Why you should teach your child about paying with plastic?

When you think about what to teach your kids about money, chances are that credit cards aren’t high on your list of necessary lessons. In fact, many parents would just as soon not teach their kids about paying with plastic. However, well-intentioned that approach might be, the reality is that your child probably needs to know how to interact with plastic if he or she is going to grow up to be able to handle money appropriately.

Help your child understand debit and credit

You don’t need to encourage your child to use credit cards and get into debt in order to help him or her understand the appropriate use of plastic. It’s a good idea to approach the subject, though, and let your children know that there is a difference between debit and credit, and that they should avoid debt. Introducing them to plastic during their teen years can help them prepare for a world that increasingly does not make use of cash or check.
Talk about the difference between debit and credit. When you swipe the card, it comes from money you already have. Also talk about how credit is different; it’s a loan. You are using money you might not have. In either case, the important thing is to encourage your child to keep track of what he or she spends using plastic, and encourage your child only to spend money he or she already has.
                        

Learning to manage plastic

If you can get your child a debit card attached to a joint checking account, you can begin to help him or her learn to track his or her spending while using plastic. Because spending with plastic (whether it’s debit or credit) tends to encourage less mindfulness, getting your child in the habit of tracking spending is a big step forward.
In some states, you can get a debit card for your child when he or she is 16 years old, as long as it is for a joint account. Other states and banks, though, may not let minors get debit cards. If this is the case, a prepaid debit card isn’t a completely terrible idea. Look for a card that doesn’t charge outrageous fees. 
When your child uses any sort of plastic, make sure that he or she records what is being spent. You can use pen and paper, or you can use personal finance software on the computer. I’ve already got an account set up for my son in our personal finance software so he can see where he stands, and keep track of where his money is going.
Plastic (or, more likely, payment via cell phone) is the wave of the future. Teaching your children to manage their money in a world where they aren’t likely to count out cash is an important skill. That way, they can learn to pay attention to spending, and avoid the pitfalls of plastic later.

Visit- www.cibilconsultants.com
Source: Secondary

Borrow responsibly !

Whatever you want, you can avail instantly with the help of loans.  But, wait! Have you ever thought that if loans have made our life much simple, then why so many borrowers spiral into debt traps which is making their life severe?  The reason is – ‘borrowing more than you can afford’. Here’s a sneak peek on lending basics for guiding you aim at your goals with the help of borrowed money.

Three essential goals are to be kept in mind. First, don’t borrow more than you can comfortably handle. Second, minimize your borrowing costs by maintaining a good credit score and favoring secured loans. Finally, before retirement, you should strive to be debt-free.

Unsecured debt

Lenders grant unsecured credit without requiring anything from you as security. There is a considerable amount of risk on the lenders part, because if you fail to pay, they have to take legal action to recoup the money they lent. This is why unsecured credit generally carries a higher interest rate than secured credit. However, if you have proven yourself as a good credit risk by having a long history of borrowing and repaying money responsibly then the interest rates can be appealing.

Most people consider having one or more credit cards, which are another form of unsecured borrowing. The interest rate is often high. Indeed, while credit cards can help you manage your monthly expenses; try not to carry a large balance on a regular basis. If you find it hard to control your credit-card spending, consider a debit card instead, where money is taken directly from your bank account. That may make you more careful about your spending.
                   

Secured loans

With secured credit, an asset (called collateral) secures the loan. Due to this security, the lender assumes minimal risk – if you miss a certain number of payments, they can take the collateral. The lender doesn’t have to go the expense and hassle of taking you to court and winning a judgment before foreclosing on your home or repossessing your car.

If you need to make major home repairs or update your house, you might take a mortgage, which is another type of secured borrowing. Interest rates for home-equity loans are typically low, and you can usually deduct some of the interest from your income taxes. Remember, though, that these are secured loans – if you can’t meet the payments, your home is in jeopardy. Secured credit cards allow you to begin in the world of credit. All you need to do is put down a small deposit as security and you can start charging – and building a positive credit history.

