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5 ground rules for your teen authorized user

Filed under: Student on December 19, 2014 @ 1:34 pm

Tell me if you know the answers to these questions…

What’s the best way to handle a credit card?

Why is that so important?

In preparation for making my 17-year-old an authorized user on one of my cards, I asked him these questions this weekend. He passed with flying colors. More on that later…

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5 ways to protect against ID theft over the holidays

Filed under: Fraud and Privacy Issues on December 17, 2014 @ 10:43 am

Every time you swipe your card to buy a gift, is your holiday cheer overshadowed by fears about ID theft? Well, join the (holiday) party.

A survey from Experian’s ProtectMyID shows that the data breaches that have happened over the past year or so at major retailers have got consumers thinking about identity protection this season.

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Don’t let emotions blow your holiday budget

Filed under: Budgeting on December 12, 2014 @ 12:54 pm

When our kids were younger, and the holidays were a major expenditure, I always felt overstretched financially. Every year I came up with a holiday budget, and every year, I’d break the bank.

There was even a time when I bought with credit cards and worried about the how to pay them off in January. Bad idea.

I’ve learned my lessons since then, and it seems I’m not alone.

More Americans are holiday shopping with cash set aside for that purpose, while fewer are putting their holiday expenses on credit cards, an Accenture study has found.

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5 clever ways to cut your holiday spending

Filed under: Budgeting on December 10, 2014 @ 10:40 am

If you didn’t save up for the holiday season, you might not be feeling very merry. Celebrating can be expensive, though there are ways to trim costs.

A Gallup survey taken in early December shows that the average American plans to spend $740 on Christmas gifts — $30 less than last year. Gallup calls this amount “modest.”
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How I still love to cook, but on half the budget

Filed under: Finances on December 4, 2014 @ 10:28 am

Confession: I love to cook. I follow a gazillion foodie blogs, bookmark tons of recipes and waste way too much time on Pinterest drooling on pretty food photos.

I used to spend at least an hour (if not two) on Sundays choosing recipes based on my whims, then I’d head to the grocery store, and possibly the health food store and a specialty store or second grocery store if I needed to hunt down an unusual ingredient.

Before I took a hard look at our grocery expenses, my husband and I had been budgeting $600 a month, which seems outrageous for two people. And sometimes we went over: Last April, we shelled out over $800 at the grocery store. I knew something had to change. So, I decided to rethink the way I plan our meals and shop for food.
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3 banking lessons I learned the hard way

Filed under: Banking on November 26, 2014 @ 10:47 am

Ever had a disappearing bank deposit? I did recently, and I was convinced my bank had lost my money. But the whole thing turned out to be my mistake.

The situation was embarrassing and stressful, but I did learn a few lessons. My problem started innocently enough. Back in mid-August, I deposited two big checks totaling a little over $5,000 at an ATM. Then, in September, I went over my online banking records, adding the transactions to the spreadsheet I use for my household budget. But I couldn’t find any record of those two deposits.

After searching through my online banking records for about an hour, I went into my bank and asked a manager if he could look at my account and find the deposits. He couldn’t. So, I had to request copies of the checks from the issuers, both of which had been cashed, and supply those and other documentation to the bank manager. He forwarded them to the bank research department.

After two weeks, the manager emailed to ask which debit card I had used to make the deposits. Looking back, I realized that my main debit card had been deactivated and replaced in mid-August, probably because I had swiped it at Home Depot during a data breach.

I remembered that, because my replacement card hadn’t yet arrived at that point, I had used a different debit card to make that mid-August deposit. That card was for a secondary account I rarely use, and that wasn’t tied to my online banking. I had a forehead-slapping moment, checked that account and found the money.

Then, I had to email to admit my mistake to the manager who had been helping me. I definitely felt silly. But, some good did come from the situation. Here are three lessons I learned:

1. Swipe your debit card sparingly to lessen the chance of fraud. As I’ve written before, having my debit card replaced twice in a year due to data breaches made me to rethink my swiping habits. Every time your card has to be replaced, it can cause financial hassles and mistakes, Consumer Reports points out. For example, if you have automatic billing set up with a creditor, you have to remember to call to give them your new card number. In my case, I didn’t have my regular debit card available to make my deposits the way I usually do, and that tripped me up.

2. Don’t make large deposits at the ATM. Even though my deposits didn’t get lost, I learned it does happen. As About.com Money points out, depositing into an ATM usually is safe, but you should use a teller for big deposits: “You can find horror stories of deposits at ATMs that went horribly. Money vanishes, there’s no record of the deposit and so on.” I read a few such tales while doing some online research when I thought my money was missing. I also talked to the manager at my bank and learned that banks typically have a third-party company service their ATMs. That means a company removes the deposited checks and cash, and takes those to another location to reconcile everything. That can make tracking down missing money more complicated. But depositing directly with a teller ensures that your transaction will be part of the bank branch’s records for that day. (The manager at my bank swears by mobile deposits where you take a photo of your check and send it in, partly because the consumer keeps the original check in case of problems.)

