Skimming

Earlier this week, while watching the Today Show I heard a story about why it may not be as safe as you think to use your credit or debit card at a restaurant. Apparently, waiters have been known to take your card for payment and after swiping it through the register, they swipe it through a small device that then captures your 16-digit account number, expiration date, and name. They later download all of this information to a hotel key (which we all know is similar to a credit card). The interesting part is...who would notice this small device next to a restaurant register? Practically no one...with all the wires and chaos, no one is likely to wonder what this is or why it's there.

They skimmed the producer's credit card and then proceeded to shop at various retailers with no problems at all. Some stores did ask for ID, but the man presented his ID and credit card (which matched, of course) instead of the hotel key card he had just swiped with the producers information on it. So in essence, a thief would get away scott-free from a shopping spree with your credit or debit card. Interesting and scary, huh? Yeah...I thought so too.

So what can you do? The gentleman who was presenting the story advised against using your debit card while out at restaurants, gas stations, etc. since they offer you less protection in situations like this and the thief could drain all your money, leaving you with tons of overdraft fees and no money to pay your bills. Instead he suggested using a credit card, one with a low limit, say...$300-$500, that way if your information is stolen, the thief can only do so much damage and you have more protection through the credit card company.

Now I don't know about you...but that sure seems like a lot of work. Keeping your money safe is becoming more and more difficult. Maybe you could pay in cash as well...and gas stations are offering discounts for cash these days...well they were at least, I'm not sure now since gas prices have fallen so drastically. What else could be done in order to help alleviate skimming?

[image source]

Ways to Raise Your Credit Score

Recently, I received a letter that one of my cards was to be closed due to inactivity. I merely brushed this aside and figured, "I'll call them and request that it stay open and it'll be fine." Much to my dismay, when I called, the most likely minimum wage worker informed me that no matter what I did, the account could not be kept open due to the agency trying to close all dormant accounts. I was ticked, needless to say. Mostly because it was $8,000 worth of credit, and I felt that it would lower my credit score because it increases my debt/available credit ratio. I'm not so sure if it's calculated per card, or for all available credit. I'm thinking the latter, which is why I was so ticked off! GRRRR, it makes me angry to think about it!

Anyway, I ran across this tidbit on CNN Money and thought I'd list it here as well in order to keep that from happening to anyone else or me again for that matter. I'm also going to review my credit report and make sure I charge at least one small thing on my cards in order to keep them active.

• 35% Your payment history Pay your bills on time. Automating payments online can help.
• 30% How much you owe Keep balances on credit cards and other revolving accounts below
• 50% of your credit limit (lower is better).
• 15% Length of your credit history Rather than let old cards go dormant, charge a latte a month (then pay it off). No activity lowers your score.
• 10% Your new credit Don't open unnecessary new accounts. And if you're rate shopping for a mortgage or an auto loan, do it within two weeks; multiple requests could ding your score.
• 10% Your mix of loans You can't do much to change this (except get a credit card if you don't have one).

Bonus Request a free copy from each of the three major credit-reporting agencies at annualcreditreport.com. Then tell them about any mistakes you find that are not in your favor. --George Mannes