Credit cards are a common financial accessory that people use for their day to day transactions. So it is important that we protect our credit cards. As information technology is booming, scammers are taking advantage of it and are fraudulently stealing credit card numbers. As a result, credit card frauds are leaving people distressed and pushing them towards a severe financial crisis.

Credit cards come with a lot of utilities. But if they are stolen or forged, it takes a heavy toll on your finances. In the U.S. you will find various credit card debt management or consolidation plans. However consolidating debts could ruin your credit score as well. There are many consolidation firms that mislead people with their flashy adverts and a false promise. Confide into them only when you have cross-checked their goodwill. One reason why these credit card frauds are increasing is losing your cards or leaving your receipt after shopping or making any other transactions. This allows credit card fraudsters to access your card numbers. Here are some tips for you for not getting into the trap of fraudsters:

• Make sure you check your monthly statements and evaluate them. You can also use the direct bill payment system through your credit cards to avoid frauds.
• It is very important to protect your Personal Identification Number (PIN) if your card has an access to an Automated Banking Machine.
• Make sure you dispose of all your unwanted cards and destroy them as well.
• In case your card is stolen, report it immediately. Card frauds take place within a few hours after the theft.
• If you suspect a fraud, report it to your credit card company.
• Ensure that your card has security features such as signature panel, hologram, magnetic stripe and embossing.
• Never sign a credit or debit receipt without an amount. If you find blank spaces, mark X or draw a lime across the space.
• You can also go for a registration service. You will have to pay a small fee to manage your credit cards. In case you lose your cards or they get stolen, the service will report this loss and request for new credit cards.

Fraudsters often get access to your credit card from various fraud companies. So never give out your account details to a company who has called you. You can check out the reputation of a company at your local consumer protection office or Better Business Bureau. The moment you lose your credit card report it. Remember that you can never be made liable for any unauthorized charges.

The FTC works for the consumer to prevent credit card frauds and other criminal practices. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

The holiday hangover is not over yet – most of us still have a stack of holiday shopping bills piled up on our coffee tables or desks to deal with. In a recent post, we addressed one way people can rebound from the holidays and start anew this year, but just like any hangover, the ultimate cure involves more than just one simple trick.

Let’s take a look at some reasons why shoppers often end up with a massive debt headache and arm you with some simple but effective money-saving tips that will help you stick to your budget and avoid the infamous holiday shopping hangover.

The Cause

During the holiday season, shoppers are often rushed to check off all the items on their list and will forgo some of the easiest ways to save money such as checking out competitive prices or using coupons. As they get caught up in the holiday buying frenzy, many are forced to make impulsive purchases while last-minute shopping at stores, instead of researching different options online. The holiday rush causes consumers to forget how much they are spending and rack up massive credit card debt, which has shoppers making New Year’s spending resolutions they know they’ll never keep.

The Cure

Instead of making all those impossible resolutions, we’re going to let you all in on a little secret that will leave you debt-free after every holiday shopping season: you never have to pay full price for anything again! As a result of the recession, more retailers than ever are giving you the chance to save money via online coupon codes and deals. It’s simple, just follow these rules:

1. Go Online: Stop printing and start clicking! If you come across an invalid coupon, it’s easier to find a replacement when you’re shopping online rather than when you’re at a store.
2. Think Outside the Grocery Cart: Step away from the idea that coupons should only be used to buy groceries. There are coupon codes for almost every item that you can buy online – from magazine subscriptions to electronics and flowers.
3. Time it Right: The best online deals are offered three times a month: the very beginning, the very middle and the very end. Online stores post fresh coupons the 1st-3rd of the month, the 14-16th, and the 28th through the end of the month.
4. Avoid Shared Coupons: Avoid using sites that let users post coupons because the likelihood they will be faulty or expired is much higher. Instead use sites which ONLY post coupons that are approved by the retailer.

Coupon Craze is an online coupon code and deal site that will help you follow these coupon commandments. Like we said last time, if you’re hungover, you take aspirin, have a greasy breakfast, get hydrated and sometimes swear that you’ll never do that again! Treat a financial hangover the same way. Create a budget and then stick to it by using online coupons.

Are you ready to make online coupons a part of your shopping routine? Let us know!

