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Need strong passwords? These tools help

Filed under: Credit Cards General on April 23, 2014 @ 9:30 am

Do you cringe every time you sign onto your online banking or check your credit card balance because your password is something ridiculously easy to guess, such as rover1?

You know using your beloved childhood dog’s name makes your password vulnerable to hackers, but you haven’t gotten around to changing it because you like being able to remember your password and log in easily.

That’s how I was, until last week, when I finally got tired of worrying and decided to create strong passwords for every site I use.

Keeping your information safe online is more important than ever. A poll from the Pew Research Center shows that 18 percent of adults have had important information (for example, their Social Security number or bank account information) stolen and 21 percent have had their email or a social networking site hacked.

In fact, I got a huge shock last year when a writer friend emailed to tell me my professional website had been hacked. For a short time, it was taken over by a Pakistani militant group. My web hosting service investigated and found that the hackers got access to my site through a compromised password.

I knew I needed to fix my weak password situation, but I was torn between security and trying to make a gazillion passwords easy to remember.

Throw in the recent Heartbleed debacle — a problem with software that’s supposed to make websites such as bank and credit card sites more secure — and the first two letters in www should stand for “Wild West.”

Here are two steps you can take to increase your passwords’ security, without forgetting them and getting locked out of sites:

  1. Create a different super strong password for each site. On her blog at, digital expert Kim Komando recommends using the first letter of each word from a sentence, substituting numbers and characters for some words. She gives the example of a song lyric: “Tramps like us, baby, we were born to run” becomes “tlI_I,BwwB2R.” She recommends using consistent rules for capitalizing certain letters and replacing some words with symbols or numbers. recommends that you outsmart increasingly clever hackers by creating passwords that are unique and unpredictable.
  2. Use a password manager. Kim Komando recommends KeePass, a free password manager. Or you could use Abine’s MaskMe, as I did. MaskMe stores the passwords, so you can sign in and retrieve them whenever you need to. (No more clicking on “forgot my password” for the 10th time.) Apple’s iCloud Keychain stores passwords across all sites when you use Safari as your web browser. Top 10 Reviews offers a review of various paid password managers that range from about $10 to $30. Bonus: These services will generate random passwords for you, so you don’t have to spend time thinking up crazy sentences or remembering song lyrics every time you want to create an account.

So, go do it now, and don’t procrastinate the way I did. You’ll feel much better — especially when the news of the next big security breach comes out tomorrow.

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Just how safe are banking checks?

Filed under: Credit Cards General on April 16, 2014 @ 2:49 pm

Since I started using online banking several years ago, I have barely used my checkbook Lately, I’ve been wondering: Is it even safe to write checks?

The question came up a few weeks ago when I called a lawn service I’d never used before. Our lawn mower broke down just as my husband was about to cut our overgrown lawn, and a friend was arriving from out of state that day. My friend had never seen our house, and I wanted it to look nice.

The lawn service I chose took cash or check. I had work deadlines to meet before my friend arrived, and there was no time to run to the ATM for cash. So, I reluctantly pulled out my dusty checkbook.

As I handed over the check, with my full name, address and bank account number on it, I wondered how big a risk I was taking.

Personal finance blog FiveCentNickel raises the same questions. After all, FiveCentNickel points out, the information that sometimes gets compromised when retailers have data breaches is often similar to what’s printed right on your checks.

FiveCentNickel recommends avoiding checks for certain types of transactions, such as eBay purchases, paying a random guy to mow your lawn (in my case, it was a company with the business name emblazoned on the side of the truck, but still) and even pizza delivery.

I’ll add one more: Craigslist purchases. Cash works out better for both parties, and most sellers don’t even take checks. (But, I recently sold an antique table for $30, and the woman who bought it was so sweet that when she pulled out a check and started painstakingly writing it out, I didn’t want to tell her no. I did wonder at her trust at handing over her personal information to a total stranger.)

Blogger Lainie Petersen at argues you can find yourself in situations when a paper check is the best choice: some companies don’t take debit or credit cards, while others charge you a fee to swipe plastic. For example, we’re getting the exterior of our house painted soon, and the painter charges a 3 percent fee for a credit card transaction. (It’s a fee he has to pay, so he passes it along.) The job is too expensive for us to safely use cash, so we’ll probably write a check.

