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  • Heartbleed Bug–What You Need to Know

    by Bill Hardekopf, CEO of LowCards.com

    Software designed to provide extra security for websites has now been deemed to have a significant flaw that has made consumers' personal data vulnerable to theft by hackers.

    The Heartbleed Bug is a flaw found in OpenSSL, which is a cryptographic program that digitally encodes secure data as it is sent to and from computer servers, and makes it so that the service provider and the intended recipients are the only parties who can read it.

    Your computer may be visiting a website that is using this program when you see the padlock in your computer browser. Other versions of this type of program exist, but only the OpenSSL version has the flaw.

    Unfortunately, OpenSSL is popular and websites such as Yahoo did use the technology to guard their sites. It is estimated that up to 2/3 of all sites may have been affected by the bug.

    Google Security and Codenomicon, a security firm in Finland that discovered the bug, said Monday that the bug has existed in the software for two years. It could be exploited to reveal the secret keys that identify service providers using OpenSSL.

    If attackers copied these keys, they could steal the names and passwords of people using these websites and copy their data. They could then set up fake sites that would appear real because they used the stolen keys.

    Consumers seem to be assaulted every day with news of security breaches, but this one may be major because of the sheer number of websites that are vulnerable.

    Thus far, there have been no widespread reports of hackers using data from this breach, but to be on the safe side, many experts are recommending consumers to change passwords on financial accounts.

    There is nothing that needs to be done on your personal computer because the flaw is with the websites. If you are concerned about whether a website you frequent is vulnerable, you can test it using this free tool.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates.

  • Your Child's ID Is a Big Target for Identity Thieves

    by Bill Hardekopf, CEO of LowCards.com

    Child identity theft can be a bigger problem than other forms of identity theft because it can go unnoticed for years.

    A recent Carnegie Mellon study found that 10.2% of children under the age of 18 had someone else using their Social Security number. That percentage is dramatically higher than the 0.2% rate for adults in the study.

    Crooks are targeting children because the probability of discovering the theft is so low. Children rarely use their Social Security number and parents usually do not monitor the child's identity.

    Thieves can use a child's identity to open new lines of credit or apply for government benefits. This identity theft can have a devastating impact on a young person's credit score.

    Many states do not have system for dealing with child identity theft, but Delaware, Oregon and Maryland have recently inacted laws that allow parents to establish their child's credit identity and freeze it until the child becomes an adult. Texas and Illinois are considering similar laws.

    A free service also exists from AllClearID called ChildScan. The service looks through employment records, credit records, medical accounts and criminal records to see if your child's Social Security number has been stolen and is being used.

    The study was based on the identity protection scans on 42,232 children (age 18 and under) in the United States during 2009-2010. The pool of 42,232 child identities includes everyone under 18 in a database of over 800,000 identity records.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • Negligent Healthcare Practices Put Your Identity at Risk

    by Bill Hardekopf, CEO of LowCards.com

    A new study indicates an astounding 43 percent of identity theft cases in 2013 were the result of medical identity theft. This occurs when criminals gain access to your medical files and use information to open accounts and make purchases.

    The study points out the lack of security for electronic devices like tablets and smartphones used in healthcare facilities.

    The Fourth Annual Patient Privacy and Data Security report from the Ponemon Institute says, "Despite concerns about employee negligence and the use of insecure mobile devices, 88 percent of organizations permit employees and medical staff to use their own mobile devices such as smartphones or tablets to connect to their organization's networks or enterprise systems such as email."

    Most healthcare organizations that practice the "bring your own device" policy do not require employees to use anti-virus programs on their tablets and phones. This makes the devices vulnerable to high tech thieves who want to steal information from the programs.

    The report says, "More than half of (these) organizations are not confident that the personally-owned mobile devices are secure."

    What could the criminals do with your medical records? This depends on how much information is stored. In most cases, your full name, address and Social Security Number are enough for hackers to create credit cards and open accounts in your name. They rack up as many charges as possible, and then you are left to clean up the mess.

    Ask your hospital, clinic, doctor's office or other medical facility about their security practices. Take advantage of getting your free credit report every year from each of the three credit reporting agencies. It is in your best interest to take steps to guard against medical identity theft.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • The Appeal of Prepaid Debit Cards

    by Bill Hardekopf, CEO of LowCards.com

    Two new surveys from the Pew Charitable Trusts show that prepaid debit cards have become a popular alternative to checking accounts for more Americans.