About the Author

Christian Gordun is the founder and CEO of Coupon Craze, a free consumer resource with online coupon codes and deals from over 10,000 retailers. He founded the company in 2000 as a hobby, and prior to taking it on fulltime, spent five years as a senior programmer and technical project manager. He received his master’s degree from London Business School in 2008.

Often, the cheer of the holiday season can be all consuming and shoppers forget that unlike Santa, their budgets are real. The exhilarating high of making a memorable December is quickly forgotten when the next year’s financial hangover settles into our banking accounts.

So what can you do to rebound from the holidays and start anew this year?

This post will provide suggestions to those relying on credit to create a budgeting plan. We’ll begin by taking a look at one potential cause for a financial hangover, and then discuss how to start a credit budgeting plan to alleviate and prevent future financial hangovers.

The Cause

One catalyst for a financial hangover takes the form of credit purchases. Evaluating the total price paid for credit purchases is an area that people often neglect when using plastic. If you don’t pay off your credit card bills in full every month, then you are financing your purchases and need to add in the interest costs to your budget. Budgeting credit purchases based solely on the price paid during checkout can put you in a difficult financial position.

The Cure

If you are a person that relies on credit, you should plan a 2010 credit budget. To create a successful plan, it is imperative that you take the time to research total purchase cost, which includes the retail price plus interest accrued over time. To avoid creating “perma-debt” this credit budget must outline both the total cost of your purchases and how long it will take you to pay off the debt. Before you decide to make a credit purchase, follow these steps:

1. Tally the retail price of your purchases – “The retail cost of this purchase is $219.99”
2. Target a date to pay off your debt = “Based on my budget, I can pay this off in four months”
3. Estimate your total cost plus interest

Of course your total credit card payment will depend on your particular card and the balance you currently have on your card.  But you can estimate your real purchase price with interest to make an informed decision.  Try a loan calculator at a site like Bankrate.com.  After all a credit card line is a form of a loan.  Note that many calculators list the length of time in years. If you plan on paying off the loan in less than 12 months you’ll need to convert it to a fraction of a year (4 months divided by 12 months =.33)

Using the Bankrate.com loan calculator, the total cost to pay for this purchase over four months with a 14.9% interest rate is $226.81 broken into four monthly payments of $57.27.

Making good spending decisions depends on having the right information. By creating a credit budgeting plan, you’ll have complete transparency regarding the total cost of using credit and know exactly when you’ll have a zero balance.

Unfortunately, being able to calculate your total cost plus interest may not always be convenient when shopping. One avenue where you may find a better deal is by researching retailers with alternative payment plans, such as Gettington.com, that provide a choice of payment plans along with a clear breakdown of a total purchase cost and interest paid before you make a purchase.  Transparency in understanding your total cost before you make your purchase enables you to make better budget decisions.

Remember: if you’re hungover, you take aspirin, have a greasy breakfast, get hydrated and sometimes swear that you’ll never do that again! Treat a financial hangover the same way. By creating a credit budget and researching the Web, you’ll be on the road to recovery and well-equipped to avoid future credit headaches.

How do you plan to budget credit purchases in 2010?

About the Author

Paula Drum is General Manager of Gettington.com, an e-commerce retailer that provides three payment options to help customers budget purchases that fit their individual financial needs.

FICO’s survey also found:

• Women were twice as likely (than men) to choose “a good FICO score” as the most important characteristic in a date while men are six times as likely to choose “good looking” as the most important characteristic in a date. Having an excellent FICO score ranked third – which topped being “rich,” “good looking” and “having great teeth” by both the men and women.
• 20 percent of couples described their partners’ spending habits as “drastically different” from their own and over 45 percent described them as moderately different. (Only 20 percent of couples rated each others’ spending habits the same.)
• Please see the complete survey results and downloadable images, here.

With survey findings like these facing Valentine’s Day, FICO’s Credit Cupid has solutions which will help your FICO scores in tip-top shape, see below:

1)     Maintain a good history of paying bills on time. Payment history is the most important component of your FICO score. People with a long history of paying their bills on time, are expected by lenders to continue their good payment pattern, and will be more willing to extend credit in the future.