So, how do you use a check and keep yourself safe from fraud? Personal finance experts offer several recommendations, including:

  • Use checks only when you have a good reason, recommends.
  • Don’t write additional identifying information — such as your driver’s license number — on the front of your check, says. According to the U.S. Social Security Administration, 29 states either use a driver’s Social Security number as the driver’s license number, or show it on the face of the license — a scary thought from an ID theft perspective.
  • Write checks only to established, legitimate businesses, recommends. (While this is no guarantee of security, since many employees might get a chance to glance at your check, it’s better than writing them to just anyone.)
  • Stick with cash for small purchases, recommends John Marklin, owner of Marklin Financial Services.
  • Carefully monitor your checking account online.

If you don’t feel comfortable writing a check, and plastic isn’t a choice, what are your options? As FiveCentNickel points out, you can always use a money order. Or, you can use a cashier’s check. explains the differences between the two.

If we choose not to write a check to our house painter, a money order could be an option. I’ve never used a money order, but this might be a good time to try.

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How getting out from under debt changed my life

Filed under: Credit Cards General on April 11, 2014 @ 2:58 pm

Two adults, two teenage boys and an 80-pound collie in a 1,300-square-foot home. That’s where my family lived two years ago.

We were falling all over each other. The boys had their own bedrooms, but the rooms were tiny. Our single great room doubled as a game room and living room.  Complicating things was my insistence that we keep only one TV in the house. This encouraged the kids to spend more time with us, but it made for little privacy.

But lack of privacy wasn’t why we sold our little house. We were in a hot residential area of Austin, Texas, and a real estate agent had approached us about selling. What tempted me? Getting out from under our debt.

We had $14,000 in credit card debt, a loan on my van and the mortgage. Not a lot of debt by American standards, but I hated it. Add to that, we didn’t have much in savings. If we sold, we’d have enough equity on our house to be debt-free, we’d have some cash set aside and we could save more to perhaps buy a bigger house down the road.

It was a culture shock for my husband, Mo — we hadn’t been renters in more than 20 years. But I had read about people going debt free, such as Jaime at Eventual Millionaire, and I really wanted to try it. In the end, we agreed to get out from under $160,000 in combined credit card, mortgage and car loan debt, and live a more straightforward life. I wanted to continue using credit cards to keep our credit scores up, but pay them off each month.

We found a rental that was well-cared-for, 400 square feet bigger and, as a bonus, we would be able to save money for our next house. My biggest worry was that I would let myself fall into credit card debt again. This is what I did to prevent it:

  • I set a goal of saving $60,000 for a down payment on a bigger house. I revamped our budget, something Joan Otto of Man Vs. Debt advises, cutting out expenses such as the gym and lawn services. Add to that, we didn’t have maintenance expenses, the car loan and card payments. I was able to cut our costs by $1,200 a month.
  • I already had our budget on a spreadsheet, but I never seemed to meet it each month. I realized that I was being unrealistic about expenses. For example, I was taking the kids for breakfast tacos every Saturday, but I wasn’t including it in the expenses. I also wasn’t budgeting for occasional items such as medicine. I decided to break out my card expenditures on a separate spreadsheet. I would now be able to compare them to my card statements.
  • This new spreadsheet forced me to think about every expense, but I needed to cut us some slack. What if we wanted to see a movie at the theater? Or what if Mo, who loves to cook, wanted to buy an exotic ingredient that didn’t fit in my well-planned budget? I decided to allow for $400 on the credit cards that could go to these kinds of expenses, as well as things such as haircuts and car washes.
  • Credit cards were my downfall before, so I wanted to make sure I didn’t fall into the same traps again. Every Saturday after breakfast tacos, I checked each credit card online and made sure it aligned with my spreadsheets. This encouraged me to be more mindful of how the cards were being used and ensured that we were on budget throughout the month.
  • Finally, I created a running tab of how much we would save each month from my salary after bills and expenses. I found this to be a tremendous motivator when the kids begged to eat out. I figured out that if Mo and I said no to a restaurant twice a month, that would save us $150 a month or $1,800 in a year. Or if we bought ice cream from the grocery story instead of eating at Amy’s, our local ice cream shop, we could save $20 a week ($1,040 a year). Monica On Money has some other great tips on how to cut costs, such as canceling cable and driving safely to avoid traffic fines.