    Consumers loaded $64.5 billion onto prepaid debit cards in 2012, a 13% increase from the $56.8 billion in 2011, and more than double the $28.6 billion in 2009.

    According to one survey, 12 million people, or 5% of adults, use prepaid cards at least once a month. The average prepaid card customer had a household income of nearly $30,000 per year. Three-quarters of these consumers are under 50 years of age.

    Consumers are using prepaid cards as a way to stay out of credit card debt, control their spending, make purchases online, and avoid overdrafts. Among the people who have had a checking account, two in five have had problems with overdraft fees.

    Prepaid cards may be a way to avoid checking accounts, but there are no federal laws or regulations that directly protect consumers from hidden fees, liability for unauthorized transactions, or loss of funds in the event of an issuing institution failure. This may change soon since the Consumer Financial Protection Bureau is expected to issue some guidelines on prepaid cards this May.

    Prepaid cards don't have to provide disclosures of fees or terms. The study found that only 32% of consumers compared terms before choosing a card.

    The Pew study shows the changes in the prepaid market from 2012 to 2013. Retail banks and established financial services companies are now offering these cards. Prepaid cards offered by large banks were more economical in 2013 and some of the disclosures were clearer including what is covered by FDIC insurance.

    More cards are charging monthly fees that are similar to traditional checking accounts instead of other transaction-based fees. Of the 66 most popular prepaid cards, the median fees were $5.95 for a monthly fee, $2 for an out-of-network or in-network ATM withdrawal, $1 for a point-of-sale signature or PIN transaction, and $1.95 for a live customer service call.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • Big Changes in Frequent Flier Programs

    by Bill Hardekopf, CEO of LowCards.com

    Mergers have dramatically consolidated the airline industry, reducing the number of carriers, flights and competition. One of the overlooked factors of this consolidation is the significant change in frequent flier programs.

    Airlines are now rewarding how much members spend rather than just the number of miles they accumulate.

    In January, Delta Airlines and United Airlines started requiring cardholders to spend $2,500 in addition to logging 25,000 miles in order to obtain the lowest level of seat. Spending requirements are waived if a loyalty program participant spends $25,000 a year on purchases with a carrier co-branded credit card.

    Airlines say the change is to reward their best customers and give the bigger rewards to the customers who spend the most money. Jet Blue and Southwest Airlines already had expenditure-based loyalty programs.

    As airlines have consolidated to four major carriers (United, Delta, American and Southwest), fewer competitors mean airlines now have more power to make these changes. Some experts say the days of the free domestic ticket for 25,000 miles will soon be over and the airlines will be happy to see them go.

    Some carriers have also increased their mileage requirements on premium reward travel. For example, Delta increased the miles for a "Saver Seat" to Hawaii from 40,000 to 45,000 Sky Miles. United's Mileage Plus members need to spend 30 percent to 40 percent more miles to get a free seat on any Star Alliance partner airline.

    American Airlines is merging into US Airways and has yet to make any changes. Citi will soon issue new credit card accounts for the combined American Airlines AAdvantage frequent flyer program. The two frequent flyer programs are expected to merge in 2015.

    If you have saved airline miles, it may be time to use them before they lose more of their value and seats become harder to find. Many industry analysts advise flyers to start planning a trip almost a year ahead of time and avoid peak vacation times to obtain a better value.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • Paying Taxes with a Credit Card: Is It a Good Idea?

    by Bill Hardekopf, CEO of LowCards.com

    April 15 is less than two months away, and many of us are already trying to figure out how to pay our taxes. Using a credit card to pay taxes may seem like an easy way to appease the IRS, but this may not be the most financially prudent thing to do. Before you pay taxes with a credit card, you need to know the pros and cons, and what other options might be available.

    Pros of Paying Taxes with a Credit Card

    If you pay your taxes with a credit card, you will not have to worry about being in debt to the IRS or incurring a late payment penalty. You would just have to make payments on your credit card until the balance is gone.

    In rare cases, you may be able to earn some rewards points for paying takes with a credit card, depending on how your rewards program is set up. Many credit card companies have blocks on these payments to prevent them from counting towards your rewards, so check with your issuer.

    If you are trying to consolidate your debts onto a single account, this may give you an opportunity to do so. Use a low interest credit card to pay off all of the debts you have, and then you can focus on making one payment each month.

