us more financially prepared for the major life changes we seek.

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Freshmen, here’s what to buy (and not buy) for college

Filed under: Student on August 28, 2015 @ 9:07 am

As summer gives way to fall, a new crop of college freshmen are stocking their dorm rooms and awaiting orientation. Retailers try to convince students and their parents to buy an endless array of gadgets and other goodies for their college dorm, but the truth is you don’t need a pimped out dorm room to have a great college experience. In fact, you probably need a lot less than you think.

Before I left for college, I bought bookshelves, shoe racks and all kinds of stylish décor pieces with a friend before flying across the country for freshman orientation. My parents paid to ship those items 3,000 miles — only to realize once we arrived that there was no space for them!

Fortunately, my mother saved the receipts and returned my beloved shoe rock, but we still lost shipping costs. I’m likely not the first person to make this mistake, as many national retailers now allow you to select dorm items in your local store and pick them up at a store closer to campus for free.

Here are my tips on what to buy—and what not to buy for your dorm. 

What to buy:

  • Extra set of extra-long twin sheets: Most dorm room beds are extra-long twins, and it’s easy to find extra-long sheets during back-to-school season. While you’re shopping, grab an extra set. That way you’ll have clean sheets even if you spill on them or if you’re too busy for laundry during mid-terms and finals.
  • Bed risers: Most dorm rooms are short on storage space, so bed risers are a cheap and easy way to add more space for clothes, sporting equipment, or whatever else you need to stash. Now there are even bed risers with built-in power strips, or you could create DIY bed risers.
  • Noise-canceling headphones: If you’re sensitive to noise, you’ll want a good pair of noise-cancelling headphones to block out the sound of your drunk roommate or your neighbor’s music while you’re trying to study or watch a movie.
  • Power strips: Electricity is included in the cost of most dorms, but you may have limited outlets for charging your phone, computer and other electronics. Bring at least one power strip so you and your roommates won’t have to fight over outlets.

What not to buy:

  • A car: Kiplinger lists cars on its 13 things college students don’t need, and I completely agree. It’s not just the expense of gassing up the car and keeping it running, but also parking and the fact that when you have a car, you’ll inevitably get roped into chauffeuring around your carless friends and get constant requests to borrow your keys. Nissan and Enterprise recently announced a college car rental partnership so that college students can get cars on demand rather than bringing their own. Unless you’re commuting to a job or internship on a regular basis, car-sharing could make a lot more sense than bringing your own. Inexperienced drivers are also expensive to insure so that’s another cost to consider.
  • An iron and ironing board: Aside from students who intern at a bank or law firm, very few undergrads wear clothing that requires ironing. If you need to iron a shirt for a job interview or a date, chances are someone in your dorm will lend you their iron and ironing board.
  • A TV: With tons of apps that allow you to watch TV shows and movies on your smartphone, tablet or computer, why waste money and space on a TV for your dorm room? If you have a TV in your room, it’s all too easy to get sucked into mindless reality shows instead of studying or leaving your room to meet new people. For those times when you do want to unwind with a movie or show, your dorm probably has a lounge with a TV anyway. I remember (and this might date me) watching “Will & Grace” on Thursday evenings in my dorm’s common room and socializing during commercial breaks.
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Buying vs. renting: One year later

Filed under: Budgeting on August 20, 2015 @ 2:48 pm

Many millennials have postponed home ownership in favor of paying down debt or enjoying a more mobile, experience-centered lifestyle. As a millennial myself, I rented for nearly a decade post-college. Finally, last year my almost-husband and I decided to take the plunge into home ownership before we tied the knot (also a millennial trend).

We’d saved up for a down payment, built up our credit histories and yearned to put down roots and feel settled rather than being forced to move when the rent skyrocketed or the building we lived in sold.

Now, a little over a year later, I can reflect on the pros and cons of buying our first condo.