Two weeks ago, Mo and I closed on our dream house. We were able to go bigger in size, in large part because we had saved enough for a generous down payment. We have debt again, which makes me nervous, but I’ve shown in the last two years that we can live card-debt free and that my spreadsheets work. We hope to have the mortgage paid off in seven years (it’s a 15-year mortgage) by putting bonuses and other extras toward the principal.

I’ve learned in this journey that debt serves a purpose — if you control it, and not let it control you.

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Credit score hits can ding your self-esteem

Filed under: Credit Cards General on April 9, 2014 @ 1:30 pm

When I first looked at my new, lower credit score back in February, I was sure it couldn’t be right.

Then I realized it was: A few factors had combined to take my formerly excellent score of about 780 down to around 700. When I got over my initial surprise, I got a second one: how bad it made me feel.

Over the past few years, I hadn’t given much thought to how shaky credit can affect a person’s self-image. Since my credit had been pretty solid for a while, the topic hadn’t exactly been top of mind for me.

But, apparently, it doesn’t take much to go from being a credit superstar to, well, a second-class citizen in the land of credit.

In my case, a few things had happened. I applied for new credit a few times during a recent kitchen remodel. That was the first hit to my credit. My husband and I wanted to get pretty granite countertops and a few pricy appliances, and we wanted to pay for them over time. So I got a zero-percent credit card deal. But that meant I was carrying a balance — a pretty hefty one. My debt-to-credit-limit ratio went from excellent (we used to pay off our cards every month) to not so good. That was the second hit to my score.

And, finally, my husband made a very late payment on his personal card (he tends to space out about these things), and that was reported on my credit because I was an authorized user. I took myself off the card and am still in the process of disputing that item – but, in the meantime, it’s listed as one of the items negatively affecting my credit.

I know that as soon as I get that ding taken off my credit and we pay down our remodel debt, my score will jump back up. But the fact that it’s so easy to go from great to flawed in the eyes of lenders makes one thing hit home for me: My credit score doesn’t define me. Having a great score doesn’t mean I’m perfect, and having an iffy one doesn’t mean I’m a loser.

As Ryan Greeley of the Better Credit Blog points out, it’s easy to let your credit score affect your sense of self worth. He writes that having a bad score in the past made him feel marked as someone who could not be trusted. I felt the same.

But, as he points out, your credit score is just a number. There could be many reasons why it is what it is. Maybe you got hit with medical debt or lost your job. In my case, it wasn’t as though I suddenly went crazy buying things I couldn’t afford or that I decided to stop paying my bills.

So, instead of stewing about a bad score, the best thing to do is to take steps to make it better — as Greeley did. His first step? He got a secured card, basically building from the bottom and eventually meeting his goal score of 775.

But a less-than-perfect score doesn’t always mean you’re starting from scratch. As this post on points out — and as I learned — scores can fluctuate by quite a bit.

If your score dips, as mine did, find out why. gives a list of common reasons — the top one, “Did you max out any credit cards?” applies to me. Your credit report will help you here by showing you a list of negative factors affecting your score. Once you have that information, you can stop taking your score personally — and instead work on fixing it.

As for me, I’ve taken every action I can to make my score better, and I’m continuing to chip away at our remodel debt. So, I look forward to being back in the high 700s again soon — and regaining the good feeling that goes with excellent credit.

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How teens can build credit

Filed under: Credit Cards General on April 4, 2014 @ 10:42 am

With a son who is about to turn 17, I’m on the lookout for advice about how he can build credit.

I learned pretty early on that he first needs to know how to maintain a budget. No matter what I do for him to help him build strong credit reports and scores, he has to be able to manage his money.

That’s why I opened a debit card for him a few weeks back, giving him an allowance of $150 a month and the responsibility of paying for clothes, school supplies and other necessities. So far, he has been doing well, setting aside money for needed items and not going over budget.

But as you know, that’s not enough. Credit reports don’t directly reflect that he is managing his checking account well. George needs to prove to lenders that he is a good credit risk, something that isn’t easy for a young person to do, Bankrate financial columnist Dr. Don Taylor points out.

Dr. Don notes that with the CARD Act’s passage in 2009, it has become more challenging for young people to establish credit. Card applicants under 21 have to have a source of income or a co-signer. But there are ways around this restriction.

For example, I can sign George on as an authorized user of one of my cards, as Hemlata at Pacific Service Credit Union writes. If I pay the bills on time, his credit score will benefit. At the same time, I am legally responsible if he overspends. Is it worth the risk?

