• You take a trip out of state, say driving across the border and fill up your car at a gas station. The card company has no record of you being in that area, and so it flags this as unusual behavior. Perhaps a thief has your card?
• You make a small online purchase. For example, to set up a child e-mail account, Yahoo requires the parent to charge their credit card by fifty cents. My account was frozen when I did this recently, and I had to call the fraud hotline to verify that the charge was legitimate.
• You travel to a foreign country without telling your credit card company in advance.
• You make a series of purchases for things you do not usually by. For instance, you’ve never bought woman’s lingerie. Until your credit card company intuits this new pattern (maybe you recently got engaged) this may put a freeze on your account.

A Frozen Credit Card

For debit cards, the issue is the hold that happens whenever you pay for something with a signature purchase in which the vendor does not know in advance exactly how much your purchase will be, but you can access the service or product in advance of payment. The two most common situations are renting a hotel room or gasing up your car. For gas purchases at the pump, typically a hold of $50 or as much as $75 is immediately put through, meaning you need to have that much money in your card account to avoid having the purchase being denied at the point of purchase. If you logged into your card account after making a $20 gas purchase, for example, you would see the charge as $75 perhaps for a few hours or maybe even a day or two before the actual amount was registered and the difference credited back to your account. For hotels, the “hold” would be much higher to cover a night’s room rate, say $150 or $200.

Susan Stellin writing in the New York Times spoke to a credit card company about the freeze she experienced when buying gas out of state:  

I was surprised that a cheap gas purchase in California could also freeze my account, so I called U.S. Bank to find out if travelers need to start alerting their banks about their domestic travels, which seemed like overkill to me.

It probably is, said Dave Leiker, a senior vice president with U.S. Bank. He told me that besides watching for unusual spending patterns, banks also monitor where criminals use stolen cards, places like automated payment kiosks in metropolitan areas.

“We may have been seeing a trend where the bad guys were out there using stolen credit cards at gas pumps,” he said.

Freezes and Holds on Credit Cards and Debit Cards is a post from: MiCash Prepaid MasterCard

Not paying your bills on time, missing car payments, mortgage payments or rent can all reduce your FICO credit score. Score too low, and your apartment rental application may be rejected. It’s ironic, because in this economy, with many people losing jobs and losing their house to foreclosure or short sales, a flood of first time renters has hit the market. Second, there are other people who have been in the same apartment for a long time but are now finding themselves forced to move to save money on rent, or because they moved to accept a different job or be closer to family (without moving in with them), and thus are filling out apartment applications, knowing that their score has been reduced.

What To Do If you Have a Low Credit Score

If you find yourself in this situation, here are some things to do:

• Request a free credit report from the three major credit bureaus: Equifax, Experian, or TransUnion. Under the fair credit reporting act, you are entitled to a free copy of your credit report once every 12 months. (See FTC government site). Note: your credit report will not reveal your FICO score, which is what lenders and landlords do see when they get your credit report.
• You can get your FICO score for a modest fee by clicking on the banner below.
• Consider that your credit score is hopefully only one factor a landlord looks at in deciding whether or not to accept your as a tenant.

1. Employment and income level verification
2. References from previous and present landlords
3. Eviction records
4. Credit Report

You may be able to increase your security deposit or pay two or even three months of rent in advance to get into the apartment you want with bad credit.

Your Credit Score and Renting an Apartment is a post from: MiCash Prepaid MasterCard

Restaurants that accept contactless card transactions include McDonald’s, Arby’s and Jack-In-the-Box, according to the Smart Card Alliance. Other merchants include CVS pharmacies, Walgreens, Sheetz gas stations, and 7-11.

These quick payments can be used even for small purchases like a cup of coffee. Cardholders are not required to provide a signature for most purchases under $25. Stores and restaurants even don’t have to provide a receipt for these under $25 purchases, unless the cardholder asks for one.  Large banks like Chase have led the charge for contactless payments with their Blink cards that were first rolled out five years ago.

This technology has not been widely adopted by prepaid cards. But that could change as the prepaid card industry adapts to the emergence of micropayments.

Interestingly, the technology now seems to be headed into the mobile phone market. The same microchip can be embedded in a mobile phone, eliminating the card altogether. (But how will the lack of the MasterCard or Visa brand mark be interpreted by consumers?)   What the mobile phone brings is the power to communicate via text messaging transactional data anywhere. This opens up a wealth of applications. But will consumers feel these transactions are adequately secure? (We’ll explain how this works in another post.)

Wave and Pay Contactless Card Debit Transactions is a post from: MiCash Prepaid MasterCard

Flickr image by ztil301

People often want to know what is the best Student MasterCard or Visa on the market today? The truth is, with the new credit card rules now in effect, it is difficult for students under 21 to obtain a credit card without a parent co-signing on the credit card agreement. Students have to have already established credit to get a credit card. A Catch-22 if there ever were one.

