Want to brush up on credit best practices and keep your credit card debt in check? This Bankrate article from Mitch Strohm offers helpful tips for managing your plastic in 2016.
Make the switch to EMV. Card issuers have been rolling out EMV (Europay, MasterCard and Visa) chip cards to comply with the deadline for new rules and standards on fraud liability that went into effect in October. These new cards contain a computer chip, making it more difficult for fraudsters to counterfeit. You’ll see merchants and financial institutions adding new in-store technology to comply. Overall, it means better protection against fraud. If you haven’t yet received your new chip card, call your issuer and ask when you’ll be receiving it. The longer you continue using the old magnetic strip, the more vulnerable you are to fraud.
Be vigilant about fraud. Even if you’ve already received your EMV chip card, it’s still important to be careful when using your credit card and to be especially proactive about fraud. Many retailers have made the shift to EMV readers after the liability for card fraud shifted to them in October 2015. But numerous self-service payment terminals are still a target of fraudsters. For example, self-service gas pumps aren’t required to have EMV card-reading devices until October 2016 for MasterCard and October 2017 for Visa. That leaves an opening for skimmers – devices that can steal your credit card data.
Freeze your credit. Placing a freeze on your credit makes things a lot more difficult for identity theft. Creditors typically want to see your credit report before extending credit. And if there’s a freeze on it, they won’t be able to see your file. Therefore, they won’t approve credit, according to the Federal Trade Commission. It won’t affect your credit standing at all. You can place a freeze by contacting each of the 3 major credit bureaus: Equifax, Experian and TransUnion. You’ll need to provide your name, address, date of birth, Social Security number and other personal information. Expect to pay $5 to $10 per bureau, depending on where you live, the FTC says.
Pull your credit report and statements. Data breaches are on the rise. In 2014, nearly 20% of American households suffered a data breach, according to a report from the National Cyber Security Alliance and ESET, an antivirus and security software firm. That makes it very important to closely monitor your credit reports and statements for signs of fraud.
Get a family education on best practices. Credit card myths just won’t die. According to a recent Bankrate survey, 51% of Americans wrongfully believe that having accounts with high balances helps a credit score as long as those accounts are paid on time. That myth and others provide a great example of why it’s important that the entire family gets an education on responsible credit card use. It also pays to create a plan for when and where to use your credit cards. For instance, certain cards offer better perks at grocery and home improvement stores.
Start paying off your credit card debt. It’s one of the most effective ways to bump up your credit score. The “amounts owed” category contributes to 30% of your FICO score’s calculation, according to MyFico.com. Start by prioritizing your credit card payments, making larger payments on the card with the highest annual percentage rate. You also might want to consider opening a balance-transfer credit card, which allows you to move expensive debt over to a new card, with a low – often 0% – APR for a set time period. Just make sure to read the offer carefully.
