Protect Your Personal Information This Holiday Season

Locked WalletJP Morgan. Home Depot. Goodwill. And, yes, the IRS. Those are just four of the 636 data breaches that occurred through the first 10 months of 2014, a 30% increase over the same time period last year, according to the Identity Theft Research Center. Is it any wonder consumers are experiencing breach fatigue?

That’s what a new study of more than 1,200 consumers conducted by Morpace on behalf of LifeLock reveals. Consumers are very worried about their personal information being pilfered and used for identity fraud – two-thirds describe data breach as a serious life disruption, and half think it would be one of the worst things that could happen to them. But data breach is now so common that the overall attitude of many seems to be one of helplessness, with about half of consumers agreeing that they don’t know how to prevent data breach or what to do if it happens to them.


Mailbag Monday: Secured Credit Cards to Establish Credit

collegemoneyHi Jean,

I’m wondering — what is the best secured credit card I could open to reestablish my credit? Thank you.


Mailbag Monday: Using The Fair Credit Reporting Act

debitcardHave you ever heard of a person being denied obtaining a credit card with a FICO score of 811? I pay my credit cards in full every month. This credit card offered two plane tickets. I really didn’t need the card, but I travel a lot and thought it was a nice benefit. What are your thoughts?


Wednesday Welcome: Using Micropayments to Pay Down Credit Card Debt

This week we bring you a second guest post from Bill Hardekopf, the CEO of Last time he was here, he shared some little-known credit card perks, and today he’s helping you pay down your debt with micropayments. What exactly are micropayments? Read on.

Bill_Hardekopf (color)Summer vacations are just around the corner, and consumers need to have their credit card balances as low as possible in order to avoid costly interest charges. One way to do this is to make micropayments on their credit card bill.

Most consumers pay their credit card bill once a month, but cardholders can actually make a number of smaller payments throughout the month. Some banks and issuers allow payments to be made as often as once a day.

If you carry any balance from one month to the next, micropayments can reduce the interest because most credit card companies charge interest based on your average daily balance during that particular month. If you pay more often, you reduce your average daily balance and, as a result, the interest you pay that month. (more…)

Mailbag Monday: Solving Credit Conundrums

debitcardI need a reputable resource to help me with credit card debt. My husband and I make over $200,000 annually, but are drowning in debt.  Is consumer credit counseling a good option?

-Mary Beth

I am interested in consolidating my credit cards into one monthly payment. Please advise on organizations that offer this and please note that I am not looking for debt reduction.  Thank you




Mailbag Monday: Using a Personal Loan to Pay off Credit Card Debt

debitcardI was able to get a personal loan from my bank (with a low interest rate) to pay off $40,000 worth of credit card debt.  I have a total of nine cards. Is it advisable to cancel the cards that I have paid off?  Should I cancel the ones with a higher or lower credit limit? I don’t see myself using these cards in the future so is it wise to even keep them?

– Kris

Hi Kris. I’m going to give you the answer you asked for – and some advice you didn’t.  And then I want you to print this out and tape it to your fridge so you look at it every day. Although I’m sure you’ve read that cancelling credit cards hurts your credit score because it’s a knock on your credit utilization (the percentage of credit you have available to you, compared to the amount that you’re actually using), in your case closing some is the right thing to do for two reasons.  First, you simply have too many.  And second, it seems as if they’ve been too tempting for you in the past.  Start by closing the ones with the lowest limits, the highest annual fees and the highest interest rates.  In other words, hang on to the ones that – once you get your act together – you might want to use as a tool to make purchases you pay off every single month.

Getting your act together is the thing that you didn’t ask about – but that I’m going to address anyway.


Mailbag Monday: Paying Off a Balance Transfer

debitcardHi Jean. I recently transferred a portion of the balance on my higher interest credit card to a Slate 0% card. Is it better to focus on paying down the higher interest card or getting the balance on the 0% card paid off within the introductory offer period?

– Trish

Oh Trish! I have to tell you, I have thought of this question so many times and never, ever been asked it.  In the best of all possible worlds, you’d transfer all your high interest rate debt to the Slate card, then wail on it at that 0% interest rate to make as big a dent in the teaser period as possible. (You did choose well when it comes to balance transfer cards, by the way — the 15 month 0% interest rate is just about as good as it gets.)


Mailbag Monday: Rebuilding Your Credit

debitcardI’m a recent widow and was left with no insurance.  My house is being sold via short sale and I have moved to a small apartment, where I’ve paid the rent on time for the full year I’ve been here.  I would like to open a credit card, but would like a suggestion on where to go.  I know my credit rating is very poor, but I would like to get it back on track.  Do you have any suggestions?

– Jill

Hi Jill.  I’m so sorry for your loss and for the tough time that has followed.  The answer is that there are credit cards available for you.  Most of them are secured cards, so called because you deposit a sum of money (usually a couple to a few hundred dollars) to secure your credit.  The best of these report to all three credit bureaus on a regular basis, which enables you to build the sort of credit you need to eventually get a regular old credit card.

Among these, the folks at recommend the Capital One Secured Mastercard, which you can get with a deposit of as little as $49. If you’d prefer a card for which you don’t have to make a deposit, look at the Credit One Bank Credit Card with Gas Rewards (it gets around the deposit by charging an annual fee of $35 to $75.) Note: Your credit limits on both of these will be low, but your interest rate high.  So whatever you get, use it as a credit-building tool.  Note what your credit limit is.  Never rack up purchases that account for more than 30% of it at any time. And pay it off every single month.

