Credit Card Debt Management

In the interests of protecting against fraudulent credit card usage, many banks are getting proactive. Overseas, where the crime has apparently run rampant, banks are now blocking legitimate cards at even a hint of suspicious activity, according to an interesting new article on British financial site ThisIsMoney.

International credit card fraud has been a tremendous problem, and it’s not getting better anytime soon. Reports say the problem seems most significant in the United Kingdom — we’re talking about hundreds of millions of dollars. There are entire crime rings dedicated to this around the world, and international enforcement is difficult, to say the least. Hopefully, by the banks taking matters into their own hands, it will deter criminals somewhat. However, it can also create serious headaches for travelers.

The following steps can provide smooth overseas financial transactions:

Talk to your credit card issuer. Let them know you will be traveling and making purchases overseas. This way, they won’t be caught off guard and become unreasonably suspicious.

Mix it up. Pack a variety of debit and credit cards, and mix it up with cash for a backup plan. You might even consider a prepaid card loaded with the currency of the country in which you will be traveling, ThisIsMoney advises.

Write down phone numbers. Just in case you and your credit/debit cards become separated, write down the customer service phone numbers and keep them in a safe place. These numbers can be found on the backs of the cards or on your monthly bill. You might also want to write down the three-digit security code found on the back of your card for verification purposes, should you need to call customer service. Most should be okay with just hearing your social security number, however.

Research your company. Make sure you know your credit card issuer’s policies on card replacement and other fraud issues. It’s certainly nice to have 24-hour emergency card replacement, in the event your card is stolen or swallowed by an ATM machine.

The U.S. Senate finally passed a controversial housing bill, designed to help overextended homeowners deal with mortgage pressures. Many critics say the bill would ultimately do more harm than good in many ways. They say it would increase pressures on mortgage giants Freddie Mac and Fannie Mae, onto which the government would essentially transfer some of the financial burden accumulated by overeager lenders stuck with bad loans. Furthermore, critics say the bill would cost the federal government some serious coin.

But, as always, the government has a plan — it may arguably be a terrible one, but it’s there. To offset some of the costs associated with government assistance, there will very likely be an increase in government regulation. Sounds vaguely familiar, doesn’t it, China and Russia?

Lingo inserted last-minute by Sen. Chris Dodd (D-Conn.) would require credit card processors (including online ones like eBay and Paypal) to report businesses’ credit card sales to the IRS. According to the Wall Street Journal, this would raise $1 billion per year for the next decade and “would allow the government to identify possible cases of underreporting when determining who to audit.”

The measure is also considered a source of revenue to offset the costs of another bill currently floating through Congress revising the Alternative Minimum Tax. This whole credit card reporting thing is probably going to happen, but those crying privacy invasion and intrusive government may be knee-jerk reactionaries. This is what Kate Szostak of the Senate banking committee staff, said to the Hartford Courant’s On Background blog:

“This is not a controversial provision or a new one. Republicans and Democrats on the Senate Finance Committee have supported it for months, and it has been included in the Administration’s budget proposal for years. This provision simply requires banks–not small businesses–to report sales transactions to the IRS each year and to merchants at the end of each day. It makes the tax system fair for everyone, without burdening small businesses and without putting consumers’ privacy rights at risk.”

Summer is a time for visiting family and friends, going on missions trips, traveling to faraway destinations and dream vacations, or enjoying a wedding followed by a honeymoon. In short, there’s a lot of traveling going on during these few months.

It can be easy to get caught up in the trip planning and the awe and wonder of sight-seeing, but vigilance is a must when it comes to your credit cards. So how does a person protect their information when jet-setting around the world?

The Kansas City Star has a few good tips, and below are some of the highlights:

-Report lost or stolen cards immediately. Most misuse of your card(s) will occur within a few days, so time is of the essence.

-Memorize your PIN. It may seem like a no-brainer, but there are those unfortunate few who choose to write their PIN down and keep it in a “safe place” in their wallet. Choose an unobvious PIN (i.e. not your birthdate) and try to change it up for each different card.

-Check your card after transactions, particularly in busy locations like restaurants. This will help you ensure, first of all, that you didn’t leave it on the counter/table/floor and, second of all, that the employee helping you handed you the correct card.

-Keep track of your trash and receipts, particularly when they contain personal information and/or account numbers.

-There may be card restrictions for traveling overseas, so call your credit card issuer beforehand to be sure. This will also warn them to expect to see international charges on the card so it won’t be a red flag.

Overall, traveling with credit cards in tow are just like traveling with cash in tow. Keep it close to the vest and use common sense. Your travels will be happier, and your credit report will thank you for it.