Credit Card – Things you should know – Final Part

December 7th, 2008 Vijaianand No Comments »

I been talking about one of my favorite topic for the past 4-5 weeks or so with some deviation to other topic as and when needed. We covered IDENTITY THEFT in a large extent from top to bottom starting out from, what to do when your cheque book is lost, what are the way scammers can steal your identity over the Internet, how can you protect your identity and finally moved on to Credit card arena. In Credit card, I mentioned why credit card rules and how to get your first credit card taking different people into perspective in my last post.

This post, I am going to talk about how to manage your credit card, how to handle it safely, what are the ways identity can be stolen in real world and What to do when credit card is stolen.


I got the credit card, now what?



Wait a sec, not so fast!! I am might sound too PRO to Credit cards but only if you have taken these safety steps. As I mentioned earlier, Credit card is a real tricky instrument. If you know how to handle or use it, it helps you a lot but if you don’t it has tendency to put you in debt.

1. Whether you are a student or smart adult, you better make up your mind and plan before start using your first ever credit card. You should plan on how to spend and how are you going to make payment to your charges. It is as simple as it.

2. If you are already an experienced credit card user, I don’t have to tell you anything except be cautious at this credit crisis time. Many banks these days are changing their agreement and how they operate their credit card business. They are jacking up on their ATM charges, so try not to take money out using your credit card. Just use for purchases.

3. Be wary and very careful not to go beyond your credit limits. You might end up paying hefty charges which is the norm but it might be more expensive these hard days as many banks have increased their charges.

4. Check the fine prints which comes to your mail box from credit companies all the time. Don’t throw it out or tear them off. Read them careful if you are really using the credit cards.

Precautionary Measures

Precaution is always better than cure. You can avoid all your worries if you can just take a little of precautionary measure before something bad happens.

1. Don’t carry too many credit cards in your wallet to show off. If you end up losing your wallet, your identity is at the mercy of beholder(thief).

2.Take a Wallet Blueprint – Write down all the credit card numbers and its corresponding 1-800 numbers to call when its lost. Try to write down all other things you carry in the wallet to help out in rare situation when it is lost.

3. Always keep upto date on your credit card statements by signing in online as many banks offer it as free service. You never know bad times hit, these thieves are very smart. So checking often helps you to be act fast instead of waiting for a monthly statement to arrive.

4. Don’t use every card for online purchase. Analyst suggest to keep one card designated for online purchase, that way you don’t have to deal with too many problems at the same time.

5. Check your credit report regularly using credit report services or from the free credit report website http://www.annualcreditreports.com/

6. Opt-out of any credit card offers which is a pain in the first place but it also helps to see whether you are getting a good balance transfer offer. So its upto you whether you want to go thru the pain or not.

7. Shred your mails instead of just throwing them. If you don’t have a shredder, try to atleast tear them tiny bits and pieces.

Thieves Tricky ways

Identity theft is the number one crime in American and even in entire world. It is mainly caused by credit cards. Bad days never knock your door asking for your permission to show up in your life. It just comes and you won’t know when and which avatar it shocks to wet your pants off. These are some common ways thieves steal your identity,

1. Stealing your Wallet with SSN Card and Credit card from your car
2. Cheque books from Mails or Mail box
3. Bills and documents from Trash
4. Scam emails
5. Emails from Classified website which you posted to sell or buy
6. Emails from Phisher pretending like a Bank or mortgage company
7. Calling Kids and offering freebies to gather information
8. Phone call from Banks for SSN info
9. ATM Machines
10. Film Rental Machines
11. Online shopping stores
12. Changing rooms in Mall
13. Parking lots – Underneath your car
14. Pickpocket in Malls by distracting you and so much more.

My Credit Card is Stolen, What to do now?

If it just your credit card stolen, don’t panic. Call your credit card company and report the lost or stolen credit.

If you lost your wallet which had SSN card and everything,
1. Call the local sherrif department or police station and file a compliant.
2. Call all the credit card companies to intimate that your card is stolen and ask them to deactivate it.
3. Call the credit card bureaus and put a freeze on your credit report
4. Put a fraud alert with Credit Bureau as well. Please do everything in writing and send mails via certified mail.

