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Warning about online fraud as information theft rises

Fraudsters traded 12 million pieces of personal information online between January and April this year, according to research.

The figure represents a threefold increase on 2010.

Credit-checking company Experian, which produced the figures, said the increase was partly due to consumers having a growing number of online accounts.

Consumers now have an average of 26 separate online logins but just five different passwords.

Experian said many people were unaware their identity had been stolen until they were refused credit cards or mobile phone contracts.

It advised people to change their passwords regularly and make them more complicated so they are harder for fraudsters to crack.

A selection of security devices provided by banks

Since banks brought in “two-factor” authentication, fraud has fallen significantly

Two thirds of people have accounts they no longer use but have not closed down, leaving them vulnerable, the research found.

This was borne out last week when hackers broke into Yahoo’s servers and stole 450,000 passwords, many from defunct accounts.

Those who had been victims of the growing issue of identity fraud suffered:

  • refusal of loans or credit cards (14%)
  • debts being run up in their name (9%)
  • refusal of mobile phone contracts (7%)
  • being chased by debt collectors for money they did not owe (7%)

Every week brings fresh headlines about stolen IDs. Last week, alongside the Yahoo hack, it was revealed that one million user IDs had been stolen from the Android forum and graphics hardware maker Nvidia said 400,000 passwords had been stolen from its forums.

This led Microsoft to reveal that 20% of Microsoft account logins are found on lists of compromised credentials as a result of hacks into other websites.

Writing on the Microsoft blog, Eric Doer said “These attacks shine a spotlight on the core issue – people reuse passwords between different websites.”

WHAT MAKES A GOOD PASSWORD?

  • Use a password checker, such as this one, from Microsoft, to see whether your password is strong or weak
  • Strong passwords contain a mixture of letters and numbers, the more random the better
  • Users worried about remembering obscure passwords can use random password generators
  • Online random password generators should not be used for secure services such as bank accounts
  • Using first letters of a speech from Shakespeare or a favourite poem offers one way to keep it obscure but memorable
  • It is OK to write passwords down as long as the paper copy is kept safe
  • Avoid dictionary words, words spelt backwards, sequences or repeated characters
  • Never use personal information such as date of birth

Warning about online fraud as information theft rises

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Steps to boost credit score when a mortgage is the goal

By 

Q:   Dear Credit Care,
Help! I’m getting mixed information about having multiple “store” credit cards that have a zero balance most of the time. Over the years I’ve accumulated cards for various stores to get their deals. I’d like to pay all these off to a $0 balance but am planning to buy a home in a year and need my credit score to go up by at least 50 points. I was told to use these small cards on occasion then pay them right off. Also, what about larger cards — is it going to hurt my score to pay them off and let them “sit on ice” as they say? I really need help and I feel like I need a Ph.D. to understand the way scores work. Thank you! — Katalina

 A:   Dear Katalina,
Credit scoring can be confusing, but you don’t need a doctoral degree to use them to your advantage. Your credit score is based on the information contained in your credit reports available through the three major credit reporting bureaus, Equifax, Experian and TransUnion. To fully understand what can affect your credit score, I recommend you obtain free copies of your credit reports. Visit www.annualcreditreport.com to access your credit reports online, or you can request copies by phone at 877-322-8228.

The first thing I recommend you do when you receive your credit reports is to review them for errors. With billions of pieces of information reported each month to the credit bureaus, mistakes do happen. You do not want to be penalized for someone else’s credit missteps that are erroneously reported on your credit report. Dispute any inaccurate information with the credit bureau reporting the error.

While there are many types of credit scores, lenders and other interested parties most often use two source, FICO and VantageScore. You might consider checking with the lender where you hope to secure a mortgage to learn which score they use in their lending decision process.