    Cons of Paying Taxes with a Credit Card

    When you charge your taxes to your credit card, you have to consider the interest rate on your card. This is usually much higher than what you would have with a payment plan through the IRS. If you have a new card with 0% interest, note when that introductory rate expires. You will need to make sure to pay off your debt before then.

    Know there are fees for paying taxes with a credit card. Typically, charging taxes with your credit card will cost an additional 2% to 4% of your tax bill. That means you'd be paying an extra $20 to $40 on a tax bill of $1,000. These fees do not go to the IRS. They go to the payment processor. They're basically money out of your pocket.

    Having a high credit card balance could impact your credit score; having a high tax debt with the IRS will not. Your debt utilization ratio on your credit card (the amount of debt divided by your available credit) will increase when you charge your taxes, and that could negatively affect your credit score if that credit card debt remains high for an extended period of time.

    How to Pay Taxes with a Credit Card

    If you are going to pay taxes with a credit card, you will need to do so online. There are six websites approved by the IRS to process these payments, as listed on the IRS website. Each one charges a different fee, and they accept different types of cards for payment. Go to the website and complete the information that comes up in the prompts. You will have to select the type of payment you are making (installment, payoff, etc.), and provide information that verifies your identity. Once you pay, you will be sent an email with a receipt for the payment you made.

    Other Tax Payment Alternatives

    If you do not want to pay your taxes with a credit card, consider setting up an installment plan with the IRS. This will give you time to pay off your debts. Call the IRS to speak to a representative about your options. He or she will work something out with you to suit your budget and your bill.

    You could also make tax payments with a debit card, rather than a credit card. You will not have a chance to earn rewards that way, but you will pay much less in processing fees. Most websites charge a flat fee of $2 to $4 for debit card transactions, which could save a lot of money in interest penalties in the long run.

    You may be able to take out a low interest loan to pay off your tax debt. Then, you would be making payments to a bank, not the IRS. Note that this may have a negative impact on your credit score at first, but it might actually help your score over time.

    Consider all of your options before paying your taxes with a credit card. A smarter solution may be out there for you.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • Identity Fraud Continues to Skyrocket

    by Bill Hardekopf, CEO of LowCards.com

    Identity theft is happening all the time - literally. A new report by Javelin Strategy & Research shows that there was a new identity fraud victim nearly every two seconds in 2013. Last year, there were an estimated 13.1 million victims of identity fraud, up nearly 500,000 from 2012. The study shows that 44% of all fraud involved an online transaction.

    The only good news in the report was that criminals stole less money last year. The total amount stolen dropped from $21 billion in 2012 to $18 billion in 2013.

    Identity fraud is defined in the report as an unauthorized use of another person's personal information to achieve illicit financial gain.

    Pay attention to the data breach notices because it is becoming more likely that you will be a victim of identity fraud. In 2013, one-third of consumers who received a data-breach notification became a victim of fraud. That figure was just one in five in 2011.

    Identity thieves have also become more aggressive. Instead of stealing your personal information and opening a new account, they are taking over existing bank or credit card accounts. The survey said this took place in about 28% of identity fraud losses, up from 24% in 2012.

    Identity thieves are not restricting their efforts to bank accounts. The report showed that identity fraud carried over to other financial accounts where consumers keep their money, such as eBay and PayPal accounts. These thefts tripled last year and accounted for $5 billion in losses.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • Millenials Cutting Back on Credit Cards, But Struggle with Credit Scores

    by Bill Hardekopf, CEO of LowCards.com

    Millenials are carrying far fewer credit cards with smaller balances than older consumers but are still struggling with their credit scores and debt utilization.

    Experian's Fourth Annual State of Credit analyzed the credit card habits of four generations: Millenials (19-29), Generation X (30-46), Baby Boomers (47-65) and the Greatest Generation (66+).

    Millenials carry 40% less credit card debt than the average person. Consumers who are 19-29 years old have $2,682 in credit card debt compared to the national average of $4,501. In addition, Millenials have the fewest number of bank cards of the four generations: the average millennial has 1.57 bank cards versus a national average of 2.19. In fact, a greater number of younger people continue to shy away from carrying any cards. In 2005, the number of people between the ages of 18 and 30 who did not own a credit card was 9%. In 2012, that number rose to 16%.

    One of the reasons for the drop in credit cards is that banks tightened their credit standards after the recession, making it harder for Millennials to qualify for a credit card.

