A Retailer's Guide To Credit Card Fraud Prevention

Identity theft is one of the hottest topics around. But who are the real victims here? Of course consumers are affected the most. While consumers are usually not liable for fraudulent charges, it can take years to come back from identity theft, and it's no small task. Consumer victims may get hit with higher interest rates or even be denied credit. Credit card companies would have you believe they are the biggest victims. To a certain extent, that's true. If you're looking at pure numbers, they are losing the most money. But credit card companies are recouping their losses through higher interest rates and fees. And they also pass the buck to retailers who accept fraudulent credit cards. Credit card chargebacks can completely wipe out your profits. What can you do to protect your business and your profits?

The first thing your cashiers should look at is the front of the card. Most credit cards have holographic images on the front. Cashiers should also check to make sure the embossed numbers haven't been altered. Fraudsters will sometimes use a clothes iron to remove some of the numbers and then emboss new numbers on the card. Then they'll deface the magnetic strip so it won't swipe. That forces the cashier to manually enter the numbers on the card. If the card won't swipe for any reason, make sure your cashier gets an impression of the card, and that the impression is legible. This will serve as proof that the card was physically present in case there is a chargeback. If your register does not automatically call for verification, make sure the cashier does.

The next thing a cashier should do is check the back of the card. The signature strip should have multiple colors and/or the name of the credit card company. Fraudsters have been known to remove a signature strip or cover it with Wite Out® and sign the cardholder's name. Speaking of signatures, cashiers should always match the signature on the back of the card with the customer's signature on the charge slip. This can be done while the customer is signing, to prevent the appearance of distrust. Now if the signatures don't match, it is perfectly acceptable to ask for a picture ID. What if there's no signature? Technically, the credit card is not valid unless it is signed. It says so right on the back of the card. Most credit card companies suggest that you require a picture ID rather than denying the transaction. If a customer doesn't want to show his ID, then you have a decision to make. Are you willing to risk a chargeback? If it's a large transaction, it's probably not a good idea. You may decide to let smaller transactions slide in the interest of customer satisfaction. The last thing a cashier should do before handing the card back is to make sure that the card number on the receipt matches the number on the card. It's not too difficult to reprogram a magnetic strip with a stolen credit card number.

Most of your credit card transactions will go smoothly. If a customer hasn't signed the credit card, make it less awkward by suggesting she sign the card and also put “Check For ID” on the signature strip. Explain that if she loses the card, someone could sign her name and then the signatures would match. And explain that you are trying to protect her. Most customers will appreciate this.

Protecting your business from chargebacks is very simple. Checking the front and back of the card and verifying signature only takes a few seconds. Make it an expectation for your employees, and follow up with them to make sure they are doing their part. Involve your customers by providing tips to help them prevent fraud. Then you can enjoy your profits without the fear of chargebacks.

Know The Credit Card Company's Secrets!

Nowadays, almost everyone can get a credit card. Most people get offerings in the mail to apply for them all of the time! Many of these credit cards have very low introductory rates, but then shoot up later, often without you even realizing it! After all, who is going to read all of the fine print on the back of the application? Not many people! In a way, it almost seems deceiving.

The most favorable credit card rates can be found in mid-size regional banks. If a person has a decent credit card history, he or she can apply for a "better rate" card - even if the bank is out of state. They won't come to you though; you have to go to them to apply.

Start by looking at the mid-size banks in your area. If their rates are all too high, you can explore other banks in other low interest states. To find these states you can go to your bank and check out the "American Financial Services Association's Annual Summary of State Consumer Credit Laws and Rates". Or you can go online to explore. One thing to keep in mind when doing your research for low interest states; don't assume that every bank in these states will give you a low credit card rate. Sometimes banks will move their credit card operations to higher rate states that have less restrictive interest regulations. Make sure you find out the credit card rates after you've located a lower rate bank!

Another "secret" that the credit card people don't want you to know is that many of the high-fee, high interest banks try to entice and sign up potential credit card holders by offering special credit card enhancements. These extra services can be almost anything; ranging from insurance and catalog shopping discounts to travel services and rental car discounts. They will also offer "deals" on anything that you can think of, from new cars to pest control!

