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15 Things to stop doing that are making your broke!
Many of us set resolutions every new year, and chief among them is the goal to improve our finances. For some, that may mean saving more; for others, landing a better-paying job; and home ownership is still the American Dream for most families.
But before we can tackle this financial Bucket List and move forward, it’s important that we identity the money mistakes that we’re making that are continuously setting us back. We’ve identified 18 things that are common among the average American consumer, causing them to always be short on money and even hurting their families.
So, if you want 2018 to be the best year yet for your finances, stop doing these 15 things that are making you broke!
- Maxing out credit cards
We’re certainly a nation that loves debt, as we now have more than 1 trillion in credit cards and other revolving debt, an all-time high. Add in mortgages, student loans, car loans and medical debt, etc., and U.S. consumers personally owe more than $12.9 trillion – the GDP of about half the countries in the world!
In fact, the average adult with debt in the U.S. has 8 credit accounts, $16,000 worth of credit card debt alone, and is paying about $430 a month just in minimum payments.
While there’s nothing at all wrong with having credit cards and using them responsibly (you should keep some revolving debt), the problem comes when we max them out – with no plan to pay them off.
Paying only minimum payments means that the average $10,000 balance at 15% interest will take 15 years and about $22,000 to pay off completely.
Maxing out cards also impacts your credit score, since about 30% of your FICO is calculated by the amount of debt you hold compared to your total available credit (called credit utilization.)
So stop maxing out those cards and make more than just the minimum payment this year!
- Not saving
We understand that money is tight and there’s usually more month than paycheck; not the other way around. But one of the principal ways you can ensure that money isn’t always this tight in the future is to start saving. And there’s no better way to put away funds for a rainy day than automatically saving out of every paycheck (or tax refund).
In fact, the majority of Americans couldn’t even come up with $600 today without borrowing or selling something, and sudden financial setbacks like a job loss, medical problem, broken car or other unexpected expense can send about 40% of families into dire financial circumstances.
The best way to combat that – and make sure that you’re always prepared and won’t make even worse short-term financial decisions – is to save a certain percentage of your paycheck automatically, before you even see that money. To resist the temptation to spend it, keep a savings account without an ATM card so it’s not easy to access. You’ll be amazed how it adds up!
- Using payday loans, check cashing, and rip-off credit accounts
Remember how we just mentioned financial emergencies? When the roof leaks, someone gets sick, or the job starts laying people off, those cash crunches often result in people making panicked, short-term financial decisions just to get by. Frequently, those result in cash advances on credit cards, payday loans, using check cashing establishments, applying for a bunch of new credit cards at once, or looking for other personal loans.
The terms and interest rates on these loans can range from incredibly high and expensive all the way to usurious and illegal, and usually put people in a much worse financial situation than when they started.
- Making impulse purchases
Have you ever noticed that retail, department, and grocery stores line the checkout aisles with certain items? They do that on purpose, of course, because they understand that the majority of consumers will make impulse purchases; buying things they don’t need and didn’t plan on purchasing.
Just how much can you save by skipping the magazines, sodas, electronic knick-knacks, and other impulse purchases every month? Furthermore, do you even know how much you’re spending on coffee, lunches, and meals out? It all adds up.
Try this: For one month, carry around a little notepad (or just use your smart phone – there are great apps that help you track every dollar you spend), and write it down every time you spend a dollar. At the end of each week, add it all up according to categories. You’ll probably be shocked how much you’re spending on things you don’t need or necessarily even want – and that money could be going to savings, paying down your credit cards, or other good use.
- Not checking your credit periodically
Did you know that only 1 in 4 people check their credit report annually, and 60% of Americans don’t even know what their credit score is now? Checking your credit report regularly is so important for a host of reasons:
- 25% of credit reports contain errors, inaccurate or duplicate information.
- ID theft and credit fraud now affects nearly 10% of the population every year, and the recent Equifax Hack saw the personal data of about 167 million Americans compromised.
- These days, your credit score is so more important than just getting a mortgage or applying for a new credit card. Getting an apartment, the insurance rates you pay, your utility and cell phone accounts, and even getting a new job may depend on a clean credit report and a good score.