The widely used FICO score is calculated based on these categories and percentages:

Payment history: 35 percent
Amounts owed: 30 percent
Length of credit history: 15 percent
New credit: 10 percent
Types of credit used: 10 percent

Your VantageScore is calculated based on these categories and percentages:

Recent credit: 30 percent
Payment history: 28 percent
Percentage of credit limit used: 23 percent
Age and type of credit: 9 percent
Total of balances: 9 percent
Available credit: 1 percent

Each of your credit reports will have a section at the end that explains what actions could be taken to improve your credit score. Review your reports and follow the advice based on the contents of your credit reports to boost your score.

As for your question about balances, in general terms, it is better to have your revolving accounts at a zero balance, than to carry a balance from month to month. It should not hurt your score to pay down your bank credit cards to a zero balance.

Mortgage lenders will review your credit report(s), not just your credit score. You might consider making an appointment with your lender and take copies of your credit reports with you. Request that the lender point out to you any areas that may be of concern. One area may be the amount of credit that you have access to because of the large number of store cards and bank cards that you have open. When granting a large loan like a mortgage, you may be considered a greater risk if you have existing credit accounts that, if used, could amass debt beyond what your income will support. A remedy may be to close some of your revolving accounts.

Handle your credit with care!

Read more: 
Compare credit cards here – CreditCards.com

See related: VantageScores: What they are, why they matter

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5 steps to lose debt, get credit fit

By Dawn Papandrea

Getting in shape for bathing suit season can be just as daunting as paying off outstanding credit card debt. If you adopt a regular exercise routine and reduce your calorie intake, however, you can walk into a dressing room with confidence. That same determination can help you get your finances in shape.

Here’s how to start a healthy financial fitness routine that will help you shed some of that unwanted debt and learn to use credit wisely.

1. Set small goals. As much as you would like to, you can’t lose 20 pounds in a week — or years of debt in one month. Don’t be intimidated, though.  tart by Your best chance of getting all the way out of debt starts with taking a realistic picture. “Before you even set up goals, see where you stand,” says Scott Gamm, personal finance expert and founder of HelpSaveMyDollars.com, a consumer education site. Tally up the balances on each of your credit cards, your student loans and any other debt you have, and then figure out how much you can reasonably afford to throw toward this debt, he says.

Once you’ve done your number crunching, take a page out of weight loss plans that incorporate a jump-start period designed to shed a few pounds early on and encourage you to move forward. “Work to pay your smallest debt off first for a boost in your financial morale,” suggests Jennifer Streaks, financial columnist and pundit on MSNBC and Fox. “It can get your motor running by seeing that sense of accomplishment.”

2. Change your mindset. Some people turn to ice cream, others to online shopping. If you’re an emotional spender or simply like hitting the mall out of boredom, you need to find a replacement for your retail therapy, stat. “You have to look at credit differently, especially in this economy,” says Streaks. “It’s not just buying a pair of shoes on sale. You’re still going to have that interest payment long after the shoes are in the back of the closet,” she says. In other words, learn this mantra: “Credit is not my excuse to have a good time going shopping.”

Gamm’s advice is similar to how some dieters post a photo of their leaner days on their refrigerator. “Write down whatever amount of debt you’re in and put that on top of your credit card in your wallet to remind you of your goal when taking your card out,” he says.

3. Avoid “empty” spending. Just as empty calories do nothing for you, neither does empty spending. Financially vulnerable people should avoid automatic bill payments for optional spending such as cable, phone and gym memberships, says Streaks. “Every month, have that bill come to you and touch it. If you’re seeing what you are paying, you’ll think about it,” she says. You might realize you haven’t even been to the gym in four months or that your platinum movie channel package is a waste of money.

Gamm agrees, adding that it pays to get on the phone and try to lower your bills whenever possible. “If you’ve been a good customer, call up and ask about loyalty credits, or consider canceling and going to a different provider,” he says. Another option when it comes to your credit payoff plan is to look into balance transfers that can save you money on interest. The key is that you must reach your payoff goal before the zero- or low-interest period is up.

4. Learn to use credit in moderation. One cannot live on celery sticks alone forever and in our online spending age, credit cards are practically a given, says Gamm. “And if you’re a young person, you have to use credit cards to build credit,” he adds. Resisting the urge to go on a credit binge is vital. “Your goal should be to pay it off in full at the end of the month,” he says.

