Watch Out for This Chip Card Scam

Make sure you don’t fall victim to this chip card scam

The country isCreditScam_Featured progressing quickly on the path to replacing magnetic strip swipe cards with new, more secure chip cards. The switch to chip cards marks an effort to improve security and prevent fraud and identity theft.

The move to embrace this technology, which is already the standard in many other countries, was partially motivated by the highly publicized security breaches at several major retailers over the past few years. While the move to chip cards will improve security overall, there are some scammers who are trying to take advantage of the temporary confusion during the switch.

Last October marked the deadline for retailers to update their point-of-sale systems so that they could read the new chip cards. Any retailers that didn’t meet that deadline were at risk of being held liable for fraudulent transactions that may have been prevented with the new chip card systems.

“The new cards provide more security because the microchip creates a unique code for each use to help authenticate a transaction,” according to Kathryn Vasel of CNN Money. “Older cards store that payment data in the magnetic strip on the back, which is easy to steal, replicate and put on fake cards.”

As retailers across the country switched over, financial institutions began sending out new cards. During this time, a new identity theft scam arose. The scammers pose as financial institutions and send emails in an attempt to collect valuable personal information. They sometimes ask people to confirm or provide updated personal information so that a new card can be sent.

Other times, they provide a link that they claim will take people to their financial institution’s website so they can start the process of getting a new card. Unfortunately, these sites are used to gather information that can be used for identity theft. Even if you don’t input any information, just clicking the link can cause problems.

“If you click on the link, you may unknowingly install malware on your device,” according to Colleen Tressler, a consumer education specialist with the Federal Trade Commission. “Malware programs can cause your device to crash, monitor your online activity, send spam, steal personal information and commit fraud.”

You can avoid these scams by keeping in mind that your financial institution will never ask you for personal information over email or the phone. If you receive a call asking for information, hang up and call back yourself, using the number provided on the back of your card. You may have to give your account number over the phone when you call, but since you typed in the number yourself, you know the correct people are hearing it.

Likewise, do not respond to emails with any personal information. If you think you may have a legitimate email from your financial institution, it is important to close the email and navigate to the financial institution’s website from a new browser. That way, you know you are going to the correct URL — one that you type in yourself — and not risking a link that redirects to a scammer’s site. You should also check that the website you are on is secure before putting in any information. If you can’t find the page that the link referred to, you can call your financial institution to confirm the email was legitimate before you use the link.

If you keep this information in mind and remember that it is always better to play it safe and take the extra step to ensure that your communications are with your actual financial institution, then you can stay safe from this chip card scam.

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EMV Credit Cards

Facts about the new trend in credit cards
If you’ve been lookingEMV_Featured_052615 into getting a new credit card lately, you may have heard the term EMV credit card and wondered what it meant. This new trend has been gaining popularity in the United States over the past few years, but it is already firmly established internationally. The following information can help you understand the basics of EMV credit cards and how they can benefit you.

EMV stands for Europay, MasterCard and Visa. They are sometimes known as chip-cards because a small metal square – the chip – is visible on the outside of the card. Although it is fairly new to the U.S., it is considered the global standard in security for credit cards around the world. The term refers both to the computer chip equipped credit cards and the technology that works with the cards to authenticate them. This advanced technology gives chip card transactions a higher level of security than traditional cards.

EMV cards have become more popular in the U.S. because of the highly public and damaging security breaches that have occurred in recent years. With hackers gaining access to tremendous credit card databases from businesses thought to be very secure, financial institutions and businesses knew that a change was necessary. Now, people using EMV chip cards have an added layer of security both in the U.S. and when traveling abroad.

Traditional credit cards have a magnetic strip that contains all of its important data. Hackers attempt to access that data to gain the information about both the card and the cardholder necessary to commit fraud. With this information, purchases can be made that make the data as valuable as cash to anyone who knows how to steal it. The information on the magnetic strip never changes, so it can be repeated many times on any number of purchases.

The reason why EMV cards are considered more secure is because the information contained on the chip is only useful for a single payment. Each time an EMV card is used to purchase something, a unique transaction code is created, and that code can’t be used again.

In order to keep up with this change, consumers will have to obtain these cards and learn the specific technique for using them. Businesses and financial institutions will also have to adjust by outfitting their facilities with new technology, including processing systems. They will also have to change policies to keep up with new liability regulations.