So, of course we here at MiCash believe that a prepaid debit card such as the MiCash Prepaid MasterCard is a great alternative for college students who want and need the flexibility that plastic payments provide, without the dangers of going into credit card debt.

Prepaid cards can curb a student’s impulse spending on such things as beer, pizzas, and MP3 downloads (wait a minute, do they even pay for those?). The reason for this is simple. You can make purchases on a prepaid card if you have enough funds in your card account to cover your spending. Unlike writing a check that could bounce if you don’t have enough funds in your account, you can’t get overdrawn. And unlike paying with a credit card, you can’t borrow money that you don’t have. You don’t have to worry about going further into debt and having to make monthly installment payments to pay back the charges. Students will most likely think twice about every purchase and will be more mindful of their personal budgets.

The Best Student MasterCard is Not a Credit Card is a post from: MiCash Prepaid MasterCard

Flickr image by The Consumerist

Now that the New Credit Act of 2009 is largely in effect, credit card companies have to follow new rules meant to protect consumers. These rules make it harder for banks to charge up front fees for “sub prime” credit cards. Thus, banks that want to remain in the sub-prime market (which includes up to 70 million Americans) and retain the profits they are accustomed to are testing new fees and shifting to higher interest rates. One card issuer recently tested a 79.9% annual interest rate. According Blog News Service:

A national bank charging 79.9% interest on a credit card is legal — as long as the issuer fully discloses the terms as required by the federal Truth in Lending Act. Still, the high rate has been met with shock across the country because it is so much higher than prevailing APRs and penatly interest rates. The CreditCards.com Weekly Rate report national average for bad credit credit cards was 14.15 percent on Feb. 12.

Consumers with bad credit who find it hard to get a low interest rate credit card should shop carefully before accepting a card with a very high interest rate. Of course, they do have the option of using a prepaid debit card like the MiCash MasterCard. A prepaid card is not a credit card, so it doesn’t matter if you have bad credit.

Credit Card for People with Bad Credit Hits 79% Interest Rate is a post from: MiCash Prepaid MasterCard

Lazurus finds it horribly ironic that Citigroup’s CEO announced the new fees after expressing his gratitude to taxpayers for bailing out the giant bank at the peak of the financial crisis.

How Citi expressing its gratitude for that act of taxpayer generosity?

It’s slapping a $60 annual fee on many credit cards that previously had no fees and telling customers that if they don’t like it, tough patooties. They can pay off any outstanding balance and take their business elsewhere.

Man, if that’s Citi when it’s grateful, I’d hate to see the company when it’s cheesed.

We agree.

Citi Introduces $60 Annual Fee to Many Credit Card Holders is a post from: MiCash Prepaid MasterCard

Here at MiCash, we keep giving you tips on the best ways to save your funds, fix your budget, protect yourself from having your money stolen, and basically milk everything you have earned for what it is worth. We hope we are not giving you the impression that we are promoting a miserly lifestyle. While it is true that saving up is very important and learning to spend less than what you earn everyday is a good rule of thumb to live by, we are not totally shunning the idea of indulging oneself every once in a while. Whether it’s to reward yourself for doing a job well done or as a way to relieve yourself of stress, splurging can be a good thing. We just have to make sure that actually have the money to splurge.

The Difference between Splurging and Overspending

To splurge is to indulge oneself with some luxury or pleasure, usually a costly one, because you can. If you do not have the cash to spare, you would be overspending, not indulging on your spending power. Overspending is like eating an undercooked meal. You eat it because you are too hungry to wait, and the next day, you get an upset stomach. Many times, we have experienced this: Going on a shopping spree and ending up wishing we did not buy half of the things we just bought, because having a lighter wallet feels too unsettling.

Save Up for your Splurge

Wouldn’t it feel so much more fulfilling when you know you will be able to spend without having any worries? Give yourself something to look forward too. Have a more tangible reason to save up your money than simply to get ready for a rainy day. It is best to put a rough number on how much you want to set aside for your splurge. This way, you can stop yourself from going overboard on your expenses.

Attend to Business before Pleasure

Do not start splurging when you know you still have unfinished financial business to deal with. If you have any bills to pay or debts to cover, attend to them first. The last thing you want is to fall further into debt because you ended up using the money that was supposed to pay for your rent to purchase a coveted pair of boots or a shiny new video game console instead.

Don’t Splurge with your Credit Card

It is easy to overspend with your credit card because you can’t exactly monitor how much you’ve already spent using it. You will just have to surprise yourself when the credit card bill comes in. The problem with this is: What if you find that you don’t have enough money pay for the accumulated credit on that bill? The amount will accumulate interest, and you would be at risk of getting stuck with credit card debt.

To prevent this from happening, keep your credit card tucked in your wallet or card holder during your splurge. Use cash where you can. For large expenses, opt for a prepaid debit card instead for cashless payment.

