Friday, September 15, 2017

Credit Cards

Well, folks, we got Equi-f***ed. I read somewhere that 130 million Americans' info was vulnerable in September 2017's data breach. SSN, addresses, names, the whole shebang. If the population is 330m, then maybe it's a time to revamp the system? A social security number is basically your national ID (since not everyone gets a passport) that has no photo attached, stays unchanged and has no letters or special characters to mix things up. Your email password is more secure, and you even give part of this number over the phone pretty often. My immediate thought was how ridiculous it is that we spend trillions of dollars on 'defense,' yet the average US citizen isn't protected from information security hacks. These thieves can do a lot with your SSN, name and address because of the convenience of electronic forms. Think about how many important things you've signed up for without a photo ID and it gets pretty darn scary.

What to do? The FTC says to check your credit reports for free, monitor your accounts, and consider a security freeze, which makes it harder to open accounts without your consent. Freezes for the big three credit report agencies (Equifax, Experian and TransUnion) will cost you up to $30 (fees depend by state), but you'll be that much more secure. As of 9/15/2017, the websites are overworked and I'm getting errors, but it's worth it to keep trying.

Now that we're all secure and confident to continue our lives (with a weekly check of our spending), let's talk about the borrowing part of credit. I know people that are super proud to always use cash, never have debt, and avoid loans like the plague. They are all super lucky but are missing out on a few major benefits of using credit cards.

The biggest and most obvious double-edged sword is the deferred payment: if you need a car/bike repair and payday is far off, you just have to wait. That might mean you can't get to work or school! (I can't use hospital emergencies in this case because even if our healthcare system is a crisis, it's pretty standard that they bill you after setting you right.)

Next obvious is that credit card companies protect you from fraud, and this is taken for granted until it happens to you. It's happened to me twice so far. I've had my card info stolen before and Capital One was on that ish like fur on a mouse. Credit card companies make so much money off people who neglect (or unfortunately can't keep up with) payments that they can afford to have our back at the drop of a hat. Those banks also often credit your account before they roll up their sleeves and go after the fraudster or company that shafted you!

Except when they don't. Story Time! A few years ago, I found a debit card on the street and called Chase customer service. I gave them the digits and told them I'd found a card on the street, and that they should close it because it's obviously not in the owner's position. Well, Chase bank, whom we so generously bailed out in 2008 asked my name, city and phone number in response. I got about 5 digits in when it occurred to me to ask why I was giving them my phone number. The associate told me that they were going to give the card owner my number and have me meet them to return the card back. This resulted in me closing my other Chase account and moving over to a credit union because of an absolute loss of confidence. Security means nothing to those people.


Anyway, it was a debit card that I'd found, and here's an important point about credit: since it's magic money, you're not completely screwed over when Klepto Chris cops your card. Cash can blow away in the wind, and debit cards are directly connected to your bank account. You might not be able to pay for your internet connection and read my blog if your debit card is compromised.

The last reason credit cards are dope is the permanent discount you get when you get cards like Capital One's Quicksilver that give you 1.5% cash back. Until they recently added a 2.5% charge, I paid my rent and utilities with this sucker, which was basically a free $100 per year!

So, while your peace of mind in not borrowing and always using cash on hand could be worth more than these benefits, think about each of these points and consider getting yourself a credit card. Check out nerdwallet.com for recommended cards.

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