3. Keep deposit receipts organized. When I’ve deposited checks into an ATM in the past, I always requested a receipt with the check image on it, just for clear proof that I made the deposit. But I’ve never had a system for organizing those receipts, and they often end up crumpled in my wallet or thrown out. During my bank debacle, the bank manager asked for my deposit receipts, but I didn’t have them. Personal finance expert Suze Orman recommends keeping ATM receipts for a month, until you’ve checked them against your monthly bank statement. I started a file folder to hold my deposit receipts so they don’t get lost or tossed.

By learning from my mistake, I’m hoping that if I do ever have a deposit that actually goes missing due to a bank error, I’ll be able to get it resolved quickly and easily.

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How do you know if that insurance call is legitimate?

Filed under: Fraud and Privacy Issues on November 21, 2014 @ 1:25 pm

An email appeared in my inbox recently with the subject line: “Protect yourself from insurance fraud.” It was from my health insurance company.

Insurance fraud has been on my mind in recent months after I had emergency surgery over the summer. I was bombarded with bills, and it made me more aware of how vulnerable our medical information is.

Insurance and Medicare fraud is a many-headed monster. The insurance companies get billed for unnecessary or fake services and equipment, which drives costs up. But the issue that affects consumers directly is medical identity theft, which is when fraudulent charges and incorrect information can end up on your medical records. In addition to posing health risks as a result of erroneous information, it can also harm your credit score if bogus, unpaid charges make it onto your credit reports.

So, when the email landed in my inbox, I immediately took a look.

Apparently, scammers are calling people and trying to get personal information by identifying themselves as employees of my insurance company.

I was hoping for hard advice on how to weed the scammers from the legitimate calls. I was sadly disappointed.

The email began by detailing what legitimate insurance representatives will say when they call a member (pretty helpful). It noted specifically how the company would be identified (very helpful). Then, it said what information insurance reps may ask for (not at all helpful). It turns out I might be asked for my birthdate, address, information on my ID card, even information about my plan and medical history. Remember, this is when the insurance company calls me.

Wow. Really? This is supposed to help me weed the bad guys from the good guys?

That raised the question: How in fact do I know that a call is legitimate?

I turned to the FBI, hoping for a little clarity. There was some good advice about avoiding “rolling lab” schemes at health clubs, retirement homes or shopping malls, which perform unnecessary or fake tests, then bill your insurance company or Medicare. When you use these labs, you also run the risk of inadvertently giving personal information that can be used to steal your medical identity.

The FBI also warns against doing business with phone or door-to-door medical salespeople who say their services are free. But that was the extent of their advice about phone calls.

Then, I looked at the Federal Trade Commission’s website about medical identity theft. It went into a bit more detail:

  • Be wary if a caller says he has free health services or products, but he needs your health plan ID number.
  • Don’t share medical or insurance information with anyone unless you initiated contact. (I’ll add that if someone claiming to be with your insurance company or Medicare calls, get his name, employee ID number and the reason for the call.  Then, call back using the number on your card.)
  • Be mindful that a scammer may claim to be with your doctor or pharmacy and probe for personal information.

The Office of Inspector General at the U.S. Health and Human Services Department warns of a couple of current phone fraud scams:

  • Phone scammers are claiming to be conducting a health survey, then asking for your Medicare number.
  • Telephone marketers are pretending to be with Medicare or Social Security and asking for payment over the phone or Internet.

AARP reported in the summer that there were robocalls offering a free medical alert device, with some callers claiming to be from AARP itself. During the call, would-be victims were instructed to press1 to get their device and 5 to refuse.

So when you get one of these calls, what do you do? Two things: Let them do the talking, and if you don’t like what you hear, hang up.

It helps to stay up on the latest scams, because it keeps you mentally prepared, but it really comes down to not being afraid to be rude.

We were taught not to hang up on people. But this is guerrilla warfare — the best way to protect your medical identity and your health is to hang up when the call gets weird.

It’s really that simple.

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Just how much do data brokers know about you?

Filed under: Fraud and Privacy Issues on November 20, 2014 @ 1:39 pm

Purchases can reveal a lot about you — whether you have kids, your vices, your clothing size, your hobbies and even health problems.

That’s why big data is big business. A 2013 Direct Marketing Association study found that in 2012, $156 billion was spent on marketing services that used the collection of individual online shopping habits. And the association says data marketing fueled 676,000 jobs.

But what really gets me? Data brokers can collect details on what we buy with debit or credit cards, and they don’t have to tell us.

A May 2013 report from the Federal Trade Commission revealed that data brokers buy detailed, specific information about consumer purchases from retailers and catalog companies.