My colleague Julie Sherrier was able to help her son build his credit score without worrying about what he might do to her credit — she made him an authorized user, then she kept his card. Today, his score is in the mid-700s, which falls in the “good” category. (And there is an advantage to the authorized user route over co-signing — it is easier to take an authorized user off your card.)

Matthew Coan says young adults need to understand that credit cards are an important credit tool, if used wisely: They should charge small amounts and pay them back on time.

In fact, Hemlata of Pacific Service Credit Union says teens and young adults should simply avoid big-ticket items. Hemlata suggests that young adults only buy what they will be able to pay off in one to three months. “Larger balances that take up most of your credit limit and continue to roll over monthly can adversely affect your score and can increase the interest you pay on the purchase,” Hemlata writes.

Michael Mack, founder of, suggests a secured installment loan at a credit union or local bank. However, make sure the financial institution will report the loan to all three credit unions as an installment loan. Apply for the smallest installment loan possible, he says — which can be even less than $500. Set up an automatic debit, Mack advises.

For now, I will see how George manages his debit card and checking account. I like that he is taking responsibility for expenses before he turns 18, but I’m hesitant to put him on a credit card until he’s had some time to adjust to the responsibilities of bills.

I’ll keep you posted. Have any of you had experience bringing a teen into financial adulthood? Any tips for me?

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Relearn childhood money lessons in 4 steps

Filed under: Credit Cards General on April 2, 2014 @ 9:57 am

Could your childhood money experiences be part of why you overspend, fail to save or practice other bad money habits?

Yes, and I’m a perfect example.

I never thought much about how my childhood shaped my ideas about money.

My mom tells a story about how once, when my dad was unemployed, she raided my piggy bank to buy a frozen potpie for dinner. That frugality continued even after my dad got a steady job and our money situation improved: We rarely went out to eat or on vacations.

In college, I racked up about $500 in credit card debt — while making about $17 a week as an editor for the campus newspaper. After months of stress, I managed to pay off the debt with funds from a summer waitress job.

But I didn’t learn my lesson, and I breezed through my early 20s spending my paychecks on books, clothes and nights out with friends. I paid my bills late — if I hadn’t lost them or accidentally thrown them away. I ran up more credit card debt.

My bad money habits caused me a lot of stress, but I couldn’t make changes stick. Finally, I went to a few sessions of therapy. With the psychologist, I talked about my childhood experiences with money and how I’d developed an image of creditors as authority figures who wanted to take all my money and prevent me from having fun. By not paying them, I was being rebellious. I learned that I was only hurting myself.

Almost immediately, I started paying my bills on time and started down the road to getting my financial life together.

If your past might be negatively affecting how you handle money, try these four steps:

  1. Identify your patterns. Assess your money-handling process: Is it working well for you? My problematic behaviors were failing to follow a spending plan and paying bills late. What are yours?
  1. Look at your past. How did your problem areas develop? Look to your past, and think about how your family handled money. The money lessons you learned in childhood probably are partly true, and partly false, financial psychologist Jeremy Shapiro writes in his Dr. GoodCents column. For example, a boy whose mother glows when his father gives her jewelry might grow up thinking that pricy presents are the key to making others happy, he writes. Or, a teen whose parents lost money on real estate in 2008 might decide investing money is a mistake.
  1. Rethink money lessons you learned in childhood. Now, it’s time to sort fact from fiction, according to Shapiro. As an adult, he writes, you have a lot more knowledge and life experience than you did when you formed certain beliefs as a kid. So, hold your old beliefs up and re-evaluate them. “You can decide what to keep, what to revise and what to toss,” he writes.
  1. Move toward healthy money habits. You might find that you hold some extreme beliefs that are contributing to destructive financial behaviors, such as rejection of money or compulsive spending, financial psychologist Brad Klontz writes in a blog post on In this case, you need to “challenge distorted money beliefs” and begin to practice healthy financial habits such as using a spending plan, saving and limiting debt, Klontz writes.

In my case, awareness and admitting that it wasn’t working for me provided the push I needed to change. Once I cleared that initial hurdle, it was simply a matter of learning better money habits — and practicing them so they’d stick.

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Competing over credit scores? Not so fast

Filed under: Credit Cards General on March 28, 2014 @ 11:34 am

My husband and I have a bit of a competition when it comes to our credit scores.