“EMV technology will not prevent data breaches from occurring, but it will make it much harder for criminals to successfully profit from what they steal,” states Sienna Kossman from

Fox Business spoke with several experts about this technology, including Julie Conroy, the research director at Aite Group.

“Experts hope it will help significantly reduce fraud in the U.S., which has doubled in the past seven years as criminals have shied away from countries that already have transitioned to EMV cards, Conroy says,” according to Fox Business.

The way that these cards are used is different from a magnetic strip card. It also takes longer for the data to be transmitted and the transaction to be authenticated.

“Instead of going to a register and swiping your card, you are going to do what is called ‘card dipping’ instead, which means inserting your card into a terminal slot and waiting for it to process,” stated Conroy.

A second method of using an EMV card makes use of near field communication (NFC). Cards equipped with NFC technology just need to be tapped against a scanner, which can read the data. This is similar to the system that many people are familiar with using on public transportation in the country’s major cities.

“Contactless transactions are more consumer-friendly because you just have to tap,” according to Martin Ferenczi, the president of EMV provider Oberthur Technologies. ”Around the world, there is a move to make EMV cards dual-interface, which means contact and contactless. However, in the U.S., most financial institutions are issuing contact cards.”

This is due to the fact that dual scanners are expensive, so businesses are waiting until EMV cards become more widespread.

Some cards are known as chip-and-PIN because they require a pin number to be entered, just like with a traditional debit card. There are also chip-and-signature cards, which will likely be more popular than the PIN variety in the coming years.

This new trend is a great thing for both consumers who want to keep their money safe and businesses that want to protect their customers and their reputation.

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Five Reasons to Avoid Retail Credit Cards

How good of a deal is a store credit card?
You’re at the checkout at yourAvoid Retail Credit Cards! favorite retail store, when suddenly you’re offered a 10 percent or 15 percent discount on what you’re buying in exchange for opening a store credit card. Sound familiar? If this has ever happened to you, then you might’ve been tempted by all the advantages the store will make it sound like the card will bring, such as promotions, discounts, as well as other perks.

While it may sound tempting, don’t be swayed. Yes, there can be many advantages of having a store card, but many times, there can be just as many drawbacks, too. Consider the following cons before signing up for a retail credit card:

1. Low limits
More often than not, retail credit cards start you out with a low credit limit (especially if your credit is poor). And if your limit is only $100 to $1,000, the purchases you make could easily put you at a higher credit utilization (your purchasing power amount) than what’s beneficial for your credit. So for example, if you have a credit utilization of more than 20 percent, a credit card with a $100 limit means you shouldn’t buy more than $20 worth of items — and that’s not very useful.

2. High interest rates
With rates usually around 20 to 30 percent, if you’re likely to revolve balances, it can become extremely pricey if you don’t pay off what you owe at the end of your grace period. In fact, in some cases, people end up paying double or more of their initial purchase. So even with that discount offered at the beginning of use, it still isn’t worth it financially.

“The key, as with any credit card, is to pay it off each month, so that interest rate is moot,” says Matt Schulz, senior industry analyst of

3. Negative credit score impact
This is especially true if you sign up for multiple retail cards.

“You’re going to see more than a 30 point ding if you start getting multiple cards,” says Andy Jolls, CEO of the credit educational site And closing recently opened accounts won’t necessarily make them disappear.

“That account will stay on your credit report for seven years. It doesn’t instantly go away when you close it,” explains Emily Peters, credit expert for In addition, applying for a new card also lowers the average age of your accounts, which can have an impact on your credit history’s length.

4. Spending temptation
“Once you sign up for a store card, you give the store free reign to bombard you with enticing ads and shopping promotions,” says Fatima Mehdikarimi, founder of So if you’re mulling over signing up for a retail card, consider your shopping habits. If you acquire a store coupon, do you typically have the urge to use it, even if it’s on something you might not have necessarily bought without it? If so, you’re probably better off not signing up. It’s also important to keep in mind that “many of these promotions and sales can simply be had by signing up for the store’s e-mail newsletter,” according to Mehdikarimi.

