Identity theft is a very popular crime and is getting at new victims everyday. There are measures you might take to prevent yourself from being a victim of identity theft. Here are a few ways:

1. Guard Social Security: Criminals who are looking for targets first try to find your Social Security number. So, you should guard your SS number to prevent yourself from becoming a victim of identity theft.
2. Credit Report monitoring: Your credit report has your social security number in it. It also has the names of your present and prior employers, a list of all of your account numbers and your over all credit score. Once you have applied for a loan or have applied for any other thing that requires a credit card, you must request that your SSN on the application should be clipped or completely covered or blotted out and your original credit report to be shredded right in front of you or be given to you once the decision has been made. The lender only needs your name and credit score to make a decision.
3. Rid unnecessary items: All your old bank and credit statements must be shredded as well as junk mails that have credit card offers. You may use crosscut shredders rather than regular shredders. You may also remove yourself from the marketing lists of the 3 credit card reporting bureaus in order to reduce the number of pre-approved credit offers that you may receive. Instead, you may enlist your name in the name-deletion lists of the Direct Marketing Association’s Mail Preference Service and Telephone Preference Service that banks and other marketers use.
4. Keep only important content: Let only important content fill your wallet. If you don;t need your credit card, don’t carry it with you. You may also get a photocopy of both sides of your license, credit cards and keep it with you somewhere else. This you should do, so that, if your purse gets stolen, you should have these numbers with you and also the expiration dates and phone numbers.
5. Payments: Bill payments can be washed in chemicals. So do not mail them from your home, they can easily be stolen. Remember never to print your SS number on your checks.
6. Examine statements: Always take a good look at your credit card statements before you make a payment. If you have unused credit car accounts cancel them.
7. Do not exchange personal information: You SS number and other information personal to you should not be given to anyone on the phone unless you trust that person.
8. Credit reporting monitoring service: You may subscribe to such a service so that you can find out whenever anyone is applying for credit in your name.

Secured credit cards help you to build credit much easily than a regular credit card. It is even much easier to get with low credit score as compared to regular credit cards. In secured credit card, you need to deposit some amount of money before starting to use the card to make purchases. However, a secured credit card too has some fees included just as in a regular card, like application fees, processing fees and annual fees, etc.

The things that you should know before taking a secured credit card are:

1. The costs of the card – Like the regular credit card, the secured credit cards too require you to pay fees like the application fees, processing fees and annual fees. It is better to check all the fees included with the card offer to avoid high cost ones.

2. Where to get a secured card – You can get a secured credit card at the credit unions. They offer secured credit cards to their members. If you join a credit union, you will easily be able to get a secured credit card. Also some banks do offer secured credit cards. After this you can make small purchases, and make on-time payments on these to improve your credit score.
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The new rules on gift cards were issued by the Federal Reserve on 23rd March, 2010, especially to protect the consumers from problems faced by them while using gift cards. These rules apply to retail gift cards only, like the Discover gift card, MasterCard, American Express, and Visa gift cards, etc.

A gift card is the one which looks like a credit card but works like a gift voucher. Gift cards are generally used to pay for purchases. The money available from the card can either be used all at once, or as and when required. Purchases can be done only up-to the value of the card. Banks do issue gift cards, which work as redeemable gift certificates, and transaction fees may be charged on these cards.

However, consumers do face a lot of problem while using gift cars. Some gift cards expire in less than 5 years, some suddenly lose their value. Thus the Federal Reserve has issued some new rules to protect the consumers from gift card scams and problems. The rules will be going in effect from 22nd August, 2010.

The rules are:

1. Card cannot expire in less than 5 years – According to the Federal Reserve, gift cards cannot expire in less than 5 years time. The 5 year duration is calculated from the date of first issuance of the card, or the date when the card was last reloaded.

2. Fees to be disclosed at time of purchase – The rule requires the company to provide the consumer with the details of all the fees at the time of purchase of the gift card.
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Identity theft is fast becoming the most preferred way to take out money from other people’s accounts. Identity thieves use your personal identifying information (PII) to steal money. There are various ways in which identity theft can occur. So it’s better to use one’s credit cards and especially the debit cards cautiously. However, there are ways to recover your credit after identity theft.

The ways to repair credit after identity theft are:

1. Pull your credit report: Pull a copy of your credit report from Equifax, Experian and TransUnion. Check if all the information on the report is correct.

2. Dispute improper listings: Note all the improper listings that you think has appeared as a result of identity theft. Dispute these items with the credit bureaus.