- Not looking into refinancing your mortgage
If you do own your home already, congratulations! While it may be the best investment you’ll ever make, there’s no denying that you’ll be paying it off for a long time (usually 30 years) and for a huge sum of interest – probably more than the original home price! So every smart homeowner should inquire with their mortgage broker if a refinance is available and something that would help them save.
It’s free to talk to your favorite loan officer and get an idea about your options, and lower-interest mortgages or refinancing into a product like a 15-year loan may save you tens (or even hundreds) of thousands of dollars over the years. You may even be able to save money on your monthly payment AND pay the home off faster, but the worst that can happen is that they tell you that you don’t need to make a change.
By the way, the better your credit score, the lower your interest rates and payments will typically be!
- Not reading the fine print
That 0% credit card offer sure looks great, but what will the rate be after that introductory period? Is that great low mortgage payment fixed, or will it go up as other interest rates rise? What are the fees and charges associated with that new student loan or business loan?
Too often, we’re offered new credit that looks like a no-brainer, but comes with some important stipulations that will make it way more expensive in the future.
Nothing is free in this world (except great credit advice from Nationwide Credit Clearing!), so make sure to read the fine print and know exactly what you’re getting into before you sign on the dotted line. Any loan, investment, or other financial vehicle is sure to come with fees, charges, and interest rate details that are crucial to understand. Read all you can but it’s also a good idea to ask questions – and get the answers in writing!
Look for part two of this blog soon, where we’ll cover the next eight things to stop doing if you don’t want to be broke!
8 Ways to protect yourself from ID theft and financial hacks
We’ve all been carefully watching the news as details of the Experian credit hack unfold, but one thing is for sure: no one is safe from the threat of identity theft.
In fact, according to data by the National Crime Victimization Survey/U.S. Bureau of Justice Statistics, 7% of U.S. adults 16 or older have been victims of identity theft.
Shockingly, across the world last year alone, 4.2 billion personal records were stolen by hackers and data thieves!
So there’s a strong chance that you may have your data compromised at some time in your life, and 86% of identity theft victims suffer the fraudulent use of one of their current financial accounts like a credit card or bank account.
Surveys show that 85% of Americans have already taken steps to prevent identity theft, such as shredding financial documents or changing passwords. But now more than ever, it’s critical that you take you fortify yourself against identity thieves.
Is a credit freeze the answer?
Many media outlets and credit “experts” have been advising people to place a freeze on their credit report.
Credit freezes do offer some protection since lenders won’t be able to pull your credit report and new accounts can’t be opened in your name.
To request a freeze, you have to contact each of the credit bureaus, Equifax, Experian, and TransUnion, separately, and each one will have details, terms, and restrictions on their website.
While freezes will protect against new accounts being opened in your name, they don’t even prevent the most common type of identity theft these days: misuse of existing accounts. In fact, only 4% of identity theft victims have new accounts opened in their names according to Bureau of Justice Statistics data
So what other options do you have to keep your identity safe?
Get a copy of your credit reports
It’s important to start by carefully reviewing all three of your credit reports for errant accounts or suspicious activity. You can request a free copy of your credit reports from TransUnion, Equifax and Experian or contact MyNationwideCredit.com for a free report and consultation.
Check your financial accounts
You should also monitor each of your financial accounts, including all credit card and bank statements. Even tax refunds have been a growing target of fraudsters, so IRS records also need to be reviewed.
Set strong passwords
The first line of defense against internet fraud and identity theft is setting strong passwords. The average person now has dozens of passwords that they enter online, many of them for sites and accounts that hold sensitive financial information.
When setting passwords, avoid personal information like birthdates, addresses, and family names. Use nonsensical combinations of letters and include numbers and !*#. You should also avoid using the same password for every account, and be careful about user names and what other information you store in internet accounts.
Enroll in a credit monitoring service
To ramp up your protection against identity thieves, consider enrolling with a reputable credit monitoring service. A good service will track all activity on your credit report every day, notifying you if there are any changes, such as a hard inquiry used to open new accounts or erratic charges.
Alert the authorities immediately
If you see suspicious activity or that you’ve been the victim of identity theft or fraud, contact the authorities immediately. You can file an identity theft report with the Federal Trade Commission (FTC) at identitytheft.gov.
The FTC also recommends that you file a report with your local police department if you’ve been the victim of identity theft.