Mailbag Monday: Help! My Issuer Canceled My Credit Card

debitcardMy husband called Chase Visa about his Marriott card (which he has had since 2002 in excellent standing) to have his 22.4% interest rate reduced (which I have done often for my card based on your recommendations– I now have 13.2% for a long time).  They refused. He asked for a supervisor who also flatly refused.  He told them he would cancel his card, and they did!  He carried a large balance each month, and was either paying off a large portion of it or, lately, paying the total balance.  We enjoyed the Marriott points, but now he says he will share my card and use his American Express instead.  Is this typical in this economy? Thanks so much for your time.

– Jennifer

Hi Jennifer.  I really can’t say how typical it is.  It’s been a very long time since I’ve seen a large piece of research where hundreds or thousands of people tried – at once – to get their interest rates lowered and the results were recorded.  (Hey US PIRG: How about it?) Anecdotally, though, I’ve heard some stories like yours.  I’m very glad your husband is paying off his balance every month – rewards, whether they’re hotel points or frequent flyer points or even cash back, are never worth what you pay in interest.  What I would suggest is figuring out what kinds of rewards matter to you the most and then perhaps applying for a card that will give you a lot of them.  The Amex may do the trick for that, but there are a lot of cards offering big bonuses these days just for signing on and spending a few thousand dollars in the first few months (which business travelers like your husband often do anyway).  You might as well get the kind of rewards that can put you on a tropical island (or wherever you want to go) for a few days for free.

Wednesday Welcome: Five Credit Card Mistakes You Never Want to Make

This week we welcome Beverly Harzog, a frequent source of mine when it comes to credit card issues and author of the new book, Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made. She was nice enough to welcome me to her blog last week and I am happy to return the favor. Here she is with five credit card mistakes to avoid: 

harzog-about-meCredit cards can be a really useful money management tool. If you take time to understand how to use credit wisely, you can even make a profit from your credit cards.

But if you don’t know the rules of the game, you can end up in trouble in no time at all. Here are five credit card blunders that you want to avoid at all costs.

Mistake #1: You open several credit cards at one time. This mistake is often common among those who are new to credit cards. How do I know this? Because I made this exact mistake when I got out of college.

You open the envelope and pull out your first shiny card and see your name on it. It’s a rush! More offers start rolling in and you don’t see why you shouldn’t apply for all of them.

Well, there are plenty of reasons to stop yourself. Each time you apply for a card, the credit card issuer does what’s called a “hard inquiry.” This can knock two to five points off of your FICO score.

Another good reason to say no to multiple cards?  When you’re new to credit, you need to gain experience when it comes to managing a credit line. So take your time and build a good credit history slowly.

Mistake #2: You don’t have a budget. One of the biggest contributors to credit card debt is the lack of a budget. Without a spending limit, you could easily charge more with your credit cards that you can cover with your monthly cash flow.

Remember, a good budget isn’t a constraint that ruins your fun. A budget actually puts you in the driver’s seat because you’ll be able to see a clear view of your expenses and cash flow. And most importantly, you’ll have control over how much you spend.

Mistake #3: You don’t track your spending. This is a detail that often falls between the cracks. You might think this will be a pain, but these days, there are so many options and many of them are even fun to use. You can choose from oodles of smart phone apps, free money management software on the Internet, or create your own spreadsheet if you’re tech savvy.

Be sure that you have a limit for the amount you plan to put on each credit card and then stick to the plan. Check your credit card accounts online every week just to make sure you’re on top of everything.

Mistake #4: You don’t pay your bills on time. Make sure you pay not just your credit card bill on time, but all of your bills on time. If you don’t, your credit score will suffer.

A lot of folks don’t know that a bad credit score can increase the rates they pay for health insurance, car insurance, car loans, and more. An excellent credit score actually helps you save money in many areas of you life.

There are a variety of ways to set up reminders, such as text or email alerts. So do what it takes to pay all of your bills on time and protect your score.

Mistake #5: You carry a balance. Sometimes this starts innocently and you think you’ll carry a balance just this once. But then, before you know it, it’s six months later and your balance is getting bigger due to compound interest.

Look, life can get awful messy at times and emergencies happen. But unless you’re in dire straits, make a vow that you won’t carry a balance.

So pay your bill in full during the grace period. For those who don’t know, when you use your card to make a purchase, the grace period is the amount of time you have to pay the bill before interest charges kick in.

About Beverly: Beverly Harzog is the author of Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made. She is a nationally recognized credit card expert, author, and consumer advocate. She’s appeared on Fox News, CNN Newsource, ABC News Now, and top media markets across the country. She is a frequent guest on syndicated radio shows, and her advice appears regularly in print and on major websites, including the Wall Street Journal, The New York Times, USA Today, SmartMoney, Money Magazine, U.S. News & World Report, New York Daily News, Washington Post,, and more. Beverly runs a popular credit card blog on her website and has coauthored two books, The Complete Idiot’s Guide to Person-to-Person Lending and Simple Numbers, Straight Talk, Big Profits! She lives in Johns Creek, GA.

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