Both of us have FICO scores in the 800s, and we find ourselves comparing notes when we pull them.

But I had read that competing with your spouse to get a better score is not a good plan of action. I wanted to know why.

I turned to credit bureau Experian’s Director of Public Education Rod Griffin, who actually has first-hand experience with this.

He bought some property with his wife recently, and her scores were better than his — even her Experian score.

How did that make him feel?

“Perturbed,” he says, “because of who I work for.”

But is it healthy to compete? “I guess it depends on who’s winning,” Griffin jokes, noting that women tend to have better scores, albeit by a small margin.

With a sample of 750,000 consumers, Experian found that women’s average VantageScore figures were 675 to men’s 674, on a scale of 300-850. (VantageScore is a credit scoring model developed by credit bureaus Experian, Equifax and TransUnion to compete with the more commonly used FICO scoring system.)

It’s hard to gauge why, but men’s debt loads were higher, says Griffin. The average debt (credit cards, auto loans and personal loans) carried by men, according to the May 2013 study, was $26,227 to women’s $25,095. Also, men’s revolving utilization ratio — how much debt they carry compared to how much available credit they have — was higher, with 31 percent for men and 30 percent for women. (A credit utilization ratio of less than 30 percent is optimal.)

“The average scores for both weren’t great,” Griffin says. “But, men tend to use credit more, utilization is higher and they carry more debt.”

But credit scores aren’t like baseball scores, says Griffin. “There isn’t a winner or a loser.”

Scores go up and down like the stock market, rather than a score in a game. “The winner could be different in 10 minutes,” he says. “You may have paid off a debt, or a late payment fell off your report.”

If you are going to compete, Griffin says, make sure you are comparing the same scores. For example, VantageScore switched last year from its 2.0 generation, with a range of 501-990, to 3.0, with the current 300-850. You don’t want to compare scores from different generations.

And, although FICO also uses a 300-850 scale, the two models have key differences.

VantageScore primarily weighs  payment history (40 percent), age and types of credit used (21 percent) and credit utilization ratios (20 percent), while the more frequently used FICO primarily looks at payment history (35 percent), amounts owed (30 percent), length of credit history (15 percent), new credit (10 percent) and credit mix (10 percent).

Rather than focusing on your score, it’s more productive to look at why the numbers are what they are, Griffin says.  When you get your score, you will also get what Griffin calls a “score report,” which will give you information about any problem areas that may have impacted the number.

“Look at it as a financial tool to make good credit management decisions,” he says. “You need to use your score to improve your creditworthiness. It may be fun to compare with your friends, but really, it’s a tool to make you more successful as a consumer.”

The scores should be a tool to help you work with your honey, rather than against, Griffin adds.  Work with your partner to get the credit you want, he says. In fact, Griffin doesn’t even look at his scores unless he is going to make a purchase. “If you worry about your credit report, the scores will take care of themselves.”

What should you care about? Two things, Griffin says: Pay all of your bills on time every single time, and keep your debt as low as possible. These practices should keep your credit reports golden.

“The object with the credit score isn’t to get a perfect score. It’s not like a paper in school. It’s next to impossible to get a perfect score,” Griffin says.

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5 tips for making a one-car family work

Filed under: Credit Cards General on March 26, 2014 @ 2:11 pm

My husband and I aren’t always the best at being frugal, but there’s one really big thing we do to save money: share a car.

I estimate that we save at least $5,000 a year by not having to pay for gas, maintenance, repairs, insurance and tag renewal for an extra vehicle. In fact, it could be more: According to a 2013 study by AAA, it costs about $9,122 a year to own and operate a mid-sized sedan when you factor in $3,571 for depreciation.

It started as an experiment. It was the height of the Great Recession, and my old Volvo — the one that cost us at least $400 every time it landed in the shop — broke down again. We decided to postpone fixing the car, just for a month.

At the time, my husband was in grad school and drove our 1996 Corolla (which is in fantastic shape for its age — no one can believe it’s that old) on his hourlong commute to the university three times a week. I work from a home office, so we figured sharing was doable.

Weeks went by, then months. It was actually surprisingly easy. Every couple of weeks or so, we’d hit a snag where I wanted to run to the store, but he had the car or vice versa. But it was never a big deal.

Eventually, we decided to sell my car. Now, we live in a small city in Georgia, and my husband is a college professor. We live downtown, and his university has a free shuttle service between the downtown campus and the main campus, where he teaches. When the weather’s nice, he walks downtown and catches the university bus or rides his bike to work. So, sharing a car is easier than ever.