Place a fraud alert on your credit reports
A fraud alert on your credit reports will raise the level of scrutiny and caution on your accounts if you suspect that you’ve been the victim of identity theft or even just a data hack. Creditors will need to contact you before opening any new credit lines or accounts. You only need to file a fraud alert with one of the credit bureaus since they are required to instruct the other two bureaus to do the same.
There are two kinds of fraud alerts. An initial fraud alert requires that a lender call you or make “reasonable steps” to contact you and confirm the new activity is valid and will last 90 days.
Extended fraud alerts are available if you’ve been the victim of ID theft and have a police report to prove it. You can only file an extended fraud alert one time but it lasts for seven years, and it requires that a credit contact you to verify new activity.
Register a credit lock
On face value, credit locks and credit freezes offer similar benefits, including preventing someone else from opening a new account in your name. But there are also some huge advantages to credit locks that you should consider. (You can’t institute a credit freeze and a credit lock at the same time.) In fact, credit freezes offer additional levels of protection over freezes, and also cost less.
Unlike locks, credit freezes are guaranteed by state law, so you have a level of legal protection. And while freezes can take a little time and effort to activate and deactivate, locks are initiated using an app on your smartphone and can be produced or discontinued immediately.
(However, only TransUnion and Experian offer instant credit locks, with Experian’s TrustedID Premier lock system taking 24-48 hours to process).
Similarly, only two bureaus (this time, TransUnion and Equifax) offer free credit locks, so you’ll have to pay for Experian’s CreditWorks lock program. But it’s still probably worth it considering that Experian’s credit lock program also offers daily credit monitoring and alerts.
Do you have any questions about the Experian hack, how to monitor and safeguard your credit and protect from ID theft? Contact Nationwide Credit Clearing for a free credit report and consultation!
25 Facts about the Equifax hack – and what you can do to protect yourself
1. Equifax – which is one of the country’s big three credit bureaus (along with TransUnion and Experian) recently suffered a significant data breach.
2. In fact, according to the company, the personal data and even some financial records for up to 143 million Americans has been compromised – which amounts to about half of the total U.S. adult population!
3. Equifax (EFX ) is a private company that’s traded on the New York Stock exchange with a mandate is to earn profits for its shareholders, which it did to the tune of over $3 billion in revenues in 2016.
4. Along with TransUnion and Experian, makes money by collecting your financial and demographic information, analyzing it in the form of a credit report, and then selling that data to lenders, banks, mortgage companies, auto dealers, credit card firms, and yes, even marketers.
5. However, although Equifax tracks the payment and credit statistics for nearly every American adult (a small number are what’s called “Credit Invisible”), they don’t seek our permission, nor is there a way to opt out or keep your data private.
6. Equifax’s negligent mishandling of the situation has been highly publicized. The timing, for one, is of grave concern. Reportedly, Equifax knew about the data breach as early as mid-May but didn’t announce the hack publically until July 29.
7. Industry reports point to the fact that the security breach in Equifax’s platform existed for nine years without being fixed, and hackers slowly siphoned off consumer information for months.
8. Signaling that some serious malfeasance took place, three high-level Equifax executives sold shares of their own holdings after the hack was discovered, but before it was made public.
9. These three inside-trading execs, including Equifax’s Chief Financial Officer John Gamble, made $1.8 million from the sales of Equifax stock – before stock prices fell upon news of the hack.
10. By cracking Equifax’s database, the cybercriminals were able to obtain consumer records including names, Social Security numbers, birthdates, addresses and driver’s license numbers – all of the information they need to open new accounts or commit identity fraud.
11. According to credit expert John Ulzheimer, those pieces of data are “the crown jewels of information for credit fraudsters.”
12. Since people’s names, social security numbers, birth dates, etc. never change, the information can be used to defraud and steal from consumers without a shelf life.
13. According to Equifax, the credit card numbers of at least 209,000 consumers were also lost in the hack.
14. Just as concerning, the compromised data may include user names, passwords, security questions and other login information for Internet websites and other financial accounts.
15. In the wake of the breach, two high-level Equifax employees stepped down this week, Chief Security Officer Susan Mauldin and Chief Information Officer, Dave Webb.
16. Shocked by the magnitude of the breach and the revelation that Equifax hid it from the American people, Equifax stock plummeted, falling from $142 per share to $92 as per the time of this writing.