The reality of these offerings is that you can find just as good or better prices in the city where you live. People living in rural areas might like the idea. But these folks generally can drive to the nearest large city, or shop online for the same savings. These credit card enhancements are usually not worthwhile, and you're still paying those high interest rates!

Remember when using your credit card, that the costliest cash is when you use your card for a cash advance. You will get no "float" or grace period (during which your cash advance or loan is effectively interest-free), and an extra fee will be tacked on to your usual interest charge! If you really need the money it would be cheaper in the long run to take out a collateralized bank loan, even if it will probably be more trouble to arrange.

Use these tips to look around for a lower interest rate credit card from a low interest bank. Don't just sign up for any credit card, especially from the offers you receive in the mail, without first learning what the interest rates will be. If you are careful, and shop around, you should be able to secure a credit card with a rate that you can live with.

Premium Credit Cards: Are They Worth Having?

The minimum income requirement for gold credit cards is usually set at between $35,000 and $48,000 per annum. However, if you have a good credit track record with your bank, it might offer you an upgrade from your classic card without such proof of income.

On the downside, its annual fee might be double that of your classic card. So, should you pay the extra amount? What are the benefits involved?

Based on a survey of gold credit cards in the market, color aside, gold cards are not very different from their classic or silver counterparts. The primary difference is in terms of the insurance coverage that you are given; you could get two or three times the coverage for flight, travel accident and purchase protection policies. Other advertised benefits include road-assist services like emergency towing.

Many of the extra benefits attached to gold cards are travel-related. Commission-free travelers' checks are quite popular, as are emergency assistance services, such as medical and legal aid, while traveling abroad. MasterCard gold cardholders, for instance, have additional access to MasterAssist Travel Assistance Services while Visa gold cardholders enjoy worldwide Visa Emergency Travel Assistance. Ask yourself; how much more are you going to be paying in terms of annual fee; and will you use the extra benefits? Do you travel often?

You should also analyze your spending pattern. Some reward programs offer gifts that are exclusive to gold or platinum cardholders. However, the points required to redeem these rewards tend to start from six figures.

So, if you don't use your credit card that much, you would not be able to obtain these gifts. Of course, if the gold card is free (many banks now offer fee waivers) and waved enticingly in front of you, the extra benefits don't hurt.

If you don't want to be bothered with redeeming stuff from a catalogue and prefer plain old cash, look for a high cash-back rate with lots of flexibility and few terms attached. Don't be tricked by the ads that say 'up to 2% or 3% cash-back'; the key phrase is 'up to'. Most times, these attractive rates only apply if you have a four-figure outstanding balance to begin with.

However, if you are going to rely on the services touted as extra benefits, it is important to read the fine print. Although one card says it offers its gold cardholders emergency roadside assistance, the towing and roadside repair services are not free - cardholders have to pay the assistance network that responds.

While gold and classic cards are close cousins, platinum cards are in a different league altogether. Their annual fees are about seven times higher than classic cards' and the income requirement starts at six figures.

Platinum cards come with greater service and exclusivity and are targeted at the affluent. Research has revealed that affluent consumers like travel benefits and protection, preferential treatment and lifestyle privileges.

A common offering of platinum cards is concierge services, which help you book tickets and plan your travel. You also gain entry to exclusive clubs and discounts.

Debt Consolidation - The Answer To Credit Cards?

Is debt consolidation the right answer to your credit card debt? Perhaps you are drowning in debt and are receiving daily letters in the mail from companies claiming to eliminate your credit card debt. These offers are likely for debt consolidation loan plans. Are these right for your credit card debt, or is there another way?

First, think about what makes these loans an appealing way to eliminate your credit card debt. Most often the monthly payment you are offered with a debt consolidation loan is lower than the combined monthly payments of all of your credit cards. The reason for this is that the debt consolidation loan has a longer period of time, so they spread out the payments more than your credit cards do.

Debt consolidation loans give you the feeling that you eliminate your credit card debt. While the credit cards may be gone, the debt is still there, so this is a deceptive feeling. In fact, this feeling of having your debt gone can actually lead to more debt. If you are not careful, once you have transferred the money from your credit cards to the debt consolidation loan, you will quickly find that the credit cards start racking up charges again.