Streaks says you have to find a method that works for your lifestyle, pointing out that some people are better served by adopting a cash-only policy. No matter your preference, however, she notes that it’s important to learn to live without instant gratification. “If you know you need a big purchase, you need to plan for that. Do the research and find the best price,” she says. And then save up!

“Write down whatever amount of debt you’re in and put that on top of your credit card in your wallet to remind you of your goal when taking your card out.”

5. Create a support system. Everyone likes to go out and have fun, but if you have friends with expensive tastes, you may have to sacrifice a few events here and there. “It’s a tough balance because you don’t want to seem a cheapskate, but something’s got to go if you’re really serious about getting out of debt,” says Gamm. It’s also likely that your friends have their own financial issues, and might even be grateful if you suggest keeping entertainment costs to a minimum.

Support in your own household is imperative, too. Just as going to the gym is much more successful when you have a friend to keep you accountable, the same is true for sticking to a financial plan when you have a family. “You don’t want to portray a lifestyle to your kids or spouse that’s not possible,” says Gamm. “It’s important for everyone to be on board with family’s goals.”

Once you put your financial fitness plan into action, you’ll watch your debt shrink and be on your way to the best financial shape of your life.

Read more: 
Compare credit cards here – CreditCards.com

See related: 8 steps to reducing credit card debtHow to shape up your finances in 12 months

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6 Easy Ways to Deter Identity Theft

By JEANNE KELLY

Are you really who you say you are? It might surprise you to discover that you’re not!
Most transactions of money and information are performed electronically. Although it’s quick and convenient, there is also a risk that our information might fall into the wrong hands. If the wrong person gathers enough information about us, we may suddenly find ourselves the victims of identity theft. Unfortunately, identity theft has more far-reaching consequences than simply tarnishing our name; it can cause the financial system to turn on us by saddling us with debt that we did not incur! Here are six easy ways to deter identity theft and ensure that you keep your good name (and credit!) safe from thieves.

1. Check your personal financial information often: Go through your bank statements and credit card bills line by line each and every month. Not all thieves will run up your card to its credit limit. Some will charge small items for several months because we don’t always check those $10, $50 or $100 charges on our card. Make sure you can account for every one and investigate anything you don’t recognize.

2. Pull your credit reports from all three agencies (Experian, Trans Union and Equifax) on a regular basis and make sure that the credit accounts match up.

3. Don’t use security codes, passwords, and PINs that people can guess. Avoid birthdays and anniversaries, the last four digits of your phone number, or consecutive numbers (like 1234). (Bonus tip: Don’t use the same password among all of your financial accounts).

4. Change your security codes, passwords, and PINs at least once a year.

5. Develop an “emergency kit” just in case your walled gets stolen or your computer gets hacked. This list should include all of your account numbers as well as a list of phone numbers to call to alert them to the theft. Keep this list handy and constantly updated and as soon as you find out that you’re the victim of theft, pick up the phone and call that list!

6. When throwing papers out, shred anything that has your name and address (and other identifiable information on it). Be sure to also shred any credit card offers you get! These are easy targets for identity thieves to pull out of your mail, change the address, but still use your name and credit to get a card.

As our world becomes increasingly interconnected, it becomes easier for hackers and thieves to get at our information. Many Americans are the victims of identity theft every year. Don’t be one of them. Be diligent and guard your information closely.

6 Easy Ways to Deter Identity Theft

Newton Credit Card Blog

What Credit Card Perks Can People With Good Credit Earn?

by Credit.com

For consumers with good credit, now might be the best time ever to seek out new credit card accounts. After a period of relative stinginess with credit during the economic downturn, lenders are aggressively marketing all sorts of accounts to consumers. But this time around they’re going after those borrowers top-notch credit ratings, often extending offers for cards with a wide range of benefits, known as “rewards cards.” However, if you have good credit and you’re wondering just what may be available to you, the variety can get a little confusing.

