It is one of the most played and favorite songs of the holiday season. The song is, “It’s the Most Wonderful Time of the Year,” by Andy Williams. Well last year, for twelve percent of online shoppers, that time was not so wonderful since they experienced fraud and identity theft. With more people shopping on line this year, the number is expected to be higher. So for some of you, this year may not be the happiest season of all, since you plan to do all your shopping online. Here are some suggestions to help you protect your credit while shopping during the holidays.
Know Your Limit. Make a Credit Card List.
I know for some of you this may be asking too much, but I can assure you this exercise is worth it! Before you enter into the jungle of online shopping and using your credit cards, make a list of your cards and their respective total credit amounts. Then, adding up the total credit amount given to you from each card, calculate 30% of that number. That’s the number you should keep in mind before you begin your holiday shopping and that number should also be related to your holiday shopping budget. Compare that number to the total amount of credit you have already used. Now you know how much credit is available to you. If you use more than 30% of all your credit available, your credit score will be reduced and you may be charged higher interest rates in the future. And if you are going over the 30% credit utilization limit, make a plan to reduce your utilization percentage to below 30% within thirty days. Remember! The holidays are just for a season but it takes a lifetime to maintain good credit.
Virtual Number
I know some of you have never heard of this, but you can protect your real credit card number by obtaining a virtual credit card number. This protects against fraud while shopping online during this holiday season. How does this work and where is it available? This option is available to mobile wallet users such as Apple, Google and Samsung, along with most Capital One and limited Citi card holders. For Capital One card holders who shop online, you can protect transactions by downloading and installing the browser extension Eno.
It works this way: after you have shopped and are at the merchant’s checkout page, the Eno extension pops up. You then sign into you Capital One account and Eno generates a merchant specific virtual credit card number. It expires in five years. This virtual card number protects you from fraudulent transactions on your credit or credit card. How? The transaction and merchant uses the Eno number, not your actual credit card.
So, if you plan to shop online, call your credit card company or Wallet, like Apple. Or call your bank and inquire whether they offer virtual credit card numbers or other protective options.
One final note regarding your virtual number: keep your receipts. If you have to return purchases, the merchant cannot use your credit card since to trace the transaction because they never had access to that number. Therefore, keeping receipts using your virtual credit card number is critical!
Credit Freeze
A credit freeze prevents new creditors from examining your credit reports and providing new credit to you. It will also prevent attempts to open accounts and make purchases under your name, thereby preventing identity theft and fraud. While that may be wonderful, be aware that prospective employers won’t be able to run your credit report. And, you won’t be able to purchase a big ticket item during the freeze exist since because the merchant cannot access your credit report. Placing a credit freeze on your account is free and you can remove it at any time especially when shopping for new credit.
WHAT’S UP!
Just a word of thanks. There is much I am thankful for this season, starting with you, the readers, and the opportunity to share stewardship and financial literacy information. Some of you have been sharing this information with your family, friends and wider community for which I am thankful. I am also thankful for this platform to present financial information and pray that something you have read over these past two years, and especially during Covid-19 has made you a better steward and more financially literate. Financially, I am thankful that you have employment, bank savings or savings plans, emergency funds, tax credit income, increased retirement funds, businesses, salary increases, better or building credit, cars, homes and food during this inflationary period. Let’s remember those who need financial resources. Do what you can to make a difference. Have a blessed and Happy Thanksgiving – and that’s what’s up!