As nice as it would be to have a magic answer to your debt problems, debt consolidation loans are not it! They can end up costing you a large amount of money in the long run. First, debt consolidation loans are drawn out over many years. This means that even if you are receiving a low interest rate, the interest rate is being charged for a long time. To top that off, the loan may have an early repayment fee that makes it difficult for you to pay off the debt early if your situation improves.

Another way that the debt consolidation loan may be more expensive than your credit card debt is through the interest rate. If you have credit cards with low introductory rates, or even zero percent interest rates, even the low rates you are being offered on a debt consolidation loan will be more expensive. The only way to benefit from the rate on one of these loans is to find one that is less than the average of your current interest rates.

Instead of debt consolidation loans, consider a different tactic to fight credit card debt. First, curb your spending. Eliminate any unnecessary spending. This starts with a good budget. By writing down your expenditures, you can see where you have extra money to put toward your credit cards. Once you have found this money, dump as much of it as you can onto your smallest balance. Once that is paid off, continue dumping this money on the next lowest card. In the end, you will be paying huge sums towards your credit cards and will pay them off.

Remember to cancel the cards once you have paid them off. One card is sufficient to carry for emergency reasons. The way you get into trouble is by having too many cards and using them for every day purchases. A credit card is useful in certain situations where cash or checks are not useful, but it should not be used all the time. This will protect you from heading into a problem with credit card debt again.

Electronic Benefit Transfer- What Is It?

Credit Cards are being used extensively for Electronic Benefit Transfer (EBT). Electronic Benefits Transfer uses credit cards for the electronic delivery of benefits and entitlements to individuals who otherwise may not have bank accounts. In an EBT system, recipients access their benefits in the same way that consumers use credit cards to access their bank accounts electronically: the card is inserted into or swiped through a card reader and the cardholder must enter a PIN associated with that card. The benefit recipient can then access his or her benefits to make a purchase or obtain cash. For example, food stamp purchases are charged against the participant's allotment and other purchases or cash distributions are charged against the participant's cash assistance program allotment. Benefits that can be delivered via EBT generally fall into three categories: federally funded, but state administered benefits such as food stamps, aid to families with dependent children programs; state funded and state administered benefits (such as general assistance, heating assistance, refugee assistance and supplemental or emergency payments) and benefits that are both federally funded and federally administered (such as Social Security and Veteran Benefits through EBT, exciting networks and technologies can provide a benefit recipient with online access to their funds at Point Of Sale (POS) devices and ATMs. In an EBT process, no paper changes hands, except for the receipt printed for the purchaser by the POS device or the ATM. Recipients can access cash through any number of establishments, including grocers, drugstores and financial institutions, as well as ATMs. Installing POS devices in housing authority and utility company offices to accept rent and bill payments can also facilitate certain cash payments. Electronic Benefit Transfer has several advantages over paper-based benefit distribution systems. First, EBT is less costly. Currently, many recipients of federal and state benefits must pay significant fees to cash their checks. EBT systems are designed to provide no-cost or low-cost access methods. Second, EBT is more convenient than paper methods. EBT eliminates the need to carry food stamp coupons, stand in long lines to cash checks, or accept the entire benefit amount at one time. EBT programs also provide recipients with toll-free customer service lines and multilingual support to handle questions or problems. EBT is safer than cash or coupons, which can be lost or stolen. In EBT, benefits are stored electronically and can be used only when needed and in the amounts required. Recipients control all access to their benefits through their cards immediately and request a replacement card by a toll-free phone call. Third, EBT is convenient for retailers. It eliminates the time-consuming task of handling food stamp coupons, making grocery checkout procedures faster and easier. By eliminating checks and coupons, EBT reduces losses associated with theft, forgery and fraud. Finally, EBT is convenient for the government. Its inherent audit and tracking advantages enhance investigations into suspicious conduct by retailers. EBT improves benefit program management by creating an audit trail and record of benefit usage, ensuring that programs are working properly and effectively.

Which Credit Card Should You Opt To Use?