  • Ability to customize our space: One of the major downsides to renting is not feeling like the space is really your own (that was especially true when we lived in a furnished rental with someone else’s furniture and decor). We didn’t like the carpet in our condo’s bedroom, so we had it replaced. Now I smile every time I feel the soft new carpet on my feet. We’re also thinking about mounting our TV on the living room wall and upgrading our kitchen countertops, which we couldn’t do in a rental (though some of these changes do require approval from the condo association). Even if our landlord let us alter their space, it wouldn’t be worth sinking our own money into fixing up someone else’s property.
  • Freedom to have pets: Back when we were renters, we really wanted a dog, but a lot of landlords and management companies don’t allow them or even charge pet rent to tenants with animals (in addition to pet deposits). Now that we own a condo in a dog-friendly building, we rescued an adorable Chihuahua and don’t have to worry about losing our pet deposit or paying pet rent for him.
  • Potential to improve credit: My credit is already strong, but lenders like to see a mix of revolving and installment loans. and because I’ve never had a car loan or a student loan, my credit score reflects only payments on credit cards. Types of credit in use accounts for 10 percent of your FICO score, so making timely payments on a mortgage should help improve my score by showing lenders that I can handle different types of credit lines.
  • Less reliance on lease cycles: Renters often have to plan their lives around lease cycles. In one case when I needed to move before the end of my lease, the landlord agreed to let me find a subletter. In another case, my partner and I had to move for his job and wound up paying three months’ rent on an empty apartment because we moved mid-lease and the management company claimed they couldn’t find any new tenants in the off-season (they refused to let us show the apartment ourselves or sublet). Now, if our circumstances change and we need to move, we could in theory rent out our condo (which is allowed by the association) rather than pay for an empty apartment or put the condo on the market. We also know what our mortgage payments will be for the foreseeable future instead of getting sticker shock when our lease comes up for renewal and the landlord announces a rent hike.


  • Special assessments: Our building has not had any special assessments, but a friends’ condo building did recently. Renters don’t have to worry about ponying up extra cash to replace building’s roof or elevator if needed, but owners do in some cases (in others, the building’s contingency fund might cover it). If we had a special assessment in the future, it could easily run into the five figures, so that’s a good reason to maintain a cash cushion just in case.
  • Maintenance: Our condo is a little over a decade old, so we haven’t had any major repair problems (knock on laminate flooring). When the flush handle broke off the toilet, plumbers quoted us around $100 to replace it. That wouldn’t have broken the bank, but after a $10 trip to Home Depot, we managed to fix it ourselves! As the appliances and our condo age, we may have bigger repair expenses in the future, which we wouldn’t have to shoulder as renters. And I’ll admit, every time we scratch the walls moving a piece of furniture or otherwise damage our most expensive purchase (our condo), I cringe a lot more than I did as a renter.
  • Bigger commitment: While waiting out a lease cycle is a pain, paying the mortgage on a home that no longer fits your needs is even bigger burden. It’s hard to predict where we’ll be personally or professional five or 10 years from now, and it’s likely that a one-bedroom condo won’t be our forever home. But rather than buying (and paying for) a bigger home than we need right now and growing into it, it made sense to us to buy something that fit our current lifestyle and plan on selling or renting it later if needed. That strategy may backfire on us, but at least we’re not overextended and have a home we enjoy now.
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How I’m maximizing card rewards for my wedding

Filed under: Credit Tips on August 12, 2015 @ 9:08 am

My wedding is just one month away. My fiancé and I have been strategizing about how best to accumulate and use credit card rewards to subsidize some of the costs of our wedding and honeymoon.

The average cost of a wedding was over $30,000 in 2014, reports wedding site With a smaller guest list (about 50 people compared to the average of 136) and some savvy rewards use, we hope to trim that cost while still creating beautiful memories with our friends and family.

Here are some of our strategies.

  1. Invitations and guest book. Naturally, I ordered our invitations and guest book online using a discount code and paid for them using a credit card that earns travel rewards (as points out, paying for wedding expenses with a credit card also gives you purchase protection). But to sweeten the deal even further, I also used a cash-back savings portal. Once we get our wedding photos from our photographer, I plan to order thank you cards using the same strategy.
  2. Venue. We chose a beautiful venue that could host both the ceremony and the reception, so there’s no transportation costs in between, and they handle all the rentals for things such as tables, chairs and china. We put down a small deposit to reserve our date and the balance is due closer to the wedding. But once I opened a new credit card with a generous points bonus for spending $3,000 in the first three months, I made another deposit towards our balance at the venue. Instead of making lots of little transactions to meeting the spending requirement (or worse, missing out on the bonus altogether), I met it in a single transaction. Since we knew we’d have to pay that money eventually, we figured we might as well time it to get the most rewards and avoid a giant bill the month of the wedding.
  3. Honeymoon. Our honeymoon in Europe is heavily subsidized by Delta Skymiles and Marriott points. (In case you’re curious, Hack Your Honeymoon shares a pretty sweet around-the-world honeymoon that costs less than $1,000!) Since my fiancé travels frequently for work, he had more than enough Skymiles for a round-trip ticket. I, on the other hand, was a few thousand miles short, so I made up the difference by purchasing things I’d buy anyway through Skymiles Shopping. I also synched up my credit cards with Skymiles Dining so that I earn miles when I pay with those cards at participating restaurants. The miles don’t show up overnight, so I started building them up a few months in advance. Once we arrive, we’ll be paying for things using a rewards card with no foreign transaction fees as much as possible and enjoying how far our dollars can go in Europe. Then we’ll pay off the balance as soon as possible to avoid interest charges.