17. Both the FBI and the Federal Trade Commission have initiated investigations into the hack, as well as possible Equifax impropriety. Additionally, the state attorney general of Massachusetts is suing the credit giant, and class action suits are also springing up by the day.
18. So what is Equifax doing to try and remedy the problem? The credit firm has set up a special website where consumers can log in and see if their data was included in the 143 million stolen by hackers.
19. However, you need to enter your last name and social security number to access their website – which is questionable considering the circumstances.
20. Equifax is also extending the offer of free credit monitoring service, called “TrustedID Premier,” for a year to those affected.
21. TrustedID Premier includes credit monitoring of Equifax, Experian and TransUnion credit reports, a credit freeze for Equifax accounts, identity theft insurance, and a monitor to see if someone is trying to sell your social security number on the internet.
22. This may sound sufficient, but critics argue that Equifax isn’t completely forthright about their help. For instance, once the year offer expires, the service is no longer free but costs $19.95 per month. (Consumers actually have to enter their credit card number just to enroll in Equifax’s “free” year-long monitoring service.)
23. It’s been slammed as a back-door way for Equifax to reduce their liability, too. Buried within the fine print when you sign up for TrustedID Premier was a release of liability, renouncing your rights to later sue Equifax or participate in any class action suit.
25. So what should you do now?
Don’t wait until your financial accounts are hacked or your identity stolen until you act. In fact, we can almost ensure that there are more big data hacks coming, since 65% of Fortune 100 companies still use that same processing framework (called Apache Struts) that was so easily hacked at Equifax.
The best thing to do is to be proactive, starting with checking your credit reports in detail (not just score).
From there, we recommend utilizing these tools to protect your identity and finances:
Whether you take advantage of Equifax’s offer or use a trusted third-party service, credit monitoring will keep tabs on your credit report for signs of fraud or impropriety.
Establish fraud alerts with each of the three major credit reporting agencies, Equifax, Experian and TransUnion, as well as alerts for each of your credit and debit cards.
A credit freeze goes a step beyond fraud alerts in protecting you, which locks your credit files. No new accounts can be opened in your name without going through a security protocol, and only companies that you already commonly do business with will be able to make charges on your cards.
Change your passwords
It’s a good time to go through and change your passwords, for all Internet sites as well as banking, credit, and financial services. Make sure these are secure, not based on your address, birthday, name, or any personal information, and stored in a safe place.
In this extraordinary time of confusion and risk, we’re happy to provide you the information and tools you need to protect your credit – and your family’s financial future. Feel free to contact us anytime for a no-cost credit consultation.
5 Ways To Be A Victim Of Credit Card Fraud
Credit card fraud takes place in a variety of ways. It can occur from someone dumpster diving to high-tech hacking. Perhaps a dishonest clerk or waiter takes a photo of your credit card and uses your account to buy items. The fact is fraud can happen to even the most tech-savvy consumers. Check out these 5 common ways consumers fall victim to credit card fraud.
Not Shredding Your Bank Statements: Do you still receive paper bank statements? With online banking many consumers don’t even bother to look at the statements that come in the mail. However, if you are still receiving statements in the mail there is action that needs to be taken. If you are disposing the statements, make sure the are shredded and illegible. If you are keeping the bank statements store them at home in safe place.
Not Checking For Skimmers: Thieves may attach skimming devices to the exterior of an ATM or POS system that requires a PIN. Before using a POS system check to make sure there is no unusual device added to the machine. Glue, scuff marks, or loose materials around the machine, are signs the machine has been tampered with.
Online Banking Using Public Wi-Fi: Free Wi-Fi is becoming readily available at restaurants, coffee shops, airports, etc. across the country. How safe are these public networks? When using public Wi-Fi, it is best to not check the balance of your credit card. It is easier for hackers to intercept online transactions and passwords when you are using an open wireless network.
Responding To Phishing Messages: Have you ever received a text message from your “bank”, asking you to log into your online banking account? Be skeptical of these messages, especially if they request personal information such as your login or account number. Your financial institution has this information and won’t ask you for it. When you receive a message you are unsure of, contact your bank immediately before you respond.
Not Checking Your Account: How will you know if there are questionable charges on your credit card if you never check your account? Open your bills and statements promptly. If you see a questionable charge, report it!
If you or a loved one has been a victim of credit card fraud, contact Nationwide Credit Clearing to learn how we can help you. Call today (773) 862-7700.