2)     Encourage good spending habits from your partner. Everyone has their own credit report and FICO score; when couples begin applying for credit together their shared accounts affect both FICO scores.  This is why it’s doubly important to pay on time when you’re responsible for a shared account.

3)     Don’t overspend on your lover.  While it’s easy to get caught up in buying gifts for your sweetheart, spend within your means. If you have a lot of debt, adding more debt or maxing out your credit cards can hurt your FICO score – and potentially your relationship.

4)     Don’t apply for credit you don’t need. Your FICO score not only considers the existing credit accounts on your credit report, but also applications for new credit. Applying for many new accounts in a short amount of time can be a sign of looming financial problems, which can hurt your FICO score.

5)     Discuss finances with your partner. Your partner’s financial burdens can ultimately affect your credit if you feel compelled to help out with their debts and obligations. Have an honest financial discussion early and avoid surprises later!

If you would like to learn more about the survey or how FICO can help keep you in top credit shape, please visit myFICO.com.

Seven Resolutions to Begin in 2010

1. Control spending: If you spend less you'll have more money available to pay down debt and save for the future. Write down your expenses for a month to see where your money is going. You might be surprised by how easy it is to find places to scale back.
2. Create a debt repayment plan: If you carry credit card debt, write down everything you owe and make a plan to pay it off. Start with small items you can act on right away–it will make tackling the bigger debt easier. Also, try buying with cash only. It’s a sure-fire way to prevent increases in your credit card debt.
3. Set up auto-savings plans: Arrange with your bank or another financial institution to have a set amount deducted from your checking account to a savings account each pay period. Of the Americans who have been able to contribute to emergency savings funds, automatic withdrawal is the most popular method, according to the Consumer Federation of America.
4. Boost retirement savings: If your employer offers a 401(k) plan, increase your contributions. If you don't have an employer plan, open an Individual Retirement Account (IRA) and arrange for contributions to be made automatically from your checking or savings account.
5. Create a long-term plan: Write a list of your long-term goals, such as buying a home or saving for college or retirement. Visit the Life Events section of Smart About Money for concrete tips on accomplishing those goals.
6. Protect Yourself: Be prepared for the unexpected by making sure you, your family, your assets and investments are insured and fully covered. If you do not have a will, make 2010 the year you establish a life plan.
7. Find a financial buddy: Share your financial resolutions with a friend, colleague, or family member, and you’ll be more likely to keep them. Find someone else who wants to turn around their debt or cut their spending, and establish a mutual support system.

Tackling the Little Things

Getting debt under control and improving savings habits are two big steps to a better financial life, but those actions only are possible if Americans have more specific aspects of their financial lives under control.

While the economy recovers, job stability remains a vast and very valid concern. Without income, saving stops and debt can spiral. Even if they still have a job, Americans need to assess their marketability and increase their professional value by networking and upgrading job skills.

If someone experiences a job loss, it’s important to be proactive. They should negotiate severance pay, file for unemployment benefits and look into alternative insurance plans, because living unprotected will risk their family’s security. Individuals who have lost their jobs also should immediately start looking for work. Most states allow people to work a certain number of hours, and earn up to half their previous income, and still retain unemployment benefits.

Those who are struggling financially also might find it difficult to pay their mortgage. If individuals have missed a payment, they should immediately search through financial records or identify spending habits to find out what caused the missed payment. They also should contact their lender, who is required to examine their client’s financial life before taking any drastic action against the client’s home.

Even without a job loss or mortgage trouble, it’s time for Americans to involve their entire family in assessing the household budget. Tracking spending for a month will reveal some easy places to cut back without causing any significant lifestyle changes. Turning off lights and appliances, cutting down on weekend trips and dinners out and eliminating habits such as smoking all will help reduce household spending. And, it will give the family a head start on saving in case of emergencies.

For Americans to recover, maintain or rebuild their financial lives after this recession, they need to make permanent changes so they’re prepared for any future trouble in the economy. Identifying areas in which they are struggling, scrutinizing bills and spending habits and prioritizing aspects of their financial lives will help individuals create a proactive financial plan to last the whole year, and beyond.

Next Up: Seven Resolutions

The Best Recovery for a Financial Hangover

Resolutions Can Provide Rebound in 2010

For most Americans, the New Year is a time for resolutions. Resolving to become a better person is admirable. But as we emerge from the recession, from which some of us are still reeling, it's time for changes in financial habits that are permanent and have more staying power than the average beginning-of-the-year promises.