But, we have had to adjust. Here’s what makes it work for us:

  • Communication. When you share a car, you have to do a lot more talking about everyday plans. I always ask Joe to let me know in advance whenever he needs the car, and I try to do the same for him. But we forget sometimes.
  • Flexibility. There will be times when conflicts pop up, so you have to be ready to adjust. For example, sometimes I make a vet appointment for one of our dogs and then have to call back and change it. Or, sometimes whoever has the car has to run an extra errand or two. As the blog Working Moms Against Guilt points out, car sharing can make errands a hassle.
  • Planning errands. Having a system for errands helps. I do all of my grocery shopping for the week early on Sunday morning. If I need something and Joe has the car that day, I ask him to pick it up on his way home. (It’s convenient that he drives past the grocery, drug, hardware and pet stores on his way home.)  In a guest post  on Money Saving Mom, blogger Liz of Frugally Blonde writes that she makes being a one-car family work by planning out routes around town, combining errands and doing two weeks of grocery shopping in one trip.
  • Not caring what others think. Sharing a car still seems odd to some people, especially if you don’t live in a progressive city where it might be considered cool. You might have to ignore raised eyebrows and questioning looks. Liz of Frugally Blonde writes: “When I tell new acquaintances that my husband and I share one car, I am usually met with a mix of shock and pity. In our affluent society, it is practically unheard of for each adult driver in a household not to have his or her own car.”
  • Being realistic about where you live. I can walk downtown to our bank, post office, coffee shops and restaurants. So, on days when Joe takes the car, I’m not stuck at home. As Working Moms Against Guilt points out, it can be tougher to share a car in the suburbs.

So, is being a one-car family really worth it, moneywise? In The Simple Dollar’s column Saving Pennies or Dollars, personal finance blogger Trent Hamm crunches the numbers. His conclusion? Over 10 years, commuting in a second car will cost $32,400 compared with $9,600 to take the bus.

Should you sell a car then and share the remaining one with your spouse? As Mark at You Need A Budget points out, it’s a good idea to first consider the what ifs (as in “What if I want to go to lunch with a friend or take a solo trip?”)

Then, You Need a Budget recommends you weigh the downsides — loss of always having wheels at the ready to take you where you want to go — against the upsides of saving money and a simpler life.

For us, it’s been easy: We’re content with just one car, and it frees up lots of money for us to save or spend on things (such as weekend getaways) that we value much more than the ability to run out and buy bread or paper towels at the spur of the moment.

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Is my mobile banking app safe?

Filed under: Credit Cards General on March 21, 2014 @ 2:25 pm

My kids think I’m technologically illiterate — even though I edit for a website.

I text too slowly. I huff at my computer too much. I’m just hopeless, they say.

So when I spent too long on my Android for their liking, they sighed and asked what I was trying to do. Loading my credit union’s banking app, I said. Well, that launched a diatribe.

“Banking apps aren’t safe.”

“Your personal information could be hacked.”

“Identity thieves could take money out of your accounts.”

Oh, and, “Androids are evil.”

I was a little surprised by my boys’ reaction, because you think of millennials as the embracers of all things mobile. But actually, that isn’t necessarily true: Angus Reid Public Opinion recently found out for TD Bank that while 88 percent of adults under the age of 35 bank online, only 47 percent use mobile banking. That’s below in-branch banking (53 percent) and ATMs (72 percent).

OK, so my little millennials are reticent. Was it for good cause?

Of course, I couldn’t refute any of this, including the personal attack on my phone, because I had never done research on it. So, I turned to Domingo Guerra, president and cofounder of Appthority. His company has tested 2.5 million apps for their safety or about 15,000 apps a day.

We got straight to the point: Are banking apps unsafe?

“It’s a mixed bag,” says Guerra. “Some of the smaller banks and credit unions aren’t as secure. Sometimes, they just launch a mobile browser.” Larger banks have the resources and manpower to develop their own apps, and they can build tighter security into the technology, he says. “It’s not that they don’t know how to do it,” says Guerra of the smaller financial institutions, “but big banks can do it in-house.”

That said, don’t give up on your smaller bank, because it may actually have a terrific security system. How do you know? Here’s what to look for:

What do the user ratings say? If there are complaints that it is difficult to log in to, that’s actually a good sign, says Guerra. That means strong security is likely.