Don’t ‘borrow beyond means’

Irresponsible borrowing can not only put you in trouble but can also make your family members’ lives difficult. If you plan to apply for a loan, particularly a home loan, make sure to only borrow what you need and can repay. Most people will want to be debt-free by retirement. While you may borrow a fair amount in your earlier twenties, you should be looking to pay off debts in your fifties, so you’ve eliminated any loans and the associated monthly expense by the time you quit the work force.

The lender will likely to check your credit score, when you apply for a loan. A higher score will increase your odds of getting the loan and may also mean a lower rate. Because your credit score is so important, you may want to head off unpleasant surprises by reviewing it yourself.

It is incredibly easy to take on more debt than you can afford. Whether the balance is secured or unsecured, the consequences for falling behind are severe. However, if you borrow wisely, you can come out ahead and achieve your financial goals quickly and affordably.

Source-secondary

Debit Card OR Credit Card?

If you’re looking for the convenience of a credit card but don’t have the credit to qualify for one, or want to avoid incurring any debt, a prepaid debit card might be the best alternative.

Prepaid Debit Card vs. A Credit Card
A prepaid debit card is a smart way to budget money since you’re required to pre-load funds onto the card before using it. Once the money’s gone, you either have to stop spending or reload the card’s balance.
However, with a credit card, anything you charge to the account will have to be paid off, making it a lot easier to get into debt. Research has shown that it’s a lot easier to overspend using a credit card, while a prepaid debit card is like spending your own cash.
Here are three reasons to consider using a prepaid debit card instead of a credit card.
                                       
                                                   

1. Allows you to earn cashback. 

One of the biggest reasons that many people prefer to use credit cards over prepaid debit cards is because they can earn cashback or rewards on all their purchases. However, many prepaid debit cards allow you to earn the same perks without having to charge up debt on a credit card.

Credit Card Information

Use your prepaid debit card for all your daily purchases and keep track of the rewards you’ve earned. Nearly all prepaid cards are accepted everywhere that regular credit cards are, so there’s no limit on where you can use them.

2. Has much lower fees.

Credit cards come with a wide variety of fees, including late charges, high interest rates, and over-the-limit fees. Some even come with an annual fee you have to pay in order to simply use the card.
Prepaid cards do not come with any of these fees, and may only have small monthly fees or ATM charges when withdrawing cash. You’ll never pay an interest charge, or late fee (because there are never any payments due). 

3. Make safe and secure purchases online.

Whether you’re doing some online shopping, or need to pay bills online, a prepaid debit card makes it easy, safe, and secure.
In some cases a prepaid debit card can be considered more secure for online transactions than a regular debit card. It’s not connected to your bank account, so you don’t have to worry about your account number being compromised, or having your identity stolen.
While credit cards do have their perks, like allowing you to build credit, there are many other disadvantages to them. If you have some credit card debt, or have trouble overspending, a prepaid debit card is smart way to help keep your finances on the right track, while avoiding high interest rates and fees.
You can keep more of your money, not overspend, and even earn cashback on everyday purchases. For these reasons, using a prepaid debit card is a win-win.
Looking for the credit card that’s best fit for you? Find one that matches your needs and credit history.

Visit- www.cibilconsultants.com
Source: Secondary

Fraudsters evolve new methods says, Cyber Crime reports

MUMBAI: Cyber crimes on debit or credit card usage have more than doubled as fraudsters evolve new cloning methods to stay ahead of banks which are improving security features with chip and pin cards, according to preliminary industry data. 

The number of such crimes has increased by about 125% since a year ago, a senior official from the National Payments Corporation or NPCI, a settlement platform for e-payments, told ET on condition of anonymity. 

Every month there are up to 50 cases of travelers who have used their cards in smaller towns and when they leave it gets swiped again even though they are carrying their original card, according to data provided by cyber crime experts. 