    While Millennials show a reluctance to charge and open new accounts, stores continue to launch campaigns aimed at this demographic. Macy's recently released a full chain of brands that are designed for young adults, and Marshalls has opened a store-within-a-store targeting this group as well.

    Despite carrying fewer cards and charging less, Millenials still struggle with their credit score. The average Vantage score of 628 is significantly lower than the national average of 681. The study found that credit scores increased rather substantially as people entered an older demographic.

    Generation X has the most debt with an average amount of $30,039, almost 8% higher than the national average. They also have the highest rate of late payments. These figures explain their lower-than-average credit score of 653.

    Baby Boomers have the most cards with an average of 2.66. But their average credit score (700) and debt utilization (30%) show they are in fairly good financial shape.

    It is not surprising that seniors have the highest credit scores (735) with the lowest credit card balance, the least amount of debt, and pay off their bills on time better than any other generation.

    As a country, the average credit score was 681, the average debt utilization was 30%, the average debt was $27,887, and the average person had 2.19 bank cards with an average balance of $4,501.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • The Move to EMV Credit Cards

    by Bill Hardekopf, CEO of LowCards.com

    (NOTE: LowCards.com now has a special page devoted to EMV credit cards)

    For years, the United States has lagged behind the rest of the world on moving to more secure EMV credit cards. Consumers have not asked for them, so credit card issuers and retailers have not made the costly switch. But the recent data thefts at Target and Neiman Marcus that have affected millions may force that long-overdue change on the credit card industry.

    While the United States accounts for only 27 percent of the credit card transactions in the world, it is responsible for 47 percent of card fraud, according to the Nilson Report.

    In the United States, credit cards currently have a magnetic stripe that contains payment information with a 16-digit number that never changes and is given out hundreds, if not thousands, of times each year. It is relatively easy for a sophisticated thief to steal this information and create a fake card.

    An EMV card, named for developers Europay, MasterCard and Visa, is a regular-size card with an embedded chip and a magnetic strip. The transaction information is encoded differently every time, which makes it harder for criminals to steal data and use them for another purchase. Chip and PIN is a much more secure technology and requires the cardholder to enter a four digit Personal Identification Number (PIN) that must correspond with information on the chip. No personal information about your account is stored on the chip.

    The data breaches have been big news lately, affecting millions of consumers and costing billions of dollars. Many analysts believe the cost of absorbing the fraud is still cheaper than converting from magnetic strip to EMV. The cost of adopting the technology is estimated to be anywhere from $15 billion to $30 billion, but fraud only costs about 5 cents for every $100 of credit card use, according to The New York Times.

    However, Visa and MasterCard are pushing for the change and may begin shifting liability to merchants who have not equipped their stores to accept chip cards beginning in 2015. However, even if if merchants take care of their end, there is no guarantee that credit card companies will all start issuing EMV cards.

    EMV cards are the standard throughout Asia and Europe. Countries that have adopted the technology have seen a sharp decline in credit card fraud. According to a Retail Payments Risk Forum study, fraud losses in the United Kingdom since widespread adoption to the EMV cards in 2004 has decreased 34 percent.

    These EMVÂ cards won't protect against all bogus transactions, but it appears they will significantly cut down on credit card fraud. That's a move that may be long overdue here in the United States.

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

  • Credit Card Companies with Most Complaints

    by Bill Hardekopf, CEO of LowCards.com

    The Consumer Financial Protection Bureau launched a complaint database in November, 2011, and it collected over 25,000 complaints through mid-September of 2013. The report released last week by the U.S. Public Interest Research Group summarized some of the findings from this complaint database.

    The credit card issuer that received the most complaints was Capital One with 5,265 or 21% of the complaints. That was followed by Citibank at 18%, then Bank of America and JPMorgan Chase at 13% each.

    However, when you look at the number of complaints based on the purchase volume, GE Capital ranks lowest among issuers. GE Capital received 88 complaints for every $1 billion in transactions, which was much higher than the other companies. Capital One, by comparison, only received 46 complaints for every $1 billion.

    The good news is that approximately 40% of account holders who registered a complaint with the CFPB have had their problems resolved since filing the complaint. Roughly 29% received some type of refund from their credit card company, with an average refund of $128.

    The most common complaint concerned billing disputes (16% of the total complaints), followed by difficulties with APR or interest rates (10%) and trouble with identity theft, fraud and embezzlement (7%).

    Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. © 2014 LowCards.com, All rights reserved

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