My Visa card just notified me of suspicious charges. And they were right!
I have over $500 spend at Big Lots and Automall in Texas. Clearly not in Texas. Kudos to Visa and the Fraud warning system for catching this and notifying me. Rather painless!

Fraud Victim Today!

For a while the No Fee 0% Balance Transfer Credit Card offers went the way of the dodo and were nowhere to be found.  However, Discover Card has brought the no fee 0% APR balance transfer offer back from extinction!

The Discover More Card is one of the only credit cards right now that is offering NO balance transfer fee and NO annual fee.  Trust me, I’ve looked at almost every offer.

Up to 5% Cash Back Rewards

Not only do you get no balance transfer fee for an introductory 0% balance transfer rate and no annual fee, the Discover More Card still offers one of the highest cash back rewards on a credit card today.

This is a LIMITED TIME OFFER so jump on it while you can!

Best No Fee 0% Balance Transfer Credit Card!

The classic “mag stripe”, that long black strip on the back of your credit could have numbered days.

MasterCard has just released a Roadmap to replacing the beloved (and mostly hated actually) mag stripe with the EMV technology currently found on chip based credit cards.  Clearly EMV provided enhanced security and at least in the short term will protect against credit card skimming scams.

Not only that, Chris McWilton, President of US Markets stated that MasterCard is “readying the ecosystem to drive future innovation and provide new consumer experiences to enhance the value of electronic payments.”

This is a bold statement and one that has been made time and time again, even by my large bank employers.  But time and time again the powers that be fail to provide new customer experiences.  Even contact less payment systems like PayPass by MasterCard hasn’t really taken off.  Also, Europe and most of the world has readily adopted the Chip and PIN credit cards while the US and North America is dragging its feet.

Let’s hope we can get more security with and easier payment methodology.

If you’re fascinated about EMV payment systems and MasterCard’s roadmap, feel free to check out their press release here.

Death of the Credit Card “Mag Stripe”

Most of my posts reflect on past experiences of mine working at some of the largest US banks in the credit card and risk management groups.  While shopping at Macy’s I was reminded about my time working in what they called the “co-brand” group.  Co-brand credit cards means cards that are branded with both the issuing bank (like Citibank, Chase, or CapitalOne) and another company such as Macy’s, JCPenney, Walmart, etc.

Why are co-brand cards important?

Well, they aren’t really that important – for the banks that is.  It’s actually secretly a struggling area of the banks.

It’s hard to make money on c-branded cards.  Why?

First, most customers that sign up for a co-branded card is to get that awesome 20% off the big screen tv purchase or for that free bag of dog food that came with that poodle (what a mistake that was!).  This is a problem.  Most customers like this don’t ever use the credit card again or use it only at the store that is brnaded on the card for the ongoing discounts.

Banks make money from 1) a fee from transactions 2) interest charges and 3) fees (a generalization but somewhat true).  In this case there are very few transactions and balances are low so that interest revenue is also low and many people that prey on good deal offers from credit cards tend to pay off the balance before that 0% APR expires.

Second, people who sign up for a Walmart card for discounts tend to have bad payment behavior and are riskier and default more.  Bad.

But stores love them

You must wonder why then stored push so aggressively for you to sign up for these cards.

It’s for the same reason as the above.  People get the cards to purchase.  Purchases are good for retailers.  Credit losses on the credit cards don’t really affect retailers as the banks suffer these losses.

Having a branded credit card also breed loyalty and is free marketing.  Sometimes the deal with the store is that they get to keep a small percentage of the transactions outside of the store.  A win-win.

Should you get one for that awesome deal?

If the deal is a free 50″ LCD tv, hell yeah.  I would too.  But most of the time the deal isn’t that good after the short term.  If you don’t plan on using the card after you get the deal.  Then don’t sign up.  Not using a credit card is bad for your credit score and credit history and closing a credit card is even worse.

I would recommend waiting and signing up for a good rewards card you would actually use that comes with a great No Fee 0% APR Balance Transfer Offer.

Reflections: ‘Co-Branded’ Credit Cards

Like it or not your credit score is extremely important and raising you credit score or FICO score can be time consuming and difficult.

You FICO score lets banks understand how creditworthy you are based on a very complex and secretive algorithm that is constantly updated based on new data and general consumer behavior.  What determines a FICO score is tightly guarded secret.  Lucky for us, some people, such as myself, have been attempting to replicate to score for banks to allow them to determine who to approve for a credit card.

There are a few key factors that determine your credit score:

1. The length of your credit history

Having a “thin file” means a short credit history.  The shorter your credit history the worse off you are.  If you don’t already, be sure to open some savings and checking accounts at your local bank.  Also try and get approved for some credit cards for people with short credit histories or bad credit.