"The rate of cyber crime on debit/credit card usage is tremendously rising at the national level," said Rakshit Tandon, Director - A&R Info Security Solutions & Advisor- Cyber Crime Unit, Uttar Pradesh Police, Agra. "Awareness about security measures is abysmally low from both customers and banks. People are falling victim either of cloning or identify theft." 

On an average there are about between 40 and 50 cases compared with between 10 and 12 cases Tandon had to deal with every month two years ago. 

It was not a joke played out on April 1, when Delhi's Santosh Pandey had read six cash withdrawal texts on his mobile phone in the morning wiping out Rs 80,000 in just five-ten minutes during midnight from Navi Mumbai ATMs, the place he has not visited even once in life. 

The country's largest lender, the State Bank of India BSE -0.73 %, will shortly make two security mechanisms fully operational: a one-time password or OTP and SMS card block facility with a brief narration. Besides, SBIBSE -0.73 % is set to run a media campaign on do's and don'ts for a customer to protect the person from any cyber attacks. 

"We have been running extensive campaigns to create awareness among customers and will pace it up. We are compliant to all RBI guidelines in this regard," said SBI's Pulak Sinha, general manager (payment solutions). The bank keeps on receiving complaints of debit card cloning, he said. 

NPCI runs a system called Fraud Monitoring Solutions where 45 scenarios have been fed to detect any possible manipulation. "It will decline transactions in such scenarios. Cloning related frauds are on the rise," said the NPCI official on condition of anonymity. But this will not trace transactions where debit cards are used within the parent bank's ATM network. 

Most of us are using debit cards encrypted with black magnetic strip on the flip side, which can easily be cloned unlike a chip-enabled card. "The entire industry hardly has one or two percent cards with chip and pin. This will not expand unless it is mandated by the regulator," said a head of a public sector bank. 

Here's how some ploys work: 

A cyber swindler typically uses skimmers, a device to take image of your cards. There are several innovative ways to use such tool. This mostly happens with travelers. 

For example, a customer uses card to pay her bills at restaurants, bars, hotels and malls. Now, a person with malicious intentions, will drop her card deliberately and bent to pick it up when the skimmer planted on his shirt pocket will take images within fraction of seconds. The same image is transferred to personal computer and then, given to manufacturers to get a duplicate card. 

For password, fraudsters take the help of "shoulder surfing", where one can trace password closely observing finger movements standing just behind user's shoulder. 

Similarly, a customer leaves potential space for skimmers when he gives his card to a third party at a petrol pump to pay bills. 

The most latest con game is that some glue is put below the key pad at ATMs so that the circuit does not function properly even if you press button but the ATM can read your card data once it gets swiped in the machine. Later, when you exit from ATM terminal, the prowler will immediately enter the same and remove the glue and will receive the desire access but for only one time. 

Con men can also get your card data cloned from the ATM slips, which almost every user drops at dustbin without destroying it completely.

To learn about Identity Theft visit www.cibilconsultants.com
Source: Secondary

Youth Alleges Credit, Debit Card Fraud

Some online fraudsters celebrated Diwali at the expense of a victim this year. A youth has filed a complaint for cheating, saying that somebody used his credit card and debit card details to shop online. Police have sought the details of the transaction from the service providers.

According to Vastrapur police, Sumit Swapnil, a resident of Jigar Apartment in Bodakdev, filed a complaint that somebody used his credit card to buy goods worth Rs 37,450, and his debit card for goods worth Rs 40,690 from web portals. Both transactions took place between 2.30 pm and 2.45 pm on Tuesday.

M K Rana, inspector of Vastrapur police station, said that in total, Swapnil has filed complaint for cheating of Rs 78,140. "He said that the cards are with him and he had not lost them in the recent past. We are thus working on two theories - either somebody stole his data online when he was conducting transactions himself, or somebody got the details when he swiped his cards physically. We have sought details from the service providers to ascertain the identity of the buyer or get leads," he said.