Chances are you obtained your credit card because a salesman hailed you in a shopping mall and tossed an attractive prize your way. But is the card right for your needs, as well as for your spending and borrowing patterns? There are two reasons to take a second look at our credit cards now. First, the card market has become more competitive in recent years and you can now take advantage of the latest offers and variations. Second, the ubiquitous credit card is becoming a bigger part of our daily lives. At such high usage levels, the right card could give you hundreds of dollar in savings a year. While there is no one best credit card, there are cards that stand out from the crowd in terms of rewarding you and giving you better savings and there are cards that are right for you based on how you use your plastic. With most cards offering a 20-day, interest-free grace period and late-payment fees, individuals who like to settle their credit card debts in full should opt for cards that provide savings in other forms. For instance, look for a card that has no annual fee and rewards you for spending money. Always read the fine print - several cards are offering 'free for life' deals that come with conditions. For instance, you might have to use the card for a specified number of times or spend a certain amount per annum. If you are in the habit of carrying a substantial balance on your card, forget about 'free for life' cards or bountiful reward programs. Just being in the habit of owing $1,000 on your credit card alone can cost you twice as much a year as the standard annual fees out there. You need to look for a card that minimizes the interest you pay. That means looking for cards that charge less than the annual 18% industry rate on your outstanding balance and/or cards that give you a rebate on the interest you are charged. What if you pay high value purchases in installments? There are two options available with credit cards. One is offered by associated merchants and is interest-free if you complete payment within the specified tenure. There are also 'flexi-payment' plans provided by the card issuer, and these either have a one-time processing fee or an interest charge. You should find a card that is associated with many merchants since this provides you with the most opportunities to utilize the interest-free installment plan. In some cases, you may have to pay a processing fee to use this scheme. The best card should then incur lower processing fees if any, to use this plan, while offering long payment tenure. On the other hand, if you prefer flexi-payment, look for a card that charges the lowest interest rate or processing fee and has a good choice of installment time frames. Remember to compare apples with apples and annualize flat processing fees if you are comparing them with interest rates. To encourage consumers to spend on their particular card, banks give incentives in the form of cash-backs and gifts. Which should you go for? Here's a tip - most gift reward programs give you around 0.5% of every dollar spent. So, it's suitable for the big spenders. If you don't charge a lot to your credit cards, it's wiser to just go for a card with no annual fees.

A Credit Score Common Misconception

The credit card companies are a tight knit group of people, in the sense that they don't like sharing much information with the general public. For example, they don't often, if ever, divulge their methods of computing an individual's credit score. Because of this and the lack of solid information available, many people are uncertain as to what does and what does not affect their credit score. This can often lead to confusion and inappropriate action, which can be detrimental to your credit score.

For example, many people would have you believe that decreasing the number of credit accounts you have will improve your score. This isn't necessarily true. You'll often hear thing to the effect that if you pay off some of your loans now then it'll increase your credit score, or if you close some particular credit account your credit score will increase. This simply isn't the case, however, even though it may seem a little strange to begin with.

The first main reason that it may not be appropriate to close one of your accounts is that credit companies give good credit scores to long-standing accounts. So, for example, if you have some small credit card that you've had for years (maybe since college or something similar) and you don't really use it that often, you should opt to keep this card. The reason being that you've had the card for a long period of time and it's, presumably, been paid frequently and so from the credit bureau's point of view it is a sound investment and so they will reward your credit score accordingly.

Another reason for not closing a number of credit account in the hopes of increasing your credit score is that if you close all of your accounts, you'll likely be opening a few more up immediately afterwards. If you cancel your credit cards, for example, you've likely done this to get a new card with a much better interest rate, however, this requires you to make a number of credit score and account inquiries, which decreases your credit score.

Also, closing a number of unused accounts will cause your relative debt amount to increase. Meaning that if you are using, say $100 out of $1,000 worth of credit and you close a number of accounts so that you now are using only $100 out of $150 worth of debt then you appear to be in a worse financial situation because you are close to maxing out your available credit.

Now, while it is true that closing credit accounts will likely make your credit score drop, it will only occur in the short term. Meaning that doing these sorts of things will have a negative repercussion if you are intending to take out a new loan in the near future. If, however, you don't have any such plans then closing your unused accounts and paying off accounts is beneficial to you since it will increase your long term credit score.

Remember that you need to take into account a number of things before taking any action on your current credit score and situation, a good idea would be to contact a financial advisor or at least make sure that you do your research before committing to any one plan.