Ask Money Doctor
By: Dan Merrick
Recently my
18 year old daughter started in college. The credit card offers started coming
in like the pill to cure her money ills. She reviewed a few and came to dad for
advice. Once she and I selected one with the lowest interest available, it was
not long before she had her first credit card.
Now it was
time for her to add that all important security information. Here are the tips
for security I gave her which might help you in preventing identity theft and
scams on credit lines:
Use a
security word on the account. Most credit card companies ask for mothers maiden
names. Don’t use maiden names. A genealogy search online can tell everyone your
mothers maiden name. Use a made-up word that will be easy for you to remember.
I try to create one from several combinations of unrelated words that only mean
something to me.
Use
paperless billing. Paper bills can be viewed if discarded in the trash. If you
use paper billing get a shredder or burn the statements once you are done with
them. Online web billing is encrypted and is actually more secure.
Use credit
for minor purchases only. To best manage credit when it is new, you will gain
better credit scores by paying off the balance each month. Staying within your
means when purchasing can help you gain discipline for later in life when
making larger purchases such as a house.
Guard your
card when using it. Keep a thumb over your credit card numbers when you take it
out to make an in store purchases. Prying eyes of thief’s are lurking
everywhere. Covering your numbers or turning to block others view of your
information is an added security level that is more effective than you might
think.
Avoid ATM
and cash advances. The interest rates on cash advances are to large and ATM’s
are not very secure. Credit card companies love you to use them because they
make tons on what you pay back in higher interest for cash advances. Use the
card to make the purchase instead. The interest will be lower and you can avoid
risks that using an ATM can create.
Shop
online. Online shopping is actually more secure because no one can see your
credit information but you and the credit card company. With 128 bit encryption
online purchases from home are a better way to enjoy shopping and avoid
exposing your credit information to strangers. Insure that you close your
browser after each purchase and empty your cache of any encrypted information.
Save copies
of credit cards in a home safe. Copy both the back and front of your cards and
keep them in a safe at home. Should your card be lost or stolen, you can use
your backup copy to contact the bank or credit card company with the
information.
Use check
cards instead of credit. Bank account check cards are a great way to keep
accurate records of your purchases for budgeting. Having ready receipts in the
form of a bank statement can be convenient at tax time also.
Get a fraud
insurance policy. Many credit reporting bureaus have identity theft policies
and credit card protection insurance. The added protection can be worth it if
you become a victim of credit crime.
Download
your online statements. Many credit card companies have online downloading of
monthly statements in MS Money or Quicken formats. This can help you to keep
accurate records for budgeting and taxes.
Dan Merrick
is the CFO of RDJC, Inc. and the author of ‘Instructions To
Money’ From Welfare To Millionaire published by Outskirts Press. If you
have a question for Dan about your business or money you can write:’ Ask Money
Doctor’ 125 W. Main Smethport, Pa 16749 or you can go to his web site and post
your question on the message board. The ideas expressed in ‘Ask Money Doctor’ are
for personal informational and resource purposes. For professional investing
suited to your financial needs the advice of a competent licensed broker, tax
consultant, CPA, or advisor is recommended.