City crime branch officials said that cases involving misuse of credit cards has reported a 20% rise from last year. "Sometimes, banks settle cases when security glitches are reported, and thus the numbers may not reflect an exact picture of online crime," said a senior crime branch official.

Learn about identity theft at www.cibilconsultants.com

Source- Secondary

Beware! Identity Theft can ruin your reputation !

One out of every five people worldwide is on a social networking website and your identity and reputation are at RISK without you knowing it!

Technology makes our lives more convenient! But with increasing convenience and information flow, it also makes us vulnerable. Growing urban population and ever evolving technology poses a challenge and makes fighting cyber crimes and imperative. 

Our personal information e.g. name, date of birth, addresses, phone numbers, email IDs etc as well as sensitive financial information is pervasive and can be easily accessible online and offline.

And it is not difficult to foresee how such easily available information, can be used to commit the simplest form of identity theft and fraud, such as pretending to be someone else and taking a mobile phone connection, or opening a social network profile or even re-directing someone bank and card statements and bills to another address. And the internet makes access to personal and financial information simpler!

One out of every five people worldwide, are on a social networking website. With internet penetration in India crossing the landmark 100 million mark, Indian netizens are hopping onto them as well with equal gusto. Facebook, Linkedin, Google+, Orkut are pervasive today, especially amongst the young educated population of India. And it is an established trend for people to take risks online. 

People often play with their online identities in a manner that they would never dream of, in the real world and this puts them at RISK for identity and online reputation thefts – says Asgar Patel victim of online reputation slander and he added – Beware yourself of too much online exposure.

For those uninitiated on how ID theft can happen, in the online world there are numerous website where your personal information is lying without your knowledge and in less secure environments, for fraudsters to misuse it, to their advantage. From crude methods to well organised scams, identity theft, online reputation slander works in a range of ways.

Taking a case in point, wedding is a big business proposition in India. Burgeoning Matrimonial websites in India have a have great business potential, however, these websites are a goldmine of personal information and most members might find themselves becoming victims of Identity thieves and fraudsters. Matrimonial websites tend to attract young men and women across the country and users create personal profile replete with information based on nationality, age, gender, religion, economic standard, job status, height, family background, and photograph. With this sensitive personal information, fraudsters can cause considerable damage be it to damage someone’s reputation or financially by buying a phone connection or procuring a credit card pretending to be someone else, with the information they have access to. 

And the victim would not know about it until it’s too late! As per a news article, an accused terrorist confessed to have obtained SIM cards with forged papers created by gathering information on a matrimonial website. Stealing an identity is, unfortunately, surprisingly easy to do and happens when one least expects it! Protecting oneself is therefore very important. 

If someone’s identity is stolen, it can take months or even years to recover from the disorder they leave behind. The number of new cases of identity theft is on the rise. This relatively new trend is the result of internet’s influence, by easing access to sensitive personal information.

>> There are 112 million claimed Internet users in India, source ComScore; Internet in India, 2011

>> Credit and Debit cards can be applied for in the name of another individual

>> Fraudulent bank loans could be taken out in the name of the victim

>> Phone connections can be taken to carry out forgery and other frauds

>> A multiple range of debts can be incurred in victim’s name

>> Email ids and social networks profiles can be created using false information

>> The information can be used in various illegal activities in victim’s name

>> Illegal acts can be performed by applying for new driver’s licenses or passport

CPP offers these warnings to help people stay safe and protect themselves. Most identity theft victims don’t come to know of the fraud until long after the incident. They dismiss possible indicators as mistakes or mix-ups and take no corrective measures like:

Unexpected verification call from a bank or a service provider

>> A warning or notice from a bank or service provider

>> Unexplained entries in your Credit Report

>> Debit of small amounts in bank statements

>> Unfamiliar purchases in your card statement

>> Receiving a statement or bill for a service you don’t have

Act Fast or Get to the Point Of No Return:

>> Do not disclose your personal details beyond what is essential, online or on social networks.