[Free Resource: Check your credit for free before applying for a credit card]

The first thing you should know about the offers available to you is that if you have a higher credit score, you’re considered far less risky of an investment. As such, lenders don’t feel the need to give you high interest rates, and you’ll likely end up paying far less for these accounts than consumers with lower credit scores. The higher your rating, the lower your available interest rates will be, and that can save you a lot of money, especially if you carry a balance from month to month. In addition, many of these accounts might come with annual fees that would add to your balance if you had a lower credit rating, but these are frequently waived, at least for the first year the account is open, for those whose scores are higher.

And if you have a good credit rating, you’ve probably also found that you’re getting a lot of offers for rewards credit cards. These are available to many borrowers, of course, but the offers for the very best rewards accounts will likely be available to you. These accounts will, again, carry lower interest rates, but will also be more generous in extending you greater benefits, such as a higher base points earned per dollar ratio, as well as added bonuses for spending in certain types of categories. Some offers might also grant you hundreds of dollars worth of miles, points or cash back just for signing up, and then even more if you meet certain spending thresholds within the first few months the account is open.

But the way you got your good credit rating in the first place was from knowing the the value of being prudent with your finances. Don’t lose that habit. Closely examine any credit card offer you receive, weighing its various benefits and potential drawbacks, and think about how opening such an account will affect all aspects of your finances – not just your credit score.

[Related Article: The Cost of “Rewards”]

What Credit Card Perks Can People With Good Credit Earn?

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Google Muscles In On Mobile Payment Game For Devices

by Credit.com

Apple is at the top of the heap when it comes to its devices being used to process mobile payments, but Google has set its sights on becoming a major player in the market.

[Related Article: Why You Shouldn’t Fear Contactless Smart Cards]

Apple’s mobile devices – the iPhone and iPad tablet – are the two most ubiquitous handsets in use when it comes to merchants accepting mobiletransactions, but Google, with portable devices of its own, has a plan to supplant the current leader, according to a report from American Banker. The competitive advantage it may have in gaining a larger foothold in themobile transaction industry is that it, unlike Apple, has its own mobile payment processing system in place, and does not need to lean on third party companies.

[Free Resource: Check your credit for free before applying for a credit card]

Apple does, however, work closely with a number of companies – including relatively new startup Square and older firms like VeriFone Systems – to develop and promote use of third-party payment processing platforms, the report said. With the devices created by these companies, iPhones and iPads can accept credit card payments, and this transaction method is growing in popularity.

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The web giant’s payment platform, known as Google Wallet, is still in development, but could be tied to a number of different services to incentivize use for both businesses and consumers, the report said. Forexample, the company could allow merchants to attach loyalty rewards programs to Wallet to make it more convenient for shoppers to use the service, and shoppers could be further benefited by being able to apply coupons to their account without clipping anything.

When you tie the ability to do couponing with payment, it is more interactive for the consumer and better for the merchant, who can control how they will play with incentives to drive people in the door,” Rich Miner, a partner atGoogle’s investment arm Google Ventures, told the news site.

[Credit Cards: Research and compare credit cards at Credit.com]

The future of mobile purchasing is still relatively unclear insofar as it’s difficult to predict exactly which type of paymenttechnology will catch on with consumers, but experts say that the industry itself will become quite valuable in the near future regardless. Some estimates put the annual value to companies in this industry at a total of $44 billion by just 2015.

Google Muscles In On Mobile Payment Game For Devices

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Brokerage Credit Cards: Can You Shop Your Way to a Fatter Portfolio?

By Tim Beyers, The Motley Fool

New research from Bankrate.com finds that one in four Americans owes more in debt than they have in emergency savings. Another survey, this one from the Consumer Federation of America and the American Savings Council, found that nearly half of us believe we aren’t saving enough to provide a “desirable standard of living” in retirement.

Factor in the accelerating decline of Social Security, and it’s easy to understand the allure of brokerage credit cards.

Never heard of those? Think cash-back cards, but the cash back is added automatically to your investment account, where it grows like the rest of your portfolio.