What security systems are in place? If it only requires a four-digit number, that is the lowest level of security. An alpha/numeric password is better. Dual authentication is ideal, Guerra says. That’s when there are two ways to log in. For example, a password is required, then there is a security token, or a number that changes every 30 seconds.

What about the password? Both your bank password and your email password need to be strong, because you will receive any temporary passwords in your email. And, the bank and email passwords need to be different, Guerra says.

Which network should you use? Only use your cellphone’s 3G or 4G network, or your home or work networks. Don’t bank through wireless network systems provided by merchants, which you share with whomever else happens to be nearby — including fraudsters. “Hotel rooms and coffee shops are notoriously insecure,” Guerra says.

Guerra said Appthority has found that makers of free apps are more likely to harvest data and sell it, making them less secure. However, because they are service apps, the banking apps are usually safer; they are not trying to make money by reselling your data, Guerra says. (Check out this recent, comprehensive study, in which Appthority found that in general, free apps are more likely to do such things as track your location and access your address book.)

And the real question: Are Androids evil? “There is higher incidence of malware for Androids,” says Guerra. “But the apps are built by the same team at a bank, so there’s not a lot of difference” between apps for the Android operating system from Google and the iOS system from Apple.  Just don’t jailbreak your phone, he warns, because then it’s not protected by Google or Apple. (Jailbreaking is hacking into your phone so you can access apps not available through the official app stores.)

“As users, we forget that cellphones are computers as well, and everything that we learned applies to them,” Guerra says. “We need to remember what we have been taught about security.”

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Want to be an authorized card user? Think twice…

Filed under: Credit Cards General on March 19, 2014 @ 7:17 am

A word of caution: Before you let someone add you as an authorized user on his credit card, make sure he’s meticulous about paying his bill.

I got a bit of a shock recently when I checked my credit score and saw that my FICO score, which was excellent a few months ago, had dipped. I took a closer look and found a negative mark on my Equifax credit report — a recent 30-day late payment.

I’m meticulous about paying the credit cards on time, so I wondered if it was a mistake. It wasn’t: The account was my husband’s credit card, the one where he added me as an authorized user.

All of our other credit cards are for big purchases and travel, and I manage all of those accounts, checking them regularly and paying the bills on time. The card in question was the one I don’t handle: My husband got it for his own “want money” purchases after I complained about trying to keep track of all of the little purchases he used to make on our joint debit card. Out of habit, he added me as an authorized user on his card.

One of Joe’s sometimes endearing (and sometimes not) qualities is that he tends to be a bit spacey, misplacing his keys and his phone and, apparently, forgetting to pay his credit card. For a month. (He publicly admits this. He recently tweeted: “I’d forget my brain if it didn’t remember itself.”)

But, here’s the good thing about being an authorized user: The primary cardholder is the one responsible for paying the bill. It’s different from having a joint account, when both cardholders are responsible, according to Experian. Joint accounts are becoming less common. For example, CNN Money reported that Chase did away with that option last year.

Since I was just an authorized user, I knew I could get the negative information off of my credit report. I called Capital One right away and asked to be removed from Joe’s card. Then, I filed a dispute with Equifax to get the information taken off of my credit report. Equifax is still investigating, but I’m confident it will be removed. It’s a little nerve-wracking, though.

Getting added as an authorized user on someone else’s account isn’t necessarily a bad thing. As points out, it can be a good way to build credit, as long as the person who adds you has great credit and pays his bills on time.

And for some, it’s just a matter of convenience. With one card,  Joe is the primary account holder, and I’m an authorized user. With others, I’m the primary account holder, and he’s an authorized user. That can make life easier. For example, when our heat stopped working on the coldest day of winter, and we needed a new air handler, we wanted to put it on the household card that’s in Joe’s name, but he wasn’t home. I was able to pull out the card for that account that has my name on it and pay the repairman.

So here’s what I’ve learned. If there’s a good reason — such as credit-building or convenience — then by all means have your spouse add you as an authorized user on his or her credit card. But, know that payment information, both positive and negative, will show up on your credit report as long as you’re an authorized user.

If you’re not the one who pays the account, talk to your spouse about making sure payments are paid on time. You may even want to  monitor the account or set up payment alerts to make sure you don’t get the surprise of finding a black mark on your credit, like I did.

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