Credit Column

Whether you love it, hate it, or love hating it, credit is a part of our capitalist experience and one that is a double edged sword. Use it responsibly and you’ll discover that the leverage it provides can enrich your life considerably. Use it irresponsibly and you’ll discover that the leverage it provides can put you in a deep hole of debt that can take years to recover from.


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How to Generate One Time Use Disposable Credit Card Numbers

Cutting Up Credit CardsThe recent breach of Global Payments has once again brought the issue of credit card security back into the limelight. While most, if not all, affected cardholders won’t feel any financial repercussions, they might have to deal with a little hassle as cards and card numbers are replaced. This rekindled my interest in a technology, one time use credit card numbers, that gained a lot of popularity the last time we had a huge data breach, when Heartland Payment Systems was hacked in 2009.

I was surprised to find out that so few issuers are offering one time use disposable credit card numbers. From what I could find, only Citi, Discover, and Bank of America offered something like this. They all use technology from the same company, Orbiscom, which was acquired by MasterCard in 2009. American Express used to offer a service like this but discontinued it years ago.

I’ll look at the Citi version of the disposable account number generator in greater detail and then link to the other two.

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Citi mtvU Card Ending, Convert to Citi Forward Card

Citi Forward® CardRIP Citi mtvU card. :(

If you’ve read Bargaineering for a while, you’ve probably read that I carry two credit cards – an American Express Costco TrueEarnings card and a Citi mtvU card. I loved the Citi mtvU card because it offered 5% in ThankYou Rewards, which is slightly worse than cash, at restaurants and bookstores, which includes Amazon.com. It’s a card I’ve had for many years and, despite slightly better alternatives on the market, I’ve stuck with it because it was pretty good.

According to a letter I received from Citi, the Citi mtvU card will be retired effective April 13, 2012. It will be replaced with a Citi Forward Card with a similar set of features and bonuses, though the biggest ones are most beneficial to people carrying a balance. Here is what they said about what’s new and what will remain the same.

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Who Else Looks At Your Credit Score?

We all know that our credit score is the primary source of information used by a perspective lender as they’re making the decision to approve or deny our credit application. What we don’t know is that with increasing frequency, our credit or FICO score is being used in places other than banks and mortgage lenders. In an economy where it is proving more difficult to get any type of loan or contract where you get the goods now and pay for it later, keeping our credit score as high as possible is even more important. Beside the mortgage lender, who else is looking at our credit score?

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NetSpend & Prepaid Debit Cards You Didn’t Apply For

Debit CardsThe other day an old college friend of mine emailed me about a strange thing he received in the mail. One of those prepaid debit card companies apparently sent him a debit card that he never remembered applying for. When he called the company up, they said that the card wasn’t activated and wouldn’t be activated until he called in and deposited money on the card. It was a prepaid debit card so you can’t even use it until you deposit money. This reminded me of a story I read on Wise Bread a long long time ago in which Xin Lu received an unsolicited prepaid debit card from NetSpend, one of many prepaid debit card companies. I don’t know if my friend got one from them or someone else (there are plenty of companies in this space), I didn’t ask, but here’s what I told him.

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Don’t Buy Non-FICO Credit Scores

credit scoreBy now, many people are well-aware that the credit score is an important factor in finances. Your credit score can have a bearing on the interest rate you receive (possibly saving or costing you hundreds of dollars). Additionally, your credit score can also influence the insurance premium you pay, and affect other decisions related to finances.

But the main reason people worry about their credit scores usually has to do with borrowing money. And, in many cases, the credit score used is the FICO score. When consumers think about the word “credit score,” the score they are considering is the FICO score.

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Do You Need a Credit Card?

Some things in our culture we rarely question. You go to the grocery store to buy food, you keep your money at a bank, and in your wallet is at least one credit card. Cash is quickly going the way of a land line and laser disk player but should it?

If you’re like me, you pay everything with your credit card. I keep $50 in my wallet to cover purchases at farmers markets, concession stands, and valet tips that come with business lunches. (Florida loves their valets) Short of those types of expenses, everything I buy goes to my credit card but maybe I’m an example of the type of person who relies on their credit card too much.

Credit cards are as controversial in the financial circles as healthcare in the political circles but do we really need a credit card as some people believe or should we go the way of Dave Ramsey who hasn’t given up his love affair with cash?

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My Love Hate Relationship with Credit Cards

Credit CardsWith the total amount of credit card debt now topping $693 billion or $6,500 per household, personal finance gurus may largely shun their use and existence but consumers continue to embrace them as a vital part of their financial portfolio. As a result of this divide, the internet is full of articles arguing both sides of this controversial financial topic and if we’ve all learned anything from all the reading, most of the authors, (including myself most of the time) had a definite opinion and aren’t interested in presenting the other side.

For this article, let’s try to be a little more fair and balanced and concede that both sides could make some valid points. What are they? Let’s take a look.

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How to Get a Great Credit Score

Eating CreditIn the dozen or so years of being a financial adult, I’ve never spent much time “working” on my credit score. Neither has my wife. I’ve opened up a few more credit cards than I probably should have in my younger years chasing promotions (and I subsequently closed them, to the chagrin of credit experts!), I have missed payments (before discovering the wonders of online bill pay and good reminders), and had, by chance, a good mix of accounts (student loans, mortgage). My credit score is 780 and my wife’s is 804 (maybe I shouldn’t have opened, or closed, those credit cards!).

How did I get that score? I’ll tell you.

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