8 Steps to Prevent ID Theft

8 Steps to Prevent ID Theft
ID theft is real but overhyped by companies selling pricey services. These eight steps can secure your identity for less.
After trending downward for four years, identity theft is on the rise again. Last year more than 11 million consumers were hit by the crime. That's a record, according to Javelin Strategy and Research, a California company that has surveyed 5,000 adults on the subject every year since 2003. The jump is partly a result of the recession, Javelin says, when fraud tends to spike.
But you don't need to sign up for expensive services offered by credit-reporting bureaus and other companies to keep your identity safe. Most of their products are unnecessary or ineffective, or they duplicate things you can do yourself -- free. Our own assessment of some two dozen identity-theft protection products crowding the market found dubious value. Here's how to protect yourself.
1. Get Serious, Not Scared
Don't let the horror stories freak you out. The worst-case scenario -- where someone opens new credit-card accounts or commits other crimes using your name, Social Security number, or other information -- is relatively uncommon. That nightmare happened to less than 1 percent of all U.S. households in 2005, according to the latest data from the U.S. Department of Justice. Half of that group resolved the problem, usually in less than a day to two weeks.
The most common form of ID theft isn't even what most people think of as ID theft. It's old-fashioned credit-card fraud and check-kiting, with someone fraudulently accessing your credit- or debit-card account. It affects about 4 percent of households. What's more, in most cases, your liability is legally limited, and credit-card issuers or banks pay the direct losses, not you. Most victims suffered no out-of-pocket costs last year; those who did lost only $373 on average, half the amount lost in 2007, Javelin says. That's well below the $1 million to $2 million guarantees that many identity-theft protection services trumpet to suggest that your losses could be catastrophic.
You can protect yourself by taking these low-tech, common-sense precautions:
• Never give your Social Security number or other information to strangers who call, text, or send e-mail messages to you, even if they seem legitimate, as with phony "phishing" e-mail that looks like it comes from your bank. And don't write your Social Security number on checks (except those you send to the IRS), noncredit applications, or other forms.
• Never leave your wallet or purse unattended. Don't carry your Social Security card, rarely used credit cards, or written PINs or passwords.
• Store financial account statements, medical records, and tax filings in a secure place at home, especially if you let workers or others inside, and shred those documents when you no longer need them.
• Don't post your date of birth, mother's maiden name, first pet's name, or other personal information on websites like Facebook, Flickr, Friendster, LinkedIn, MySpace, or Twitter. They're often used to verify your identity and could allow an imposter electronic access to your accounts.
• If your bank or credit-card issuer offers free online or mobile alerts that will warn you of suspicious account activity as soon as it's detected, sign up for them. The alerts are different from the expensive credit-monitoring services that banks also sell. (You don't need those.)
2. Place Security Freezes and Fraud Alerts
You can shut out ID thieves before they cause damage by placing a security freeze on your credit reports at all three major credit bureaus: Equifax (NYSE: EFX - News); Experian; and Transunion. It will prevent anyone from looking at your credit report except for the companies that already have a financial relationship with you, certain government agencies, and other exempt entities. To sign up for one, go to each bureau's home page and look for the security-freeze link.
If a lender can't pull your credit report, it isn't likely to grant new credit to someone else in your name. So a security freeze is an excellent deterrent against fraud. But like all deterrents, it isn't fail-safe. "Some creditors, such as payday lenders, will give credit without getting a credit report," says Rebecca Kuehn, assistant director of the Federal Trade Commission's division of privacy and identity protection.
If you haven't placed a security freeze and you spot a sign of identity theft, put an initial fraud alert on your credit report immediately. That's fast, free, and stays in place for 90 days. It also gives you additional legal protection. After that, request a security freeze.
Prospective lenders are supposed to see a fraud alert on your credit file and call you to find out whether the application is legitimate. Filing a fraud alert is appropriate anytime your identity information is compromised, such as when your wallet, cell phone, or computer is lost or stolen, or if your home or car is broken into. But you should also do it after more-subtle warning signs, such as finding unauthorized charges on your credit-card statement (even if quickly resolved) or failing to receive expected bills or mail.
