7 Tips to Prevent Identity Theft

According to Wikipedia identity theft is a term used to refer to fraud that involves someone pretending to be someone else in order to steal money or get other benefits. The term is relatively new and is actually a misnomer, since it is not inherently possible to steal an identity, only to use it. The person whose identity is used can suffer various consequences when he or she is held responsible for the perpetrator's actions.

How do you prevent identity theft? Here are the top tips:

1. Your expired credit cards: Destroy not only your card but the chip as well. Cut your cards into pieces so that nobody can pick up any clues by rummaging through your trash.

2. Review your monthly statements: Check your monthly statement to ensure that all charges tally with your records. Notify the bank when you don’t receive your monthly bank or credit card statements.

3. Use your credit cards with care: Make it a habit that transactions are done in your presence; this is to avoid fraudulent uses of your cards.

4. Personal information: Do not give away personal information over the phone easily especially those relating to your credit cards and passwords.

5. Shop online with care: Shop only at secure sites, such as https:// with an ‘S’.

6. Check your credit status: Get your free credit reports online from Equifax, TransUnion, and Experian or CTOS in Malaysia.

7. Keep your personal documents in a safe place: Your personal identification card can be subjected to fraudulent uses if lost. Your lost card can be used to obtain a bank loan by someone else and the crook allows the loan to default. Eventually, you are declared bankrupt without your knowledge. That is why you need to check your credit status from time to time.

Handle your credit cards and personal identification card with care to avoid needless identity theft.

Credit.com – A Website for Financial Products and More

Credit Cards

Credit.com, a company based in San Francisco. CA. was established in 1995 serving as an educator, advocate, and facilitator. It provides information about money, credit, loan, and more. Here are the services provided by Credit.com

Credit cards: You can get your credit cards by credit score or based on rewards such as airline miles and reward points. You can also choose between cash cards and gas cards or prepaid cards. There are also secured cards, business cards, and student cards.

Credit scores and reports: You can have a free trial of 3 credit reports and 3 credit scores from Equifax, Experian, and TransUnion

Online banking and savings: You can compare savings rates from leading financial institutions and open an account online

Loans: You can also shop for personal, emergency, auto, home, or student loans here.

Debt help: Credit.com offers free debt consultation. They also offer assistance in tax and bankruptcy issues.

Knowledge and education: There is a credit learning center and you can get answers from the credit, real estate, lending, and legal experts. You can find useful articles on their blog about the financial world and participate in their forum

Credit.com is the place to be enlightened and gain knowledge about financial products before you make a decision for the most suitable product for you.

Financial Freedom - 7 Successful Steps

In order to achieve financial freedom, you need to, first of all, find out your current situation. When you are in debt especially credit card debts you need to settle those debts before you can start saving because the interest from the savings is very much less than the interest charged to your credit card's outstanding balance. Let’s look at the steps to be taken to gain financial independence:

1. The root of the problem: You can start paying off your debts especially your credit card debts but if you continue to adopt a lavish spending lifestyle, there will be no end to it. Find out if you are spending on what you need or what you want. Stop buying unnecessary items and be happy with what you have. You are one step nearer to reach your money goals when the problems are identified and you put a stop to it. If you are unable to give up your impulsive spending habit by using credit cards, the best thing to do is to cancel all the credit cards.

2. Allocation: Allocate an amount for essential items every month to cover food, petrol, children's education, housing loan, and utility bills. Stop spending any more on what you want.

3. Debt settlement arrangement: Look at all the credit card outstanding amount and other debts and use whatever money that is left to reduce your debts. Start by settling the debt with the highest interest rate. Select to settle a smaller outstanding amount from your debts. By doing so it gives you relief that you have settled one of your debts and give you the motivation to settle the rest.

4. Add new sources of income: You can do it right at home like I do. I write articles and I collect earnings from AdSense, though the amount is small. Two points to note here. With the additional income you can pay off your debts faster and you can set aside an amount for emergency from the extra cash.

5. Pay yourself first: When you are out of debt you can now put aside an amount every month. If you can’t do it all by yourself then you take up an investment-linked insurance policy to force yourself to save.

6. Time is an important factor in savings: The wonder of compound interest will help you to make your savings grow. The more you can save and the sooner you start the easier it is to reach your saving goals.

7. Invest your savings: When you have accumulated a substantial amount you can start looking for investment channels. This is an area that you need to be careful or else your precious savings will vanish in the air. Traditionally, you can invest in blue chips, unit trusts, and properties in selected locations.

Summary

First of all, you need to identify your financial problems and you put a stop to them. Is it unnecessary spending on your credit cards or is it your gambling habits? Spending on what you want will lead to more debts. Always set aside an amount to cover monthly expenses and pay off your debts with the balance. At this juncture, you can't start saving yet. The interest from your debt is very much higher than the interest you can earn from your savings. Pay the highest interest debt first but chose a debt with a smaller amount. You will get a little relief when one of the debts is settled. Try to supplement your income to reduce your debts faster and start earlier to save. When you are unable to discipline yourself to save, arrange with the bank for a standing order to pay monthly for, say, an investment-link insurance policy, When you have substantial savings you can look for investment avenues to give you a better ROI (return on investment). You gain financial freedom by taking these steps diligently.