One strategy we haven’t used (because we plan to use our rewards for future travel) that could be helpful is redeeming points for gift cards to cover wedding costs. For instance, a Nordstrom gift card might cover wedding attire, while a Michaels gift card (paired with a mobile coupon, of course) could buy craft supplies for wedding décor or favors. Getting a little creative is a great way to save money and personalize your wedding!

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“I cut up my credit cards” experiment

Filed under: Credit Card Tips on August 4, 2015 @ 9:13 am

What would it take to make you do something as extreme as cutting up every piece of plastic in your wallet? When one of my friends announced on Facebook that she was doing that very thing, I had to know why. So she agreed to tell me and let me share her story.

First some background… Maria admits she’s always been a bit of an impulse shopper. “If I want something, I buy it, and then figure out how to pay for it later,” she says. While that’s not exactly the approach that personal finance experts would recommend, she’s always managed to keep debt manageable. “I’ve never had too much credit card debt. When it started to get a little high, I’d cut back and pay it off before getting it back up again.”

The last straw
I had assumed it was a giant bout with debt that got Maria fed up with credit cards, but when I found out that wasn’t the case, I became even more intrigued. Here’s what did it: At the end of May, Maria noticed two charges on her statement that she knew she didn’t make. “I called up and got those resolved, but it left me with such a sour taste in my mouth,” she says. Anyone who has been through this knows the feeling — having your personal financial information violated is creepy and scary.

Maria took the fraud attempt as a sign that she was ready to break up with plastic for a while. But for her, she knew it wasn’t enough to simply leave her cards in a drawer at home. She wanted to make a clean cut — literally.

“I have a friend who uses only cash — no debit or credit cards — and I was curious if I would be able to do the same. So I decided to cut up the cards and see if I could do without them, too,” she explains.

The big day
Thinking it and doing it are two very different things, says Maria. When the day came when she was ready to take a scissor to several of her major credit cards and store cards, she was nervous and had some second thoughts. “I thought, what if something happens and I need a credit card?”

That’s a valid concern since not having any accessible credit can pose challenges down the line. So while Maria got ready to snip, she didn’t actually call to close out the accounts. In fact, after doing the deed, she actually called one of her credit issuers to ask for a replacement card to keep at home in case of an emergency.

The most surprising thing for Maria was that after posting the photo of her cards in pieces on Facebook, most people told her she had made a mistake. “Of course, this was on Facebook, where everyone has an opinion and no one is scared to share it,” she says.

The game plan
After the big card cut-up, Maria’s plan was to use either cash or debit to pay for everything. She knew she’d be missing the added layer of security credit cards offer, but that was something she could live with. “I know there is the risk of someone hacking my debit card, but I am very careful about where I use it, so that isn’t a concern to me,” she says.

It also forced her to think before she swipes. “I’ll admit, it’s hard not buying something just because I want to. I remember walking into TJ Maxx and seeing a beautiful Dooney & Bourke bag on sale, but I couldn’t buy it because I didn’t have a credit card and didn’t really have the money right then and there,” she says. In the end, though, she was happy she didn’t buy it. “It does make me think more about the purchases I’m making, that’s for sure.”

Second thoughts
Two weeks into her experiment, Maria had to call a chimney repairperson to her house to fix the chimney liner. “I had just run out of checks and was still waiting for delivery of the new ones, so I had to go to the bank to make out a certified check to pay the balance,” she explains. She didn’t want to pay almost $3,000 in cash. Had she had a credit card, she wouldn’t have had to make the trip to the bank or pay the certified check fee.

Other than that, Maria says she does miss having access to cardholder-only sales, such as when certain store cards allowed her to save an extra 10 percent. “That 10 percent adds up over time,” she says.

The verdict
So far, other than spending less on impulse items (which is probably a good thing!), Maria has adjusted well.

As for whether or not she plans to ever use credit again, Maria says she probably will, but definitely not in the same way. “This has forced me to be more thoughtful about my purchases. But ultimately, I do feel more secure paying with credit cards than debit cards. So while I don’t regret trying this, I don’t think I’ll keep it up.”

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