Credit Card Blog

Manila was tapped to be the pioneer market for the new Citi Mobile service, which allows mobile phone users to make purchases on their credit cards via text messaging or calls. Citi hopes that this new system will complement and, in some cases, replace the traditional card-swiping system.

Citi is marketing the new service to mobile phone users with busy lives. They encourage customers to call or text merchants through Citi Mobile when they need to send deliveries, pay bills, or load up on units for prepaid phones and Internet services. The purchases are then charged to the customer’s credit card.

This mobile banking system was launched in the Philippines because of the high volume of text messages Filipinos send each day. Some have called the Philippines the “Text Capital of the World”, and for good reason: Filipinos sent approximately 1.5 trillion text messages last year alone.

But markets all over the world will be watching to see how warmly Citi Mobile is received. If all goes well, you can bet Citi’s global offices will jump on the bandwagon and offer the service in other areas.

A home equity line of credit is a ‘revolving credit’, similar to a credit card in that you have a maximum limit that you are able to use, but that money can be used again as soon as it’s been paid off.  The major difference between a home equity line of credit and a credit card, however, is that home equity lines of credit are secured against your home.  If you fall too far behind on your payments, the lender can take possession of your home in order to recover the debt.

Previously, home equity lines of credit were made available with special checks that allow consumers to access the money when needed.  A check could be written and deposited into your checking account, or used to pay a vendor or when shopping at your favorite retailer.  More recently, many lenders have started providing the home equity line of credit on a credit card.

While having a card in your wallet that accesses your home equity line of credit is convenient - it can also be extremely tempting for many people.  If you take a HELOC to make improvements on your home, for example, and have more money than you need for the repairs, you may find yourself shopping for a new wardrobe with your HELOC credit card.  Think twice about doing this - is it really worth putting your home on the line for unnecessary purchases?

In India, mobile phone users are paying for purchases through their phones.  The phone number acts as the card number, with a lot of behind the scenes processing taking place to look up the real credit card information based on the user’s telephone number and initiate the payment to the retailer.  The retailer itself never actually has access to the credit card number.

Cell phone credit cards are actually available in the US, as well, although are extremely limited.  Trials are beginning with contactless payments, using cell phones, at many McDonald franchises, CVS pharmacies, and with American Express ExpressPay. 

Contactless payments may make you nervous, but you may already be using it in some form without even thinking about it.  Have you ever driven through a toll booth and watched the indicator light change from red to green without handing over cash?  You’ve just paid for your toll.  Ever pulled up to the gas pump and flashed your keychain at the light on the pump to fuel up?  You just paid for your gas. 

Most people don’t leave home without their cell phones.  Credit card companies and retailers picture higher spending when buying is as easy as showing your cell phone at the checkout line, rather than finding the credit card in your wallet and lining up the magnetic strip in the reader to initiate payment.

It used to be if you were pulled over for speeding or another traffic issue, the police officer would decide whether or not to issue you a traffic ticket based on your look of innocence.  Now, sitting on the passenger seat of many police officers nationwide is a laptop computer, connected to traffic ticket records.  The cop can see in seconds whether or not you’ve never had a ticket or if this is your 4th ticket in the last four months.

When the police officer decides your guilty and in need of a traffic ticket - he or she can print it from the printer in the car.  The data is electronically sent to the sherriff’s office, the court clerk, and the state at the push of a button.

While you used to have to appear in court or mail in a check to pay for your ticket fine, now you can make a phone call to the court clerk and give out your credit card number over the phone.  Currently, most county clerk’s are charging a 3.2% fee on the credit card payment, but there is talk about switching to a flat rate processing fee.

It’s believed that fines will be paid faster now that credit cards are being accepted at more government offices.

If your police department isn’t currently operating in this “high tech” manner, it won’t be long before they’re driving around with this equipment.Â

Credit card companies offer a variety of insurance options - the four main insurance coverages you can purchase from your credit card include disability, credit life insurance, property, and unemployment insurance.  The question remains- is it worth it to you to pay an extra few dollars each month to add these insurance policies to your credit cards?  Here is what each of the various insurance options cover:

Credit Life - If you die, your credit card balance will be paid off.  You purchase this insurance from the credit card company, and you also designate the beneficiary of the policy to be the credit card company.  If you should die, your policy kicks in and the money is no longer owed.

Disability - If you have credit disability insurance and you become medically disabled, the policy will make your minimum monthly payments for you.  Personally, I’m hesitant on the value of this insurance coverage because there are many concerns over what will be classified as a medical disability, the length of time your payments will be covered, and whether or not you can use the card if you’ve put in a claim for the disability insurance.  I would just be sure to look into all the details before deciding whether this coverage is worth it to you.  If you’re self employed, by the way, you probably won’t qualify at all.

Property- Credit property insurance is supposed to cancel the debt owed on items you bought using the credit card, if the items are later destroyed by specified events or situations listed in the policy coverage details.  There is no deductible when making a claim under credit property insurance, but I think the concern here is what types of events or situations qualify you to cash in on this policy.  Check into it carefully.