Fraud alerts are free; security freezes typically cost $5 to $10 per person per credit bureau each time you place or temporarily lift one. Prices range from free to $20 depending on state law. But if you're a victim of ID fraud, freezes are usually free. You can initiate a freeze online directly with each credit bureau; for fraud alerts, you only need to inform one bureau, which will pass the request on to the other two.
3. Secure Your Devices
If you access the Internet on your computer, you probably already know about the need for a firewall; regularly updated anti-virus, anti-spyware, and anti-phishing software; and strong passwords with upper- and lower-case letters, numerals, and symbols like #, &, and $. But you might not think about other wide-open doors to your identity. Make sure your smart phone, iPad, other mobile devices, and portable flash drives containing personal data have security applications and encryption in case they're lost or stolen.
4. Keep an ID-Theft File
Because identity theft is now a fact of life, it's a good idea to set up a folder for certain documents and data and keep it in a secure place. Include credit reports, security-freeze documents and passwords, copies of annual privacy notices, security-breach notices, and potential ID-theft evidence, such as mail to your address in someone else's name. This is also the place to keep photocopies of the contents of your wallet -- the front and back of your driver's license, credit cards, club membership cards, etc. -- in case it's lost or stolen.
5. Review All Your Personal Data Files
Check your credit report periodically for items that you don't recognize -- such as accounts, judgments, liens, collections, bankruptcies, and other possible footprints of identity theft -- and dispute all erroneous and fraudulent information. Under the federal Fair Credit Reporting Act, you're entitled to one free copy of your credit report every year from each of the big three credit bureaus. Stagger your requests so that you'll get your file from one of them every four months.
You should order your free reports at www.annualcreditreport.com. You're also entitled to an additional free report from each bureau whenever you place an initial fraud alert on your credit report.
Other data brokers keep files on you. Irregularities could mean someone is using your ID to work, tap your health benefits, rent homes, or write bad checks. You have a right to free copies each year and to dispute errors in them.
6. Stop Unsolicited Credit-Card Offers
One way crooks steal your name is by swiping preapproved credit offers from your mailbox to open an account. They can then watch your mailbox to lift the new card you didn't know was coming. You can stop credit bureaus from selling your name to lenders by going to www.optoutprescreen.com or calling 888-567-8688. Opting out should stop most offers, and it's free.
Other credit offers might come from affiliates of financial services companies that already have a business relationship with you. You can stop them by paying attention to the annual privacy rights notices you get from banks, brokers, and other financial companies and exercising your right under federal law to prevent them from "sharing" (translation: "selling") your information with affiliates and others. Do the same with retailers and websites.
7. Monitor Accounts Often
It's no longer enough to wait for your monthly credit-card or checking account statement to look for suspicious activity. For added protection, sign up for online access to your accounts and check them regularly, even daily. "Almost a third of victims told us they became aware of an identity theft when they noticed missing money from an account," says Katrina Baum, acting division director and senior statistician at the National Institute of Justice. "What this tells me is that it really behooves consumers to be vigilant about checking their financial statements and paying attention to their account activity."
And don't assume that the paper checks listed are legit. Crooks can tap into your funds using fabricated checks with a fictitious name, address, and bank -- as long as they use your real account number.
Monitor your telephone bills (landline and cellular) to find any unauthorized "cramming" charges for phony services and purchases. As cell phones increasingly become mobile payment devices, fraudulent charges are showing up there, too.
8. Respond Rapidly
If you suspect you've been a victim of identity theft, act quickly. Immediately contact your creditors and financial institutions to report unauthorized charges or debits, and close any compromised accounts. Place fraud alerts and security freezes, and get your credit reports from all three credit bureaus so you can review them for irregularities. File a report with your local police and the FTC, and step up your own account monitoring. Chances are good that these actions will resolve the problem in relatively short order and at little or no cost.
Don't let the incident scare you into signing up for identity-theft protection or credit-monitoring services -- unless they're free, which is often the case for a limited time after corporate or government data breaches. Make sure a breach notice is not an identity-theft trick itself, and remember to cancel the subscription when the free period runs out.