>> Do not respond to suspicious emails asking for your personal details and never disclose your bank, credit/debit card details and PIN numbers to anybody online or offline.

>> There are 112 million claimed Internet users in India

>> Ensure you use adequate updated antivirus software.

>> If you receive a request from a friend or family member stranded while on holiday asking you to transfer money to them, contact them by phone or alternative contact to verify the request is genuine before sending any money or providing personal details.

>> Regularly check your credit card and/or bank statements to ensure that suspicious transactions are detected.

>> Shred all documents containing personal information, such as credit card and bank statements.

>> Log directly onto websites you are interested in rather than clicking on links provided

in an email.

>> Read your credit report from time to time to track any suspicious changes.

Identity theft can have grave, sometimes devastating repercussions for its victims, ranging from financial loss, damaged credit ratings to loss of reputation. In a time when more and more information is being shared online, the security of personal information is very important. 

Be careful with your personal information, since becoming a victim of identity theft can take months and even years to straighten out!

Learn more about identity theft at www.cibilconsultants.com

Punching card PIN at shops may prove to be risky

As per the guidelines of the Reserve Bank of India (RBI), effective from December 1. The debit card holders will have to punch in their personal identification number (PIN) every time at Point-of-Sales (PoS) at merchant outlets to minimize frauds.

But many bankers as well as merchants in the city pointed out that this is far from fool-proof and the system has an alleged drawback of lack of privacy.

First, the debit card holders will have to enter the PIN of their ATM cards in the swipe machine and then sign on the transaction slip, for any purchase at any shop.

This may prove to be risky, as thieves may misuse the system by keeping an eye during the swipe, memorize the PIN, clone the card to easily withdraw large sums of cash from any nearby ATM .

But it has been found that none of the merchant outlets in the city have made arrangement for privacy of the customers while punching the ATM PIN while purchasing goods.

Glenn Serrao, the son of a hotel owner in sector 17, Vashi, said, "Debit and credit cards are accepted only on the first floor of our restaurant premises. Around 80% of our regular customers do not mind revealing their PIN to the waiters, who in turn, swipe the cards to pay the bill and issue the payment slip for the customer's signature. If any customer demands privacy to punch their PIN, then we will surely provide that service."

Pradeep Kumar, the manager of IDBI bank, Vashi branch said, "Logically, due to lack of privacy at shops, there is a possibility of misuse of the system. Now, to resolve this alleged lacunae in the customer service, our bank will suggest to our product team that the shops need to provide a secluded place for the ATM card swipe machine which should offer adequate privacy for the customer while punching his/her PIN." The product team will then forward the suggestion to the RBI authorities for corrective measures in the guidelines.

"Anyone who thinks that this system can be misused by miscreants, should come forward with their suggestions on the RBI's website, as well," added Kumar.

Susaant Patnaaik (41), an LIC consultant said, "The need for privacy to use one's debit or even credit card is a must. The swipe machine should be kept separately near the establishment manager's counter and be hidden by a partition to prevent onlookers from reading the secret digits being punched by the customer. "

Patnaaik also said that the banks have warned their ATM debit card holders not to read out or enter their PIN when someone is standing behind them.

"One must never swipe in front of any onlookers to ensure the safety of their card," he added.

Learn more about identity theft at www.cibilconsultants.com

Source: Secondary

Credit card frauds takes play this way

Recently, credit card frauds made front page headlines. In some cases, the credit card of someone in India was used in the US, despite the fact that the card was with the customer in India.

Though fraudulent transactions are reported on lost or stolen cards, the factor contributing the most to fraudulent transactions is duplication---copying the data on the magnetic strip in a card, when it is used for a valid transaction.