Unemployment- Involuntary unemployment insurance offered through credit cards which will make your monthly minimum credit card payment if you are laid off involuntarily.  Again- if you are self employed, you can’t put in a claim so don’t purchase this coverage!  Also, if you make purchases after you’ve been laid off, those items will not be covered under the policy.

It’s a common practice for gas stations to put up to a $50 hold on your credit card or debit card when you pay at the pump for your gasoline.  It’s also extremely common for a hotel to put a “hold” on funds for staying in their hotel.  They take your credit card or debit card during check in, so that they have it on file to cover any “incidentals”, like internet use, phone calls, movie rentals, or in-room bar use.  What you may not realize is they can put a hold on $50 to $200 a night or more.

People using credit cards are less likely to be effected by the hold - but if you are nearing your credit card limit and you attempt to use the card at a restaurant later, you could be denied.  If you try to avoid credit cards and rely on your debit card (linked to your checking account), you are of course limited to the amount of money you have in your account.  Most people would experience some financial difficulty if $200 was held/frozen from their checking account for several days.

When traveling, try to use a credit card to book the room and for the “incidentals” that you won’t be using for the rest of the trip.  If you don’t count on that card, you won’t have to worry about the “hold” the hotel puts on your money.  If you like to pay for gas at the pump with your debit card, just be prepared to deduct at least $50 from the account, regardless of what you actually put into your tank for a few days until the transaction clears and the appropriate amount is deducted from the account.

RedBox is like a gumball machine for DVD rentals.  It’s one of the newer inventions that allow people to rent a DVD for $1 a night.  They’re found inside grocery stores and other retail areas.  People who want to rent a movie simply swipe their credit card, make a selection and out comes the DVD.  You can also order your DVD online and pick it up at any RedBox location.  When you’re done with the movie, you just return it to any RedBox location- not necessarily the one you rented it from.

Recently, RedBox announced the discovery of an illegal credit card skimmer attached to one of their RedBox locations, as well as several other locations that appeared to show attempts of skimming.  The skimmer is a unit that a criminal has installed so that when a consumer swipes their credit card, the card details are transmitted not only to the company you are making a purchase from; but also to the criminal who has intercepted the card details.  The skimmer on the RedBox found was immediately removed and reported on the RedBox company website so that individuals could check their records and make sure they hadn’t been victimized.

While super convenient, our credit card security is still a little less secure than we’d like for things like vending machine credit card acceptance.  If you use RedBox, here are the reported locations of the skimming and attempted skimmings:

- 1101 South Rural Road, Tempe, AZ (device removed before retrieval by perpetrator)
- 1620 El Paseo Road, Las Cruces, NM (evidence of skimming attempt)
- 2330 East Lohman Avenue, Las Cruces, NM (evidence of skimming attempt)

Boing Boing TV recently demonstrated how easy it is to buy an $8 device off eBay that will decrypt credit card numbers off of RFID credit cards — which are supposed to be more secure! The irony is it’s even easier now to steal credit card numbers and head right back to eBay for more shopping.

But there is a way you can protect your “butt,” a stainless steel wallet will “foil” any would-be credit card thief.

Meta Payment Systems (MPS) has recently introduced the iAdvance Line of Credit.  For all purposes; the advance is similar to a payday loan.  The difference is, consumers gain access to the small loans through a prepaid credit card.  iAdvance deposits money on the prepaid credit card and the consumer can then use it to pay for whatever they choose.

The idea is that the advance helps Americans who are not able to get conventional bank loans.  There is no credit check for a consumer looking to borrow money through iAdvance and it takes about two minutes to enroll, with the advance completed in a few seconds via telephone or internet.  Funds are made available immediately on the prepaid card.

Most non-bank loan products do not report the activity to credit bureaus, and therefore do nothing to assist a customer with establishing or rebuilding their credit.  iAdvance will report the activity and payment history, which can help strengthen consumer credit reports (if they pay the advance back on time).

“iAdvance offers a credit alternative that prevents underserved consumers from falling into a debt treadmill by borrowing from non-bank lenders,” says Trent Sorbe, Senior Vice President of Credit at MPS.

There has been much talk about card security in recent days. High tech thieves are becoming bolder and more determined to steal and exploit your financial information. With this in mind, VeriSign and Innovative Card Technologies have joined forces to bring us the InCard. InCards come with a tiny LCD in the upper right corner. When a button is pushed on the back of the card, the LCD reveals a unique PIN that is only good for a limited amount of time.

Online shoppers particularly like this card because they can generate a new one-use authentication number right before their transactions, then forget about it. The number won’t be valid long enough for thieves to put it to use. When it’s time to make another purchase or do some online banking, customers need only generate a new number. This additional layer of security prevents thieves from ever seeing customer’s real credit card numbers. Online merchants can rest easier about accepting cards with built-in one-time-password technology.

It’s good to know that card security technology is staying competitive with criminal minds.