To make your life easier, there are lot of Identity Protection services like Lifelock.com which can help you to stop your identity theft and act on your behalf to stop the leak.

That concludes the series of blogs about IDENTITY THEFT and CREDIT CARDS. I hope it enlightened you all with some useful information and ways you can start using to protect your identity. Please don’t hesitate to add comments and send me an email if you have any questions.

Happy Holidays to all of you!!!

Credit Card – Things you should know

December 2nd, 2008 Vijaianand No Comments »

Last week was a busy week at my work as I was working extra hours to get things done. Obviously, work takes priority as pays the bills. For that reason, I had to miss my last week post.



Before that, I posted a blog about CITIBANK which was needed to shed some light on the issue. Let me switch gears to get back to my favorite which is left over topic, IDENTIFY THEFT&CREDIT CARDS. I talked about why credit is preferred by many people and talked about self searching yourself to see whether you need one or not. This post I am going to cover some things on how to get a credit card taking different individuals role from different walks of life.



Getting your first Credit Card



First of all, once you decid to get a card after finding its ease of use and to avoid the burden of carrying cash all around. To tell you frankly, it is not that easy to get one these days. It was easy a year ago but not now as companies are going back to basics looking out for credit history to offer a card. You would have to have good credit history to get a credit card with good limits. But Credit history only gets built once you start borrowing and paying back your debts from the lender whether its credit card company and bank. Its Catch 22!!



Normally, you are eligible to carry a credit card after 18 years. So College students are very attractive customers for the credit card companies.


If you are a student, you are sure to be haunted by credit card companies as they are so willing to offer your student loans. That’s one way to start out credit history and many people do that way. Many kids have good bank history even before they start their college because of their well planned parents who open accounts and educated their kids on money and saving ideas. I strongly recommend parents to educate their kids early and give a kick start to their financial life.



Let say you didn’t go to college and your parents didn’t help you out, then it gets tough. You have to start it all out from scratch. Luckily you found a job and earning reasonable income. You can open a bank account and get your earning flow through the bank. This way you would have accomplished a good bank history. Once you have the bank history, you can apply for a credit card with low credit limit as many banks offer these days and start building your credit history.



Another section of consumer are the Immigrants(like me when I came first) who are here to work and your situation is similar to the above. They don’t have any history of any type as they don’t even have SSN. They have to start it all out and it is tough so most of the time they dependent on their company offerings until they accomplish some history.



Without credit history, it makes living in America a tough ordeal. I been there and learnt lot of lessons. You cannot buy a car, you cannot get a good place to live and list goes endless. You end up depending on their big brothers/co workers who came before them for everything. Once they good bank history, try banks low credit limit cards many banks offer binding to your savings/checking account. You can start with those credit cards to get your history and slowly you will get into to good books of credit card companies.

Once you got into the good books of credit card companies with good credit history and credit score, then you will start getting offers at your door steps and they won’t stop until you die.


Things to know in advance


1. If you have a good credit history, attractive offers will sure to show up for you even in bad times like this one. Credit card companies/banks need borrowers to borrow money so they can do business and make money in interests. But be wary of their offers. Its not all the same.


Every credit card is different and they have similar rules but different mechanism to attract you to getting the card. So read the offer carefuly before signing up.

2. I strongly recommend you to check whether your credit card issuing bank offer Fraud Alerts for free or might be able to sign for little cost. This alert system come in handy to give signals when peculiar activity happens in your card that may be a hacker who got your card number or thief stole your card.

3. Check all the fine prints like fees or charges on withdrawals, Interest rates for Balance Transfer/Purchases, fees on Balance transfers. Some card offers 0% interest on purchases which is not the same as Balance transfers to your card. Both are entirely different. Also check whether they have transaction fees for Balance transfers. Many credit card companies charge 3% – $10 min fees but very rarely you get free balance transfer fee offers.

4. Check on their billing period and when do they start so you can plan on paying back the money borrowed. Also try to check on their grace period which is either 20 or 25 days depending on their bank offering the card.