So, does this mean you should stop using your card? No. Come July, cards with an embedded chip and a compulsory PIN (like that used for ATM transactions) will be made mandatory in India. This would make your credit card transactions more secure.

Till then, here are a few things to keep in mind. If you do not use your credit card much, reduce its credit limit. Most banks have this facility. The original limit can be restored whenever you need it. If you need a higher credit limit, split the amount by taking multiple cards from the same bank. If the bank doesn’t allow this, take a card from another bank as a back-up and reduce the limit on the card you use frequently. Memorise and scratch out the three-digit CVV (card verification value) code on the back of the card. Note down the bank’s call center number, as well as your card number, and carry this with you. This way, you can block a card whenever the need arises.

When abroad, keep your India number in use, even if you are using a local number. This will allow access to text messages from your bank. Ensure you read all messages sent by the bank carefully and promptly block the card if any transaction is not authorized by you. Avoid using credit cards outside India, as such transactions are expensive (3.5 per cent foreign exchange surcharge is levied on all foreign exchange transactions) and the card is prone to duplication in certain countries. Instead, use foreign exchange debit cards or traveler's cheques.

Online frauds

Using credit cards online has become more secure after the Reserve Bank of India mandated an independent password, known only to the customer, in addition to credit card details. If you are providing your credit card details on the phone to any establishment, the requirements are more stringent---you have to use a PIN generated specifically on a request through your registered mobile number.

To prevent online fraud, never go to your bank or credit card account online by clicking on links from an e-mail. Save the link to your online account in Mozilla ‘bookmarks’ or Internet Explorer ‘favorites’ if you use these browsers for online operations. Whenever you log on to net banking accounts, use the virtual keypad. This way, even if your computer is virus-infected with a keystroke logger (it keeps track of your keystrokes), your password would be secure.

While using the card at a merchant outlet, use the message facility available on the verification programme. You can enter a message while verifying your credit card for the first time in the ‘verified by Visa’ or ‘MasterCard Secure’ programme, such as “if this phrase is displayed, I will know this is a genuine website”. Use the net card facility offered by a few banks. Through this, while shopping on websites that charge foreign currency amounts on your credit card, banks provide a temporary one-time virtual credit card.

These steps will ensure credit cardholders remain relaxed, even as the regulator tries to make the overall environment more secure.

Learn about how to maintain good credit score at www.cibilconsultants.com 

Source: Secondary

Credit Card vs Debit Card

Credit and Debit Card both are very similar in their usage; the main difference being that in debit card, the money is used from your account where you deposit your money, while in credit card the money is used from your line of credit which you have to repay at the end of each month. So which card gives better benefits than the other? Check the reasons below to find out:

Building Credit Score: 
It is common knowledge how a credit card is very useful in improving and maintaining your score. The only criteria is that you should keep your credit utilization ratio low.While a debit card is obviously not a credit account, therefore it can hurt or help your credit score.

Protection from Fraud:
The liability for fraudulent charges is fixed in a credit card. If your card or card number gets stolen, fraudster cannot steal money beyond a certain limit while in a debit card, the liability is unlimited, depending on how fast the fraud is reported. Your whole account balance is at a probable risk.

Protection during purchases:
During purchases, if you are unsatisfied with the services or products of the seller, the credit card allows you to reverse the purchase charges that have been charged on your card. So that is why in large purchases, even if you can use cash go for a credit card. You can use the cash later to pay off the credit card bill. In debit card, there is no such protection. Money once charged from your account cannot be taken back. Your debit card cannot save you from a poor customer experience.

Perks & Rewards:
Credit Cards offer various perks and rewards for using the card like air miles, purchase points, travel points, gift cards etc. So, even if the credit card does charge you an annual, the rewards would overpower the fees any day. While in debit cards, there are very few cards which can offer such rewards and even if they can offer rewards the rewards aren't of much par with the debit cards.

Source: Secondary