Credit Card Gist

Debit cards are just as vulnerable to fraud as credit cards are, reminds us Leslie Bankrate.com McFadden. Recent skimming reports at ATMs have reminded us all that we are not safe from fraud, even if the card itself is in our wallet.

“Criminals target ATMs because if they can get a card and a PIN then they can get cash,” says Mike Urban, senior director of fraud management solutions at FICO, the company that created the FICO credit score. He goes on to offer the following 11 tips for protecting your cards:

• Update your contact information with your bank, so that you can be informed about a suspicious charge.
• Keep your bank’s customer service phone number in a separate location from your wallet in case a thief steals the latter.
• Tell your bank your travel dates and destination, so that if your card is used at an unusual location, the issuer may decline the transaction.
• Sign up for banking alerts for irregular card activity, if available.
• Don’t use ATMs that are dirty or in bad condition. They may not work at all or they may be fake machines.
• Don’t use ATMs that prompt for unusual actions, such as a command to enter your PIN twice to complete a transaction.
• Look out for altered ATMs. If anything on the machine looks crooked, loose or damaged, it could be a sign that someone attached a skimming device.
• Don’t use ATMs if suspicious individuals are standing nearby. Criminals may watch as you type your PIN.
• If your card gets stuck in an ATM and someone comes to help, it may be a scam. A criminal may be trying to watch as you enter your PIN code.
• If your card gets stuck in the ATM, call your bank to report the incident.
• As you enter in your PIN, cover the keypad with your other hand to block anyone, or a camera, from viewing the numbers you type.

(Via Bankrate.com)

So which one of your credit cards should you use when traveling abroad? Are there any differences that you should consider? This is the question a Bankrate.com’s reader asked of Leslie McFadden, the website’s credit card expert. It is an issue that concerns all of us that use plastic abroad.

It turns out that there are differences and the biggest one is to be found in the foreign transaction fees charged by issuers for currency conversion. Visa and MasterCard charge a 1 percent conversion fee and most banks add their own fee on top of that, writes McFadden. American Express and Discover do both the issuing and the processing of their cards but still charge foreign transaction fees, she adds.

Consumers typically pay 3 percent in foreign transaction fees, however there is one exception. Capital One is the only major issuer who charges no such fees, not even passing on the 1 percent charged by Visa and MasterCard.

Another consideration should be made for using credit cards for getting cash at foreign ATMs. In such cases, you would pay the foreign transaction fee and a cash advance fee on top of it. Moreover, the interest rate on the cash advance will start accruing immediately, as there is no grace period for such transactions.

(Via Bankrate.com)

You may have a difficulty using your credit card in Europe, mostly due to technological issues, resulting from the wide adoption of the chip-and-PIN technology in many European countries. ATM cards, however, can give you an easy and cheap access to cash, at lower bank exchange rates (1 percent to 3 percent) and transaction fees (up to $5), compared to credit cards or traveler’s checks, says Bankrate.com’s Constance Gustke.

“ATM cards are preferable over credit cards,” adds Hasbrouck, who has been to more than 50 countries. “It’s a free, instantaneous way of accessing money.”

Gustke offers five reasons why you too should be using your ATM card in Europe:

• Few cash withdrawal fees. Some large banks, like Citibank and Bank of America, will not charge you a withdrawal fee, if you use an ATM within their network of banks.
• Mostly lower bank exchange rates. Some banks, like Bank of America, charge lower exchange fees than others. JPMorgan Chase’s exchange rate is 3 percent.
• Easy access to your money. It’s usually easier in Europe to get cash from ATMs than from your credit cards. “Many U.S. credit cards won’t work in Europe,” says Edward Hasbrouck, author of “The Practical Nomad: How to Travel Around the World,”. “Automated kiosks for train tickets don’t work with them, for example.”
• More cash expenses. Some places in Europe, Like French restaurants, only take cash.
• Plentiful ATMs. ATMs are everywhere in Western Europe, says Deborah McWhinney, head of personal banking at Citibank. “Finding a machine isn’t difficult,” she says, adding that using an ATM is also easy “given the near universal acceptance of U.S. cards.” The hard part is selecting the right bank network, as fees outside of your bank’s network can be as high as $5 per withdrawal.

(Via Bankrate.com)

Typically, consumers are protected from fraudulent purchases on their card accounts by their card issuer’s zero-liability policy. However, warns CreditCards.com’s Vanessa Richardson, depending on the type of card or how you use it, you can sometimes end up losing money.

Transactions can be handled differently, says Robert Vamosi, security risk and fraud analyst for Javelin Strategy & Research. “One difference is liability coverage for fraud associated with an ATM account. While 92 percent of banks offer it, only 81 percent of card issuers do. Some cover fraudulent PIN transactions, but there’s a lot of fine print. Each bank has a list of what they will or won’t cover.”

With that in mind, Richardson offers four keys to card zero-liability policies:

• Debit and credit card transactions are governed by different rules. Coverage is not always the same for credit and debit cards, warns Paul Stephens, director of policy and advocacy for the Privacy Rights Clearinghouse. “Rules for credit-card liability are a little more consumer-friendly. With a debit card, you can theoretically lose all the money in your account if you don’t promptly notify your bank.”
• Only transactions with signature are covered. MasterCard and Visa do not cover transactions that use PIN numbers, because they are processed outside their payment networks. PIN transactions are processed by ACH, the Automated Clearing House.

  
  “Visa and MasterCard’s zero-liability policies only apply to signature-based transactions,” says Stephens. “Even if you always sign for your card instead of using a PIN, you’re not covered. If your card is lost, stolen or skimmed, you have no way of knowing whether the crook is using a signature- or PIN-based transaction, and you have no control over it.”

• Don’t count on your bank do everything for you. The bank will first ask you to contact the merchant and try to resolve the dispute with them. “If you can’t, the next step is for the bank to investigate it with the merchant,” says MasterCard spokeswoman Joanne Trout. “If they can’t come to a decision, then we get engaged and become the arbitrator.”
• You may not get your money back immediately. 82 percent of the 25 largest banks reimburse cardholders for compromised funds within a day, according to Javelin Strategy & Research. Yet, banks legally have 10 business days to investigate fraud. “Sometimes if you have a good, long-standing relationship with your bank, they’ll replenish funds right away,” says Stephens. “But I’ve heard of people who’ve had the same bank for 25 years and they’ve still had to wait for two weeks.”

(Via CreditCards.com)

As the soccer world prepares for the World Cup in June, fans who plan to travel to South Africa should also be prepared for high ATM fees, according to a research by Spanish bank Santander.

Santander’s study revealed that only 5,000 SA Rand (around $644) can be taken in and out of the country in cash, so fans will need to rely on ATM withdrawals or alternative means of making payments.

ATM withdrawals while abroad, however, typically cost around 2.75 percent as a foreign exchange fee and a cash handling fee of 1.5 percent of the transaction, according to Santander. This means that, for every $1,000 withdrawn, fans would have to pay about $42.50 in processing fees.

“People should be aware that they can save themselves a lot of money if they have a debit card that allows free ATM access and no charges on debit card transactions worldwide,” said Nici Audhlam-Gardiner, Director of Banking at Santander.

(Via Santander.com)