5 Credit Card Mistakes People Make

5 Credit Card Mistakes People Make
There’s a good chance that you have a credit card in your wallet today. If this is the case, I wanted to show you 5 mistakes that many people make. You can avoid these mistakes; you’re going to find that you can make yourself a better credit card user.
1 Not reading the fine print: There is so much fine print with a credit card application. Everything from the introductory rates to the interest rate, you’re going to want to make sure you know how long your interest rate will last, as long as your rate is going to change. The more you know, the more you will feel comfortable with your card.
2 Taking out a cash advance: This is honestly one of the worst things that you can do. People tend to think that it is a great option to take out a quick, fast loan, but what they don’t realize is what they are going to be charged in terms of interest rates. A cash advance can easily set you back 30% in interest.
3 Not paying the bill or avoiding it: Let’s say that you don’t have the money to pay off your credit card bill. If you can pay off the minimum, at least attempt it. As long as your bill isn’t through the roof, you’re going to find that you can easily pay the minimum. Never just ignore your bills as this is going to kill your credit score in the long haul.
4 Not knowing how rewards work: There are some great rewards out there when it comes to credit cards. What you’re going to find out is that if you don’t pay your bills off in full, you’re not taking advantage of the rewards. The reason is because you’re going to be paying more in interest than the rewards coming back. Pay your bills off in full and you can avoid the interest rates all together.
5 Getting too many cards: You really only need 1 credit card. There’s no reason to sign up for 100s of them. Sure, a free t-shirt may be tempting, but you may be bound to use more than one in the future. The chances of them snowballing and adding up fast can happen, so be sure to avoid this one!
As you can see, many mistakes are common sense. Just use your head and see what’s best for your wallet. Treat your card like cash, pay it off in full each time, and there should be no worries!
Tags: credit card

New credit card rules – How they may help the cardholders

Credit card users are yet to witness the most dramatic changes in credit card terms. The interest rates, fees and the credit card terms are subject to change under the Federal law which has come into effect recently. The credit card laws have taken care of the consumers to some extent keeping in mind the requirements of the credit card companies. The new rules of credit cards have become more transparent and easier to understand. Only that the upfront costs has become higher. The credit card issuers are of the opinion that the new rules have made credit cards less accessible to low-income families or people with bad credit. Thus, if the credit cardholder has incurred a huge amount of debt, he can easily go for credit card consolidation from a debt consolidation company. Have a look at the highlights of the new credit card law.

1. Interest rate hike under control: The new credit card law increases interest rates on existing balances only under limited conditions. This can come into account only when a promotional offer or an introductory period ends or when the cardholder has been late on his payments. In case of new transactions, the interest rate on the new transaction can only rise after a period of 12 months. If there is any significant change in the terms of accounts to be made, a 45 days prior notice has to be made before applying for the mentioned change.



2. Time frame of paying off debt: The new rule demands the credit card companies to use simple language while preparing the monthly billing statements. At periodic intervals credit card companies also need to display on the billing statement the time consumers would take to pay off their monthly balance if they are only making the minimum payments. The statement should also include the interest rate that is charged each time the cardholder makes the minimum payment every month. This will enable you to keep a track of your payment dates and you can avoid late fees with the help of this law.



3. Billing practices: The new rule pertaining to the credit card act also requires the billing date to be the same for all months. But the credit card bill should be notified to the cardholder at least 21 days in advance of the due date. Payments that will be made by the cardholders will first go towards the highest interest rate balance so as to pay it off faster.

Where to go if you incur credit card debts?

After the new credit card bills have been passed, the credit card companies have become more stringent in their transaction processes. This change has been implemented due to the rise in credit card debt. But it is not that the problem of credit card debt has decreased significantly with the new rules. Still, people are incurring huge amount of credit card debts. If you have also accumulated your credit card bills, then go for credit card consolidation. There are many online resources which can help you in this regard. One such website can be www.cru-usa.info which details out many credit repair iusses. You may think of consolidating your debts on your own, but that would be the biggest financial blunder. Often experts have seen that consolidating debts on your own hurts your credit score in a significant way. You would fail to qualify for further loan and insurance with a poor credit score. So avoid doing it on your own. Instead go to a professional site who can help you reduce your credit card debts and pay off debts affordably.