Before the recession, spending and consumption were the way of life in America. But during more recent, leaner times, we have been forced to face the damage done by unabashed spending and financing "the good life" with high-interest credit cards. And the damage remains.

“During this recession, all of us learned something about credit, debt and how and for what reason we spend money,” says National Endowment for Financial Education^® (NEFE^®) president and CEO, Ted Beck. “It would be a shame if we go back to our old ways of accumulating mountains of debt and saving little if any for our futures as things get better.”

As the economy continues to rebound in 2010, it may be tempting for Americans to ebb into the bad habits that led so many of them into financial trouble. That’s why in 2010, it’s important to evaluate your financial life and take steps to be better prepared should the economy once again fall flat.

Managing Debt

First things first, 2010 will mean significant changes in the way credit cards are provided by banks and accessed by consumers.

The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 gives consumers more control over their relationships with credit card providers. As part of the CARD Act, back in August, credit card companies were required to provide consumers with 45 days’ notice before increasing rates or changing any significant terms of the credit agreement and to mail statements at least 21 days before payment is due.

These changes will help Americans to start paying off their average $8,000 in credit card debt, or $5,612 per card, according to the credit-reporting agency, TransUnion. However, more diligence on the behalf of consumers is necessary to get the most out of the legislative changes.

"[The CARD Act legislation] will level the playing field between the credit card companies and the consumer to have a real fair shot at planning and taking action on their personal finances,” says Brent Neiser, CFP^®, and NEFE director of Strategic Programs and Alliances. “Consumers will have to be proactive though to get the full benefits of the CARD legislation. This means being diligent with reading and fully understanding all correspondence that is sent from your financial institution.”

On February 22, new rules will kick in including: a ban on retroactive rate increases on existing balances, except in cases of severe default; better disclosure in credit card terms so consumers can easily understand the contract and avoid unnecessary costs; and protections for college students and marketing done on campuses. For more information, visit here.

Next up: Changing the Way We Save

Control spending: If you spend less you'll have more money available to pay down debt and save for the future. Write down your expenses for a month to see where your money is going. You might be surprised by how easy it is to find places to scale back.

Create a debt repayment plan: If you carry credit card debt, write down everything you owe and make a plan to pay it off. Start with small items you can act on right away–it will make tackling the bigger debt easier. Also, try buying with cash only. It’s a sure-fire way to prevent increases in your credit card debt.

Set up auto-savings plans: Arrange with your bank or another financial institution to have a set amount deducted from your checking account to a savings account each pay period. Of the Americans who have been able to contribute to emergency savings funds, automatic withdrawal is the most popular method, according to the Consumer Federation of America.

Boost retirement savings: If your employer offers a 401(k) plan, increase your contributions. If you don't have an employer plan, open an Individual Retirement Account (IRA) and arrange for contributions to be made automatically from your checking or savings account.

Create a long-term plan: Write a list of your long-term goals, such as buying a home or saving for college or retirement. Visit the Life Events section of Smart About Money for concrete tips on accomplishing those goals.

Protect Yourself: Be prepared for the unexpected by making sure you, your family, your assets and investments are insured and fully covered. If you do not have a will, make 2010 the year you establish a life plan.

Find a financial buddy: Share your financial resolutions with a friend, colleague, or family member, and you’ll be more likely to keep them. Find someone else who wants to turn around their debt or cut their spending, and establish a mutual support system.

NEFE operates the site Smart About Money and have developed a series of articles filled with tips to help you make 2010 the year of financial freedom.  You can also find Economic Survival Tips, worksheets and articles focused on financial education related to housing, spending, credit and job change. Follow NEFE on Twitter at @nefe_org.

Ah, the holidays. A time for generosity, tidings of joy… and lots of spending. In these last days of holiday shopping, ask yourself if these actions apply to you. If they do, it could be affecting your credit score:

Number One: Use of store credit cards. Store credit cards can be enticing – 20% off here, $100 off there. In fact, the New York Times just wrote a lengthy story detailing the in’s and out’s of store credit cards. But buyer beware – they can have sky-high interest rates, and, opening any new line of credit will almost certainly lower your FICO score immediately. To make matters worse, many of these credit cards have very low credit limits – $500 in some cases. If you spend even as little as $250, this will change your utilization rate – or the ratio of outstanding balances to your credit limit – which should be kept as low as possible (usually 30% utilization is recommended). The lower your utilization, the better your score will be.