3. Close accounts: Close all those accounts which you think the thieves may have used or tampered with.

4. Keep track of transactions: Keep a track of all the new transactions. Check the statements on these accounts every month.
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From February 22, 2010, some new credit card rules have come into action. These rules will change the working of the financial or rather the credit card market. Life will become easier as the problems regarding debt and credit will eventually lessen. There has been much agitation from summer, 2009 to introduce new rules on credit cards. Some rules like – the credit card companies cannot increase interest rates on existing balance, a notice is to be served before 45 days of changing credit card terms and interests had been introduced in December, 2009. On 22nd February, the rule for saving young college goers from unnecessary debt problems have been been made effective.

The law for those under 21

This law requires that colleges should educate the students about credit cards, its usage and the related problems. It also mentions that this education should include debt counseling programs, to help students deal with the card problems in a much easier way.
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Credit card or plastic money is a card issued to its holder entitling him/her to shop for goods based on the holder’s agreement to pay for the goods and services. It is quite convenient to use credit cards. But before one can opt for any particular credit card, one needs to know how a credit card operates, and compare all the available credit cards.

Taking a credit card for the first time

It is quite difficult to get a credit card for the first time. There are very few credit card companies who easily issue a credit card to a first timer, without any credit history at all. However companies readily issue credit cards to college students. A person should check out the details of the company and card before opting for the card. Other than students, people who have responsibly handled their savings and checking accounts can apply for a credit card with that bank.

The 9 features you should know about credit cards
A credit card consists of various features which are:

1. Credit line – This is the maximum pre-specified amount of credit allowed by the credit card company to the borrower on the card. It is the maximum amount that a borrower can draw when needed. However if one acquires good credit history with time, the lender can increase the credit limit.

2. Account opening fee – A fee is charged by the creditor for processing an account, or opening an account.
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Credit score is the basis of a person’s creditworthiness. Maintaining good credit score is important for getting jobs, loans for various purposes like buying a house, insurances etc. However to repair credit score one should not always go to the credit repair companies. Most of the consumers who have opted for such credit repair offers have ultimately lost a great deal of money with no observable boost in the credit score.

How to avoid credit repair scams

There are various ways through which you can avoid a company scamming rather than helping you. These are as follows:

1. Check out the companies reports with the Better Business Bureau at www.welcome.bbg.org.
2. Don’t ever opt for the company which doesn’t give you a copy of your Consumer Rights.
3. Don’t trust a company which asks you not to contact the credit bureau directly.
4. You shouldn’t trust a company which doesn’t mention a consumer’s legal rights, what course to take if you are not satisfied with the company.
5. A consumer should always know that any information that is right information about credit cannot be removed from the report to boost the score. Therefore if a company promises that they can remove any such information don’t trust them.
6. If you aren’t given a copy of the contract before you can sign it, don’t trust the company.

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Are you getting into debt? Are you unable to find a way by which you can repay your debts and give a boost to your credit score? Debt arbitration is a good process to get this problem solved. As the name suggests, debt arbitration is done with the help of a third party acting as the arbitrator. It is often helpful for people who are stuck in huge debts and are struggling to be debt free.

What is debt arbitration?

Basically, arbitration is a process used to settle disputes outside courts. In this process the two parties (debtors and Creditors) place their cases in front of a third party. The third party delivers the decision based on the facts, which both the parties must follow. This third party is the arbitrator. This process helps a debtor to settle the debt with the creditor.

The debt arbitrator will help the debtor with a repayment plan which will be acceptable by both the parties. An arbitrator works on behalf of the debtor. A good arbitrator negotiates with the creditor to reduce the debt amount by 40-60% so that the debtor can pay it.

You must realize that a creditor wants his money back and he also does not want to visit the court for collecting money. Hence, even if he gets half of the money after negotiation he will not deny it. The arbitrator works on this point and helps the debtor to repay the debt within a considerable period of time.

Arbitration could be sought by the debtors to reduce any kind of debt, such as medical bills, utility bills, lawsuits, invoices, lien and many more.

Tips towards successful debt arbitration

Here are some suggestions you can follow:

• Select the arbitrator with utmost care: First of all you must be careful regarding the arbitrator you select. Do not believe in anybody who makes false promises and coaxes you into believing that arbitration is easy.