Data brokers, for the most part, are very secretive about how they operate and what data they collect. Unlike consumer reporting agencies, such as the big three credit bureaus, data brokers are not required by law to show consumers their files or correct inaccurate information, according to the nonprofit Privacy Rights Clearinghouse.

But one big broker, Acxiom, created AbouttheData.com to let consumers take a look at some of the information that’s been collected about them.

Consumers shouldn’t expect too much from this small move toward transparency, though. According to the Electronic Frontier Foundation, a nonprofit that promotes privacy in the digital age, consumers who check AbouttheData.com are not getting a complete picture.

Acxiom collects about 1,500 pieces of data per consumer, and has information on more than 700 million consumers, according to the foundation. However, on AbouttheData.com, Acxiom shows you only some of the data they have on you, according to the foundation.

I decided to check my Acxiom report to see what it reveals and whether the information is correct. To register, I had to provide my birth date, address and the last four digits of my Social Security number.

I then got to see my report, or at least the part Acxiom was willing to share with me, which was divided into six categories:

  • Characteristic data
  • Home Data
  • Household vehicle data
  • Household economic data
  • Household purchase data
  • Household interests data

Only two categories contained data. Under characteristics, Acxiom correctly listed my birth date, household size (two), education level (college), the fact that I vote and my political party (Democrat).

But the household economic data section listed my estimated household income range as under $10,000. I have no idea where they got this information, as my husband has a good job as a college professor, and I’ve been successfully self-employed for 10 years. We’re a solidly middle-class couple.

I’m not the only consumer about whom Acxiom’s got it wrong. Forbes.com wrote about a married Harvard professor with a doctorate who was listed as a single guy with only a high school education. Forbes also mentioned a woman who steers clear of firearms and was described as an avid hunter, while a childless woman who buys a lot of gifts for nieces and nephews was listed as a mom.

I have no idea how my incorrect information might be affecting me, or whether I should bother to change it. I really don’t want to give this shadowy company any correct information about myself. In fact, Forbes quoted a data security and privacy professor as saying AbouttheData.com might be “bait” to get consumers to correct bad information about themselves.

I contacted Acxiom to get their take on AbouttheData.com, but through a public relations representative, they refused to talk.

So, when I click on Household Purchase Data and see that Acxiom has no “no data available” about me for that category, does that mean they really have no data about the many purchases I’ve made on my debit and credit cards? Or does it mean they’re just not letting me see the information they have?

The Federal Trade Commission recommends that Congress enact laws to force data brokers to be more transparent and accountable. I hope the day will come soon.

In the meantime, checking your Acxiom report is a simple way to get a glimpse of some of the information data brokers have gathered about you — even if it’s totally wrong.

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How I clear $800 a year with my rewards card without trying

Filed under: Rewards on November 14, 2014 @ 11:07 am

Since 1984, when I was a college student, I have had a credit card. I still have my first card, which originally had a limit of $300 and was issued by my hometown bank.

Well, that bank was bought, and then it was bought again. My little hometown card today is a BankAmericard Cash Rewards card, and the limit has increased into five digits.

That card has been my good friend. As my family has grown, this card has been there with me. I bought our first car seat with it. I used it to pay for art supplies so my then-toddlers could paint on the kitchen floor (newspaper was taped to the floor). As the kids grew, we used the card to buy them computers that they could use for their school work. Meanwhile, I have built exemplary credit by having a card for three decades.

My loyalty to my card has paid off. Now, without even making an effort, I am clearing about $800 a year just for using the card.

That’s right. I make $800 a year, and nothing is cutting into that sum. That’s the power of rewards cards.

Here’s how I’m doing it:

  1. I don’t pay an annual fee. Annual fees cut into how much you profit from rewards plans, and you need to account for them when deciding on the best card for you. Because I have no annual fee, my cash back is pure profit.
  2. I don’t carry over a balance. This means I’m not paying interest, which would further dig into my rewards. That’s something CreditCardForum.com chief Ben Woolsey advises that you do if you are going to use a rewards card.



“If you carry balances on a regular basis, it’s best to avoid a reward card altogether,” says Ben. So, because I pay my card bill in full and on time each month, I’m further benefiting from this card’s rewards.

But how do I use my card? Actually, I don’t use the favorite tricks of rewards card experts. I don’t put my utilities on it, for example. And I don’t shop at specific stores to max out my points. However, if we have a big purchase, for example, holiday shopping or a new computer, the Bank of America card is my card of choice.

As a result, I accumulate about $200 in cash back every three months. I credit my card account with the cash, and put it toward the next month’s bill.

There are other things I can do to maximize my rewards.

For example, by shopping online on my card’s WorldPoints Mall, I found one retailer that gives you 17 points back for every dollar you spend. Four points for every dollar spent is typical on this site, and the 400 retailers include major merchants such as Macy’s, the Apple Store, Staples and The Home Depot.