Shop, earn cash rebates, and then deposit the kickbacks into a brokerage account for capital appreciation. Free money creating more free money: What could possibly go wrong?

Plenty. Just like any other type of card, brokerage cards charge interest on balances. They’re also more likely to charge annual or transactions fees because of the benefits of depositing directly into any of a multitude of accounts.

Bigger Portfolio or Bigger Fees?

Last year, broker Charles Schwab (SCHW) stopped promoting its card for account holders, shunting existing cardholders to an offering from Bank of America (BAC). Yet some of Bank of America’s “benefits” can actually result in higher fees if you’re not careful. For instance, with the BankAmericard Privileges account, you get 50% more cash back if you deposit into a B of A checking account. Sounds great, except that you’ll pay account maintenance fees (at minimum) unless you arrange for regular direct deposits or keep a minimum balance. Nationally, Bank of America has been testing accounts that charge $6 to $25 monthly, according to The Charlotte Observer.

Fortunately, you needn’t pay fees to get a good return on your shopping. The trick is to know the limitations when buying your way to a bigger nest egg. Here’s a brief list of considerations:

* How are rebates calculated? (Do certain categories pay more than others?)
* Are there limits to what you can earn? (How would you do in an average year?)
* What’s the interest rate? (How much will it cost if you slip up?)

The best brokerage cards combine a generous cash back yield with unlimited earnings potential. Does Fidelity’s Investment Rewards card, issued by American Express (AXP), measure up? That’s the question before us today in this ongoing series examining the best (and worst) credit card offers out there.

3 Important Details About the Fidelity Investment Rewards Card

Fidelity offers multiple cards to accountholders. There’s a Visa card on top of two other Amex options: one specifically geared for college earning, and another for retirement savings. The Investment Rewards card is the most flexible option. Here’s a closer look at the benefits and bugaboos:

1. A straight 2% back. Fidelity makes earnings simple with 2% cash back on all retail purchases. Like most retail cards, the program kicks off two points for every $1 spent. Reach 5,000 points and you become eligible to apply for a $50 cash rebate to the account of your choice.

2. Account flexibility. Fidelity allows cardholders to designate deposits automatically or choose where and when to transfer earnings. All Fidelity accounts are eligible. So if you earn, say, 10,000 points on $5,000 in quarterly spending — and you have both a Fidelity IRA and a 529 account for your child — you’re allowed to contribute all $100 to one, or split it any way you see fit. Just be sure your contributions don’t exceed state and federal limits.

3. Beware the balance transfer. Please don’t apply for this card with the intent of moving a balance from elsewhere. Yes, you do get seven billing cycles of 0% interest on a transfer, but the 4% fee you’ll pay on the transferred balance is simply too high. Nor will you earn points for handing Amex a nice new chunk of change.

Interestingly, you don’t have to use Investment Rewards to earn portfolio cash. Members may also select merchandise from the poorly rated WorldPoints catalog, or use points for booking travel. Forgo these options if you can. Rewards cards offer better travel options, while retail cards offer better deals for compulsive shoppers.

This Is the Right Card for You If …

Apply for this card if you’re already socking away cash for emergencies and have a brokerage account for saving for long-term needs such as education and retirement.
Earning interest and dividends on free cash will enhance your earnings power, and could bulk up your portfolio over time. You might even save enough to buy stock in a company with generous shareholder perks.

Regardless, it’s important to remember that Amex wouldn’t offer this card if it didn’t produce profits. A 2% kickback to your retirement account won’t mean much if you pay the card’s minimum 13.99% interest rate on a hefty balance.

What credit cards do you use? What is the best credit deal you’ve found? Please let us know using the comments box below.

Motley Fool contributor Tim Beyers didn’t own shares in any of the companies mentioned in this article at the time of publication. Check out Tim’s portfolio holdings and past columns. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of Charles Schwab and writing a covered strangle position in American Express.

Brokerage Credit Cards: Can You Shop Your Way to a Fatter Portfolio?

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