• No guarantee of debt reduction: Do not give away all the information at one go. In reality there is no guarantee that a creditor will agree to reduce the debt. You and the arbitrator can try to do it and it will depend on the negotiation skills of the arbitrator as to how much your debt can be reduced.
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The new credit card rules have been enforced with the aim to relieve consumers from the stress of dealing with sudden rise in interest rates, penalty charges and unscrupulous billing practices of credit card issuers. The reformed rules will help the consumers to manage their credit card bills comfortably and avoid going into default on their accounts. Some of them have already come into effect and close to providing desired results.

Credit card rules that have been implemented

The Federal Reserve Board, the National Credit Union Administration and the Office of Thrift Supervision have voted on the Credit Reform Bill. President Obama has signed the Bill transforming it into Credit Card Act and some of its provisions have already come into effect since 20th of August. There are various reformative measures incorporated in the Credit Card Act which will take effect at different times in 2009. Portions of the Credit Card Act, which was slated for a February 2010 implementation, might get implemented in December, 2009. The Members of the House of Financial Services Committee proposed these to be implemented faster since the major credit card companies are increasing the APR.

• Arbitrary increase in interest rate is stopped

From now on credit card companies have to follow certain restrictions on arbitrary increase in interest rates on the existing balances of the card holders. The banks have to wait for 60 days from the date of last payment before they can charge any kind of late penalty, in case the debtor is unable to pay the debt on time. The late penalty in the form of increased rate of interest could only be charged after the completion of 60 days. Hence, this increases the time period for the debtors to arrange for the minimum payment to be made on a credit card debt.

• 45 days notice before changing contract terms

The credit card (cc) companies have to give the card holders a notice 45 days ahead of making any kind of changes to the existing contract. The cc companies must also mail the bills 21 days prior to the due date of payment. Previously, the creditors were required to send a notice of alteration to the debtors 30 days ahead of making the changes and mail the bills 14 days prior to the due date. But after the implementation of the new law, this time period has increased making it beneficial to the card holders.

• Consumers have the right to accept or reject changes

The consumers will have the right to accept or reject the changes in the contract made by the creditor. However, if they reject it, they must pay the debt amount with the same rate of interest within 5 years and the minimum payment might increase. So, on one hand the debtors have the right to take decisions on how to repay the debt, while on the other hand this might end up in increasing the minimum payment for them. Moreover, the new rule states that the minimum balance cannot be increased more than 50%. Now if the time frame is not sufficient for the debtor to repay the amount, then it will depend on the creditor to increase the time frame. Hence, before canceling any changes you should keep in mind this condition associated to the rule.

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Have you got flooded with unwanted credit cards? Have you found listings in your credit report about which you are not aware of? Are you finding your bank accounts being accessed by someone else other than you? Then it is high time you must realize that, there is a thief around stealing your identity and using it to his benefits. The term ‘identity theft’ actually refers to fraud. It means that a person is assuming someone else’s identity to derive monetary and other benefits. It is considered a criminal offence all around the world.

How do you know that your id has been stolen?

There are different instances which indicate towards id theft. They are:

• Listing debts which you do not owe – You have pulled out a credit report and you find that there are debt listings made against your name. The listings are of those debts, which you have never owed. This is a typical instance of identity theft.

• Receive bills for purchases not made- You may receive bills for purchases you have never made. In such an event you know that your identity has been stolen.

• New accounts in your name- It has been found many times that the identity thief has opened a new account using your personal information.

• Loan denied or call received from CA- You may also be denied a loan, or you might receive a call from a collection agency asking to repay the debt. Whenever you find such things happening with you, you know that you are a victim of identity theft.

It is not difficult to take out loans, open new bank accounts, access existing bank accounts, purchase cars, get insurance and perform many other activities with your social security number, date of birth and your name. Hence, you must be extremely careful while handling things which might contain all these personal information. Your creditworthiness depends on your credit report and score, which get badly affected by such instances. So be aware of each and every activity related to your finance.

What to do after you become a victim of identity theft?

Whenever you find out that you have become a victim of identity theft, you must take certain measures as soon as possible. The measures are:

Put a fraud alert

The first thing you need to do after you realize your identity has been stolen, is to place a fraud alert on your credit report. Placing a fraud alert on your credit report will stop further activities on the part of the thief. You need to call any one of the credit reporting agencies on their toll free fraud number (TransUnion: 1-800-680-7289) and ask them to put a fraud alert.

After putting a fraud alert on your report, you are entitled to get free credit reports from the bureaus. Check all the information in it to find out any kind of inaccurate details. As soon as you find any discrepancy report it to the bureau. You must remember to use an identity theft report along with a letter explaining the reason of dispute.
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