The card is very versatile, with the option to get gift cards or travel rewards instead of cash.

But I don’t plan to change my shopping habits — nor should you. You shouldn’t have to adjust your life to benefit from a rewards card. Instead, shop for the one that fits your needs.

When you are shopping for a rewards card, go through this checklist:

  • Does the card have an annual fee? And if so, will you spend enough to recoup the annual fee? (See the chart below to use for cashback plans.)

Annual Fee Chart

  • Will you be able to pay the card in full and on time each month? Otherwise, you are just wasting your money.
  • Does the card fit your current lifestyle? For example, will you primarily use the card for groceries and gas? Then, you want a card that pays $2 or more for every dollar you spend on those items.
  • Part 2 of fitting your lifestyle: Make sure your favorite stores fall under the merchant category codes that the card rewards. For example, see Visa’s code list.
  • Travel a lot? Look at travel cards that reward you for using your favorite hotels and airlines. (My husband and I made the mistake of upgrading his American Express Delta card. We pay $195 a year, get lots of travel benefits and have 59,000 Delta points, but we don’t use them because we no longer travel on Delta. So we are wasting money on a rewards card that we aren’t taking full advantage of. Why? Because it doesn’t fit our lifestyle.)

I’ve found that by having a card that fits my lifestyle, that doesn’t have an annual fee, and by paying in full and on time, I not only maintain a high credit score, I actually make money by using the Bank of America card. Not bad for a little hometown card that started with a $300 limit.

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I saved hundreds of dollars by challenging overdraft fees

Filed under: Banking on November 12, 2014 @ 11:41 am

Are you sure you’ve not opted in to overdraft protection? I knew I wasn’t, but my bank recently tried to charge me hefty fees. I saved almost $300 by knowing the rules.

It’s been over four years since Federal Reserve rules went into effect in 2010 to help protect consumers from nasty overdraft surprises.

The rules state that banks cannot charge consumers overdraft fees for debit card purchases or ATM transactions unless the consumer receives information on the bank’s overdraft protection service and opts in to overdraft protection.

When I opened my current bank account, I knew about the rules and chose not to opt in. I tend to make a lot of debit card purchases, and I definitely didn’t want to get hit with multiple $35 overdraft fees if I made a mistake and let my balance get too low. I’d much rather have my card declined and suffer a tiny bit of embarrassment.

This fall, I messed up. I had a busy few weeks and forgot to transfer money from another account to cover a household repair I’d paid for from our main account. Our balance got low, and my husband and I each made several small debit card purchases in one day.

When I logged into online banking a few days later, I was shocked to see $280 in overdraft fees. I immediately called customer service and eventually got all of the fees reversed.

So, how can you avoid being in the situation I was in? The federal Consumer Financial Protection Bureau recommends that you know your opt-in status.

If you haven’t opted in, I’d recommend getting proof in writing and keeping it on file. After my incident, the bank customer service rep I spoke with sent me a letter stating that I have not opted into overdraft protection. I stuck it in a file folder with my other banking information.

If you do end up in a situation like mine, here’s how to handle it:

1. Call the bank right away. Explain that you chose not to opt in to overdraft protection and were charged overdraft fees by mistake. Ask to be credited back the full amount you were charged. Be friendly and calm, Learnvest.com recommends in its guide to talking your way out of bank fees.

2. Don’t accept less than you’re owed. It’s often possible to get one or two overdraft fees waived by asking and being persistent, according to the personal finance blog I Will Teach You To Be Rich. This is sometimes referred to as a one-time “courtesy refund.” In my case, the bank rep first offered to refund me $140, or half of the total amount I was charged. However, if you have not opted in to overdraft protection, you should not have to pay any overdraft fees for debit card transactions. (The opt-in rules don’t apply to checks or direct debits such as recurring bill pay, though.) So, be politely persistent.

3. Show that you know the law. Let the bank know that you know your rights. Here’s what I said: “I know federal rules prohibit banks from charging overdraft fees for debit card transactions unless the consumer has opted in to overdraft protection. I’m 100 percent sure I did not opt in. So, could you please reverse all of the overdraft fees I was charged?”

4. Ask for written proof you opted in. If the bank rep still doesn’t agree, you can say: “Are you saying that I am opted in to overdraft protection? If so, can you please provide me with written proof with my signature on it showing I opted in?” That’s the magic line that got the bank representative to check for a record of my opting in. When she got back on the line, she confirmed that she could not find anything showing I had opted in, and she agreed to immediately reverse all $280 worth of charges. I Will Teach You To Be Rich recommends you keep records of all of your customer service calls to make sure the bank keeps its end of the bargain. In my case, the rep followed through with her promise.

So, if you know the bank was wrong to charge you an overdraft fee, keep at it. You should win — eventually.

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