5. Finally, just make sure the offers are right when you apply for your card over the phone which is better than applying over mail. That way you can confirm the offers sent to you and you can always use that conversation in future when things go wrong.

I covered some basic as well as important points on how to get a credit card and how to start your credit history according to my experience. I will cover some more facts and pointers in my next post on what are the ways your card or card number can be stolen so you can watch out and what you can do when it happens.

CITIBANK – TOO BIG TO FAIL

November 24th, 2008 Vijaianand No Comments »

Like many NRI’s, I am also a customer of CITIBANK. I just want to put out this blog to talk about CITI GROUP and its problems, concerning people who are searching for answers about its bankruptcy and sell off rumors. This day calls for a quick update on this matter.


Economy Struggle


A wild, life threatening roller coaster ride is being played out in the Stock Market all over the world. I did mean life threatening for a reason to make a point. Like a uneven ride dangerous to riders, many people jobs are at stake including 53,000 from CITI Group because of the upheaval in stock market. Blood shed in wall street has been worse these past few weeks. It affected the Main street to large extent. US economy is going thru a real tough time similar to 1929 great depression and witnessing yet another big job loss since 1991, 16 year high. It is bad as it gets and it might get worse as we are approaching the year end.


“The economy is deteriorating tremendously fast,” says Raghuram Rajan, a finance expert at the University of Chicago. “The concern is how much more [risk] is there. This stuff seems unbounded. That’s what the investor is really worried about at this point.”



CITIBANK ISSUES



Being said all about the market, CITI GROUP banking giant is been talks for long time being a major victim of toxic mortgages and bad corporate decisions. Once the biggest U.S. bank, with a market value of $274 billion at the end of 2006, Citigroup has now slipped to No. 5 behind Minneapolis-based U.S. Bancorp. Last week was one of the bad weeks for the 11 year old group which is formed after merger of CITIBANK and Travellers group in 1998.. It has lost so many billions and has around 2 trillions of dollars in bad debt. It already wrote off billions of dollars as bad debt in books for the last few quarters. Even after announcing 10% last April and 20% job cuts next year to tackle the situation, stock plummeted badly as investor concern about bad debt to 70% last friday since this year..


Including a $25 billion capital injection from the U.S. Treasury under the $700 billion Troubled Asset Relief Program, the company has at least $50 billion of capital above the amount required by regulators to qualify as “well capitalized.” according to bloomberg.com. But still, it won’t be able to survive the storm and weather out unless it gets special attention to avoid its bad assets getting on his neck pushing for sell off or bankruptcy. An endorsement by billionaire Saudi investor Prince Alwaleed bin Talal by investing around 7 billions but still that’s not enough to keep the company afloat.


CITI BANKRUPTCY, TOO BIG TO FAIL


There were worries all over world and even rumors about company spinning off certain parts of its assets. Even rumors about a possible sell off, but who can buy this bank giant. It will be like frog eating a snake, bad for both companies whoever end up buying it. If it collapses to announce a bankrupt Chapter 11, that would be big blow to US economy.


US Government which bailed out AIG which was an insurance Giant came for another rescue by announcing a special massive bail out offer on Nov 24, 2008 designed to rescue the company from bankruptcy while giving the government a major say in its operations. It was the largest bailout in history. The Treasury will provide another $20 billion in (Troubled Assistance Relief Program)TARP funds in addition to $25 billion given in October. The Treasury Department, the Federal Reserve and the FDIC will cover 90% of the losses on its $335-billion portfolio after Citigroup absorbs the first $29 billion in losses.In return the bank will give Washington $27 billion of preferred shares and warrants to acquire stock. The government will obtain wide powers over banking operations.


Is my deposits safe?


If I want to say something about CITIGROUP, I like to say CITI GROUP will never go out of business or nobody can buy this big of a financial service company. SO US Government will do all its best to keep this company alive. With that note, all US bank desposits will be covered under FDIC to the max of 250K. Interestingly, there are lot many credit cards offered by CITI compared to Bank deposits directly to consumers. There might not be a direct impact to consumers like other bank failures.



To be cautious, you will be better to split the deposits and have it different banks. Share your comments and thoughts…

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