Source: Financial Freedom- 7 Successful Steps

How a Credit Card Transaction is Processed

It takes only a few seconds to scan your card and the transaction is completed and you are on your way home with a new pair of sneakers. However, in that few seconds, information passes swiftly from one party to another to get approval for your transaction. Here is how a credit card transaction is processed:


1. You produce your card to charge the purchase. The merchant scans your card.

2. A request is sent to the merchant’s bank for the transaction.

3. The merchant‘s bank sends another request to the issuing bank of your card to obtain authorization of the transaction.

4. An authorization code is sent to the merchant’s bank when the transaction is in order.

5. The merchant is notified and a slip is printed for the cardholder to sign and another slip is printed for the cardholder to keep. The transaction is completed successfully.

6. The merchant keeps the transaction and other transactions for the whole day and does a batch at the end of the day and transmits it to his bank for settlement

7. The batch is sent through the card network such as Visa or MasterCard to request payment from the issuing bank.

8. The issuing bank deducts a fee which is shared with the card network and transfers the balance of the amount charged through the network to the merchant’s bank.

9. The issuing bank debits the cardholder’s account for the full amount charged and obtains payment from the cardholder in due course.

10. The merchant receives the amount from his bank less a discount rate.


A simple transaction but a complicated way for the merchant to get it approved and finally receive the fund fewer charges (around 2%).

3 Ways to manage your money to avoid bankruptcy

Bankruptcy

According to figures released by the Malaysian government, from 2005 until June this year the following categories were the top cases in the number of people declared bankruptcy:


Unable to settle car loan 15176 cases (23.69%)

Unable to settle commercial loan 6949 cases (10.85%)

As guarantor 6244 cases (9.75%)

Unable to settle personal loan 6129 cases (9.57%)

Unable to settle credit card debts 3767 cases (5.88%)

Owning to income tax 660 cases (1.03%)

Housing loan default 214 cases (0.33%)

Educational loan 138 cases (0.22%)


Out of the 8 categories, 6 categories were relating to people who were unable to manage their personal finance. How do you look after your own money to avoid being declared bankrupt?


1. Live within your means: Before you decide to obtain a car loan or a personal loan you must factor in the amount payable each month within your monthly budget. When you work out the sum and you find that your outflow (household expenses, car loan or personal loan repayment, and all other commitments) is more than your inflow (your earnings) you are not in a position to raise the loan. Avoid the temptation and forget about getting a new car or getting a personal loan to beautify your house.

2. Credit card: Credit card is not a source for getting credit. It is only a convenient way to make payments. You still have to earmark and set aside a sum to meet the payment that you have charged to your credit cards. Again, the amount that you are about to charge has to be included in your monthly budget. If it is out of your monthly budget don’t use the card and restrain yourself from getting materialistic. Another point is that it is wise to settle the amount fully and promptly when you receive the monthly statement from the bank. If you don’t, you will incur late charges and finance charges and the amount will snowball. Bankruptcy is the outcome as confirmed by the number of cases stated above.

3. Self-discipline: Don’t keep up with the Joneses. Do not attach yourself to material things. Enjoy what you have and be happy. Keep your reputation clean because people remember you more as bankrupt than an ordinary citizen.


A debt-free life is a carefree life. You go to sleep soundly every night knowing fully well that nobody is going after you for money.

6 Ways to Use Your Credit Cards and save

Credit cards are a useful financial tool to employ for maximum savings. This is how you can do it:

1. Keep only those cards that are free for life. For each free card, you keep you can save between RM200 and RM300 on annual fees.

2. Use one of the cards for the payments of monthly insurance premiums and utility bills such as electricity and telephone. It is very inconvenient to pay so many bills all by yourself. For the monthly amount charged to the card, you can collect valuable points. You can then redeem the point for useful household appliances like cooker, Thermos flask, oven, and vouchers.

3. Use CIMB Petronas Card (gas credit card) to pump petrol and receive the 2% cash discount and the card is free for life.

4. Use a cashback credit card for all the purchase of grocery items and other goods

5. Use one of your cards to buy big-ticket items by installments with zero percent interest. You spread the installments up to 36 months. Your monthly cash flow will not be affected severely. You don’t incur interest and on top of that, you collect valuable points to redeem useful items.

6. Pay your credit card bills promptly and fully. Otherwise, the interest charges will be more than your savings.

Take advantage of offers given by credit card issuers to maximize savings. Most important of all, settle the amount fully before the due date when the statement arrives.

7 Tips to Use Your Credit Cards

There is a saying,” Credit card is for convenience and not for credit."
So, take the following precautionary measures:


1. Every time you use your card make sure that you have sufficient funds to meet the payment at the end of the month.

2. Do not exceed your credit limit.

3. When you notice any unauthorized transactions in your statement, inform the bank promptly.

4. Pay your monthly statement before the due date.

5. When you make major purchases by monthly installments ensure that the amount is within your monthly budget.

6. When you are unable to make payment in full you must settle the monthly interest fully and also nothing less than the minimum amount.

7. Notify the bank when you change your address. Ask for a copy of the monthly statement when you don't receive it. Otherwise, you will end up paying interest for late payment.


When you take proactive steps to use your cards you also look after your creditworthiness.