5. The terms aren’t spelled out up front
Usually, salespeople will offer you the credit card when you’re making a purchase, and that doesn’t give you a lot of time to think or go over a full explanation of the terms and conditions before you decide.

“Anytime that you’re making a decision without taking the time to read through the contracts and terms of service, it’s not (a good idea),” says Schulz. “It’s always best when you’re offered one of these cards to take a step back and think about it.” So walk away to give it a second thought before jumping into any rash decisions.

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Six Myths About Credit Cards

Credit cards can be an incredibly valuableshutterstock_64945411 part of your financial toolbox. With the amount of credit card advice offered on the Internet or by friends and family, it can be difficult to separate fact from reality. Suggestions about the best way to cook eggs so that the shells peel off easily or chop an onion without crying may contain more fiction than fact, but these innocent pieces of misinformation aren’t especially harmful. Credit card myths, on the other hand, can be damaging. Here are six credit card myths that you may have heard before and maybe even repeated. The corresponding facts will clear up the confusion:

1) Credit or Debit? It Doesn’t Matter
Unless you have a personal assistant who does all of your shopping, you are probably asked “Credit or debit?” several times a day. If you answer, “It doesn’t matter,” then you are perpetuating this first myth. Even if your credit card has the same logo as your debit card and you monitor them on the same site, they don’t do the same thing for your finances. Only purchases made on your credit card affect your credit score. If you use your credit card reliably and pay your bill responsibly each month, you will build credit, so stop to consider this next time you swipe your card. Your credit score can also be harmed if you do not use any credit at all.

2) You Need to Pay Only the Minimum Balance
A credit card statement lists several figures in summary of the previous month’s activity. These include the balance of the previous statement period, minimum amount due, APR and total available credit. Checking your statement online gives even more information, including current balance, current available credit and activity since the previous statement. With all these numbers to consider, you may zero in on the phrase “amount due” when you write your check or pay online. The minimum amount due is not the most important figure, however, because it is only the amount of money that you need to pay to avoid a late fee or other penalties. The total balance of the previous statement period is actually the complete amount owed. If you pay only the minimum balance, you will be charged interest on the remainder. This is how credit cards make money and why they typically suggest such low minimum balances.

Furthermore, if you avoid paying your full balance because you’ve heard that having a balance is better for your credit score, you are paying interest for no reason. MSN Money contributor Liz Weston clears up the confusion, stating that “your credit reports and scores don’t ‘know’ whether you’re carrying a balance or paying it off in full every month.”

3) You Should Always Pay Your Current Total Balance
If you have focused on the total balance of your online statement, you are in better shape than are those who pay only the minimum but don’t fully understand how much they owe. Paying off the full balance is important, but it is the full balance from the previous statement period that matters. The total balance includes both the previous statement balance and all activity since that statement. You will not be expected to repay those new charges, however, until they appear on your next statement. Paying just the previous statement balance and not the total balance will not hurt your credit or accrue interest.

4) There Is No Minimum Credit Card Purchase
If your desk drawers are full of packets of gum that you’ve grabbed in check-out aisles to bolster your bill to a minimum credit card purchase amount, you may be interested to know that this practice is not technically legal. Although not usually enforced by credit companies, there is no true minimum purchase necessary to use your credit card. Stores enforce this to offset the fee they pay on each purchase made with a credit card. If you are uncomfortable with this practice, you can seek out local businesses that do not enforce minimums or that charge a small fee for credit card transactions on small purchases, which is a more transparent policy.

5) Your Fixed Interest Rate Will Stay Fixed
If you have a fixed interest rate, you may think that the case is closed, but that is not so. In fact, you may find that your rate increases if you miss a monthly payment, fail to pay the full amount, transfer your balance to a new card or take a cash advance. Make sure to find out how much you will be penalized for these activities in order to decide if they are worth the price.

6) You Should Use All of Your Credit
Even though you are allowed a certain amount of credit, you do not have to use all of it. Yes, using little or no credit can negatively affect your credit score, but so can using all of your credit. Paul Sisolak of the website says that “creditors also make use of a term called ‘low utilization,’ which means that using a smaller amount of credit in your account looks better to the credit bureaus, and subsequently, your credit score.” Monitoring your credit score can help you determine if you are using an appropriate amount of your credit.

Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.