Say you open a store card with a credit limit of $500 and you spend $250 on pajamas and t-shirts for Jimmy and Janelle: that card would right away have a 50% utilization rate, which could impact your score. Cardholders can also understand the factors that affect their credit score and learn how to improve it using the FICO simulator tool to make sure they are spending responsibly.

Second issue: closing a card. As we get ready for the New Year, we think more about New Year’s resolutions, and, inevitably, finances. A recent FICO survey found that 40% of Americans see credit card debt as their biggest worry heading into 2010. Although it’s great that we all are being a little more careful this year — the survey also found that three out of four consumers are planning to reduce or not use credit this year to pay for holiday gifts and expenses – we could see a push among consumers to close secondary credit accounts, which is another way to change their proportion of available credit and hurt their credit score. Consider this:

Say you have 3 credit cards. Credit card 1 has a $500 balance and a $2000 credit limit. Credit card 2 is an unused card with a zero balance and a $3000 limit. Credit card 3 has a $1,500 balance and a $1,500 limit. In this scenario your credit utilization ratio looks like this:

•    Total balances = $2,000 ($500 + $1,500)
•    Total available credit = $6,500 ($2,000 + $3,000 + $1,500)
•    Credit utilization ratio = 30% (2,000 divided by 6,500)

Now, if you decide to close credit card 2 because it's an old card that you never use, your credit utilization ratio looks like this:

•    Total balances = $2,000 ($500 + $1,500)
•    Total available credit = $3,500 ($2,000 + $1,500)
•    Credit utilization ratio = 57% (2,000 divided by 3,500)

You can see that your utilization ratio rose from 30% to 57% by closing the unused credit card. If you’re paying bills and get your finances in order before the holidays and want to see what will happen to your score if you close that unwanted credit card, FICO’s cheap credit simulator that I mentioned before can help with this, too, that can tell you the estimated range your score will change based on certain actions. Go to www.myfico.com – and better yet – enter MYFICO HOLIDAY and get 30% off.

For additional tips on this topic check out the myFICO forum:  http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=196197
 

Here are some fail-safe tips from FICO Credit Guru Shon Dellinger to help enthusiastic shoppers stay financially sound:

1. Be Smart with Credit. Using a credit card is ok – experts agree having 3-5 credit cards helps your credit, if used responsibly. But carrying a balance on your credit card leaves you (1) stuck paying interest that could cost you, in some cases, double or triple the cost of those gifts in the long run and (2) with a much lower credit score, which could jack up interest rates on your credit cards and jeopardize your chance of getting lines of credit elsewhere (buying a house, a car, etc.). Services like FICO Score Watch combat this by providing emails or texts alerting you to any changes in your FICO score (either positive or negative), and notifying you when you’ve qualified for a better interest rate. A credit score increase of 30 points will save the average consumer $105 per year.

For more information on FICO Score Watch, go to: www.myfico.com/Products/ScoreWatch/Description.aspx.

2. Resist “Short Savings.” The salesperson at your favorite department store offers you an instant 20% savings just for opening up a credit card in their name. While that $20 seems tempting at the time, it can quickly put you in debt if you’re not careful. The temptation of the deal is also one reason why the average consumer has a total of 13 credit cards. Opening new lines of credit can also hurt your credit score, so make sure the card meets your overall needs and not just your desire for quick savings.

3. Don’t Wait Till April! Many holiday shoppers use their Tax refund to pay off credit card balances left over from the holidays, which can be incredibly expensive, not to mention detrimental to your credit standing. A credit card balance of $500 dollars from January until April will cost you $237 dollars based on today’s average credit card interest rate.

4. Get Info on Your Credit. Go to the myFICO Forums, where you can connect with thousands of other people all in your same boat. Don’t wait til after the holidays, when the damage is done. FICO is offering 30% off all products on its web site if you enter the discount code MYFICO HOLIDAY.