If you are young and are a student try applying for student credit cards that are geared especially for you.  A good option is the Discover Student Card.

2. Your Utilization Rate

Your credit card utilization rate is how much of your total credit line you are currently using.

For example, if you’re credit line is $1,000 and you have a balance of $900 you’re 90% “utilize” ($900 divided by $1,000).

For you have a good credit score you need to show that you are a responsible spender and that you can manage credit.  Using your credit card is a good thing for your credit score but you want to stay around the 30% utilization rate marker.  It’s always a good idea to pay off your balance and spend more the next month.  This will also save you money on interest charges.

3. Use credit cards and avoid debit cards

Debit cards are getting popular and are becoming widely accepted since they are usually on the Visa and MasterCard networks.  However, the problem with debit cards is that they don’t help improve your credit history or credit score.

Debit cards are not credit products (thus the name debit cards).  They are associated with you checking or saving account and allow spending on only the money you have saved away.  There is little risk to the banks that is why they don’t report them in the same way to the credit reporting agencies adn they don’t impact you’re FICO score.

Be sure to have at least one credit card product.  But be sure to spend only what you can pay off to avoid carrying a balance and incurring interest charges.  If you are new to credit cards, you’re unlikely to have a low interest rate so be sure to pay the total balance every month.

Enjoy a good credit score

Having a high FICO score and good credit history can be liberating and also save you a lot of money.  Be diligent and patient when rebuilding your credit history and reap the rewards later with better credit card offers and low loan rates such as mortgages and auto loans.  Sometimes you might have to reduce your spending and keep a better watch on your expenses, but believe me, it’s worth it in the long run.

Easy Tips to Improve Your Credit Score

Getting approved for a credit card

As the US economy struggles, banks are making it harder for consumers to get approved for credit cards and it is becoming harder to benefit from great balance transfer promotions that can help you save money.

Here are 5 tips to ensure that you get approved for that credit card with great rewards and a balance transfer offer.

1. Know your credit score and credit history

Being rejected for a credit card application is a scar on your credit history that takes years to recover from.  The best way to avoid this is to know your credit history and credit score so that you can only apply to credit cards and offers that you are likely to get approved for.

The best way to do this is to get your free credit history that federal law states you are privy to once a year.  But this credit history does not include your credit score which is what credit card issuers and banks use to determine your credit worthiness.

To get a free credit score and credit monitoring you can use GoFreeCredit 3-in-1

2. Use your existing credit cards wisely

Credit card issuers look closely at your current spending behavior to determine your creditworthiness.  It’s important to not use up all of your credit line as this shows that you are at risk of going overlimit and they question your ability to make large payments again your credit card debt.

For example, if your credit line on one card is $1,000 and you carry an average balance $900, you are considered 90% “utilized”.  This is high.  It will be better to spread the balance out over your other cards and carry a balance of $300 on three separate cards which makes your highest utilization 30%.  Much easier for a credit card issuer to swallow.

3. Close credit cards you do not use

We all have credit cards that we don’t use, I am at guilt of this as well. Credit card companies see this as a risk and your total “exposure” or total credit limit will be higher and they won’t want to increase that by giving you another credit card.

It is also true that closing credit cards temporarily harms your credit score.  But the medium to long term benefits are much better by allowing you to increase your credit rating and lets you apply for new credit cards and offers.

4. Pay on time

This almost sounds stupid to say, but pay on time!

Sometimes we just forget but be sure to use these tips to avoid late fees and damage to your credit history.

5. Have other banking products

Credit card companies look at how “bankable” you are by assessing what other financial institutions are giving you.  It’s always good to have a checking and savings account at a bank to show that you are financially sustainable and marketable.  It’s very easy to open a checking and saving account and having these will make your life a lot easier anyway.

Walk to your nearest or friendliest bank and open one today if you don’t have one.

How to Get Approved for a Credit Card

Looks like the US isn’t the only kings of online shopping.  Recent data show that the EU is increasing extremely fast as they eschew physical stores in favor of online shopping, and of course purchases using credit cards.

A new report from Kelkoo claims that online purchases in the EU will reach €232 billion this year in 2012.

This represents a growth of 16 percent over 2011.  In comparison the US only increased online shopping by approximately 12% meaning that Europeans are expanding faster into the virtual space for shopping and use of credit cards.

Not figures that Walmart and traditional stores like to hear.  Go Amazon.com!

EU Online Spending Grows to €232 billion

I recently received this email in my inbox. It was suspicious to begin with and after some research is obviously am internet fraud and internet scam.