“Home of the Free Credit Report & Consultation”
2336 N. Damen
Chicago, IL 60647
Toll Free: 877-334-3296
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Credit Card Fraud
Credit card fraud can be a critical matter. For victims, it can be a frightening experience. Nobody wants to live their life on edge, but it always seems that credit card theft could happen at some really unexpected times. Although there is no guarantee that anybody is free from becoming a VICTIM OF IDENTITY THEFT, there are certain things that can be done to decrease your chances of you falling victim to credit fraud.
- Check ATMs and gas pumps for loose parts or suspicious keypads. If you discover something suspicious, you need to inform the service station or bank, and transact your business at a different store or location.
- Check your credit card statements for strange charges. CHECKING YOUR CREDIT REPORT on a regular basis can allow you to react much better to fraud or identity theft.
- Be careful when opening the Internet in public. Unlike home or office WiFi networks, there’s a large # of WiFi spots that don’t encrypt the info being transmitted through them. Your email, credit cards, and even bank account, information could be fair game for a cyberpunk with the proper skills. Never share private information with a stranger on social media sites and then try to limit the private information you share with your friends.
- Don’t carry information in your wallet or purse that you don’t need. Birth certificates, Social Security cards, PIN numbers and passwords can be easily stolen. Identity thieves could be gone before you become aware of any missing information.
- Shred documents with personal information before you throw them away. Identity theft crimes are usually thought of as being high-tech in general. There are still identity thieves who do not mind foraging through a dumpster for valuable information.
Think You May Be a Victim of Fraud?
IF YOU SUSPECT you are a victim of identity theft, you might consider adding a 90-day fraud alert to your credit report. A fraud alert warns lenders that you may be a victim so they can take additional steps to verify your identity before approving a loan application. Immediately inform creditors when you suspect or have proof of fraud. Take time to document every contact. Be sure you thoroughly comprehend the process of reporting fraud & what’s expected of yourself as well as the creditor.
Preventing credit card fraud takes a conscious effort. Protecting your credit card information begins with you.
If you or someone you know has been a victim of identity theft or credit card fraud, Nationwide Credit Clearing can help.
Nationwide Credit Clearing
2336 N. Damen
Chicago, IL 60647
Toll Free: 877-334-3296
Credit Card Fraud
Credit card fraud is a serious matter. For victims, it can be a frightening experience. While no one wants to live a life looking over their shoulder, credit card theft can happen at the most unexpected times. While there is no guarantee that anyone is exempt from becoming a VICTIM OF IDENTITY THEFT, there are certain things you can do to decrease your chances of falling victim to credit fraud.
**Check ATMs and gas pumps for loose partsparts or suspicious keypads. If you find something suspicious, you should inform the gas station or bank, and transact your business at another machine.
**Check your credit card statements for unusual charges. CHECKING YOUR CREDIT REPORT on a regular basis can help you react quicker to fraud or identity theft.
**Be careful when accessing the Internet in public venues. Unlike home or office WiFi networks, there are a large number of WiFi spots that do not encrypt the data being transmitted through them. Your email, bank account, and credit card information could be fair game for a hacker with the right skills. Never share personal information with a stranger on social media sites and try to limit the personal information you share with your friends.
**Don’t carry information in your wallet or purse that you do not need. Birth certificates, Social Security cards, PIN numbers and passwords can be easily stolen. Identity thieves can be long gone before you become aware of any missing information.
**Shred documents with personal information before you throw them away. Identity theft crimes are usually thought of as being high-tech in nature. There are still identity thieves who do not mind foraging through a dumpster for valuable information.
Think You May Be a Victim of Fraud?
IF YOU suspect you are a victim of identity theft or fraud, you may want to consider adding a 90-day fraud alert to your credit report. A fraud alert warns lenders that you may be a victim so they can take additional steps to verify your identity before approving a loan application. Immediately inform creditors when you suspect or have proof of fraud. Take time to document every contact. Make sure you thoroughly understand the process of reporting fraud and what is expected of both you and the creditor.
Preventing credit card fraud takes awareness and effort. Protecting your personal and credit card information is probably one of the most important steps you could take to prevent Credit Card Fraud.
For more information or if you have been a victim of Credit Card Fraud, Contact Nationwide Credit Clearing