These emails are more and more prevalent and here are some telltale signs.

1. The from email isn’t directly from the source.  For example, this email came from: twitter-support-myemail=gmail.com@postmaster.twitter.com

2. Check the url that the link is directing you to.  When it is not the same as the url advertised, you’re being scammed:

3. If you look above the html email wasn’t generated properly and it just aid “Hi,” with no specific name or account association.

Out of an abundance of curiousity and recklessness, I went to the link in preparation for the worst.  But it ended definitely being a fraud and scam but it redirected me to a Canadian Pharmacy.  Not the worse but would you buy meds from a site that just scammed you into going there?

New Twitter Internet Fraud and Scam

What is a credit report?

In short, your credit report is your financial life if not your entire life!

Your credit report is used to determine your creditworthiness and this determines the credit card, debt, loan, mortgage rates that you will be able to secure.  A good credit report can save you a lot of money.

Credit reports contains a lot of personal information on you including your residency, job history, income history, existing credit cards, existing debts, and previous loans.  Payment behavior is also collected to make an informed judgement on how well you manage debt and how much banks and other creditors want to lend to you.

Can I get a free copy of my credit report?

Federal law states that all credit bureaus (Experian, Equifax, TransUnion) are required to give you one free credit report each year.  You just have to ask and request one through www.freecreditscore.com.

I am recommending FreeCreditScore because other free services only provide your credit report.  However, what is equally important is knowing your actual credit score.  This one number is what determines how attractive you are to lenders and what offers you are able to get.  If you don’t want your credit score you can always go www.freeannualcreditreport.com

The fine print

When you order your free credit score here, you will begin your 7-day trial membership in freecreditscore.com. If you don’t cancel your membership within the 7-day trial period*, you will be billed $14.95 for each month that you continue your membership. You may cancel your trial membership anytime within the trial period without charge.

How to get your credit report for free

So many choices!

There are so many payments networks available. Visa and MasterCard are the most prominent but then there is also American Express and Discover as well as Diners Club.  So what’s the difference and which should you pick?

Visa: Visa is the largest payment network in the US.  If you have a Visa credit card you can use it virtually at any shop that accepts credit cards.  It will be very rare to not be able to pay with Visa.  Visa also conducts fraud detection on transactions on your account.

MasterCard: MasterCard is almost as widely accepted as Visa.  They have a great global network and provide similar services such as fraud detection and secure transaction processing.

So, what’s the difference?

Honestly, very little.  As a consumer you are unlikely to notice any difference between Visa and MasterCard in terms of acceptance and the ability to make purchases.

What about fees and charges?

Some believe that those pesky late payment fees and over-the-limit fees are charged by the network like Visa or MasterCard.  However, that is untrue.  It is the credit card issuer, most likely your bank, that is charging this fee.  This is why fees vary depending on your issuer and the credit card you are holding. The interest rate or APR on your credit card is also determined by the issuer and bank and not Visa or MasterCard.  That is why selecting the right card is important.

MasterCard and Visa merely facilitate the transaction by linking the funds from merchant to issuer/bank while taking a small transaction fee based on the purchase amount.  But again, the consumer won’t see this fee as it is charged to the merchant/store and issuer/bank.

What about the other issuers?  Amex, Discover, and Diners Club

Amex or American Express is traditionally a premium brand that offers better services and benefits to its cardholders.  Also, on man Amex credit cards you are not permitted to revolve or carry a balance over from one month to the next.  The entire balance is due.  This has been changing recently and Amex have been releasing many new credit cards that allow the consumer to carry a balance and incur debt while charging an interest rate or APR.

Amex still holds prestige and claims better customer service and is widely accepted across Europe and in the travel sector.  However, I would not advise traveling or having only an Amex credit card in your wallet.  You’ll find yourself not being able to purchase something at a store.

Amex charges merchants a higher transaction fee than Visa and MasterCard claiming that the Amex brand and their customers will be better consumers.

Discover is another network that is essentially in the US.  Since they manage their own network they are able to offer better rewards and have the famous 5% cashback offers across different categories.  It’s a great credit card to have to maxmize your points, but like Amex, don’t let a Discover card be the only credit card in your wallet.

Diners Club used to be a super premium card targeting world and business travelers.  However, they struggled recently as Visa and MasterCard began to dominate and payment networks became consolidated.  Diners Club has since been integrated into the MasterCard network so it can be used virtually anywhere but they still offer better service although usually with a fee or if you’re lucky you can get a Diners Club through your company.

Which is better? Mastercard or Visa? Amex or Discover?