The Do's and Don'ts of Splurging is a post from: MiCash Prepaid MasterCard

With the holidays over, we have now fallen back to the daily grind. Some of us, due to an excess in year-end indulgences or generosity, have greeted the New Year with lighter pockets and slightly shrunken savings accounts. And you know what they say, “There is no time like the present.” If you want to replenish your savings and acquire more money to spend for this year and further beyond, better start now than risk the fate of having continually dwindling funds throughout the year.

Spend Less than You Earn

This may seem like a simple rule of thumb, but it is easier said than done. Many of us actually have no idea just how much we spend in a day, much less how much we spend in a month. Some of us may have a general idea because of the bills we pay every month, but many forget to factor in daily expenses (e.g. groceries, commuting fares or gas expenses, pet care and maintenance, regular medication costs). Do this, and do not be surprised if you find that your daily and monthly expenses are much higher than what you have expected them to be.

Try to make a regular record of your daily expenses and then plan a budget. Wean yourself off what you would consider unnecessary wants, and prioritize your needs. Living beneath your means is in no way miserly, nor will it make your life miserable. You don’t seriously have to buy a Starbucks venti latte every morning, do you? The bulk of our earnings should be saved rather than burned. This way, not only will our funds get back to their previous state before last year’s holidays, but we will also have enough for that unexpected rainy day.

Choose Cash over Credit

Just because you have one or two credit cards does not mean you should use credit for even the smallest purchases. You can afford to pay in cash after filling up your car with gas, for example, or when you only need to buy a few items at the department store. Using your card too much can lead to credit card debt. There is no such risk with good old-fashioned cash payments. When you do use your credit card, try to charge as little as possible. And when the due date is given, make sure that you will be able to pay your credit card bill on time. See point number one to learn one way to ensure that you will always have money to allot for credit card bills payments.

If you feel more financially secure when you are not carrying a lot of loose cash then a good way to avoid the threat of credit debt is to opt for a prepaid debit card. The main difference between credit cards and debit cards is that the latter only allows the cardholder to spend within the account’s remaining balance. Whatever amount you put into your debit card is how much you can spend using it. It is almost like paying cash, but with the convenience of plastic, cashless payment. Debit card transactions are never charged interest, and there are no monthly bills.

This Year, Say No to Overspending is a post from: MiCash Prepaid MasterCard

January 1, 2010. Today is the first day of a whole new year. It’s time to change those calendars, get used to writing dates with a new set of numbers, and start fulfilling those New Year’s resolutions.

Every year, a good number of us list down one or a few things we wish to change or improve in ourselves on the coming year. It could be anything from losing weight to being more patient with the people at work. If improving your credit scores is part of your list of New Year’s resolutions, here are some tips on how to successfully keep your financial promises this year.

Read and Review Your Credit Reports

Each year, we are entitled to receive a free credit report from the three major credit bureaus (Equifax, Experian and TransUnion). Take advantage of this privilege and use these free credit reports to monitor your credit history. Check the report for any inaccuracies. Striking out any records that are already expired or don’t really belong to your account is one of the easiest ways to improve your credit score. If you are sure there is false or inaccurate information in your credit report, do not hesitate to report it to the responsible credit reporting agency. You can even file a formal dispute. Disputing credit report information is free and relatively hassle-free as it can be done online when you check your credit report.

Get Out of Debt

Whether it’s the two dollars you owe your officemate for buying you a cup of coffee the other day, or the piling stack of unpaid bills you have left unopened and deliberately forgotten under your desk drawer, you need to cough up the money to relieve you of the debt. Your debit-to-credit limit ratio counts for 30% of your credit score. You should aim to carry balances that add up to less than 10% of your total credit limit to acquire the maximum score benefit.

The best way to solve your debts is to set a detailed long-term financial plan that will allow you to reduce the amount you owe while ensuring on-time payments to creditors. This may seem easier said than done but that only depends on your resolve.

Pay on Time All the Time

By improving your payment history, you will be ensuring approximately 35% positive output on your credit score. This is a great deal, especially if you are able to keep it up consecutively and for a long period of time. Establishing a long history of good credit use shows that you are a responsible borrower. This counts for around 10% of your credit score.

Avoid Unnecessary Inquiries

Just as you shouldn’t be too rash to close your old accounts so long as there is a way to salvage it, you shouldn’t be too greedy in applying for new credit accounts. Apply for new credit in moderation and only when you are sure that you want the account. The number of recent inquiries on your credit report counts for 10% of your credit score.

Make Improving Your Credit Score Your New Year's Resolution is a post from: MiCash Prepaid MasterCard

Despite the many advances in e-mail security and online privacy, we still find a lot of scam e-mails being sent into our spam folders. Fictitious deals and unbelievable six-digit cash prizes pop into our accounts without us knowing how or why we were chosen. Sometimes, some of these bogus offers somehow slip into our inboxes. With the growing popularity of mobile phones as lifestyle accessory rather than a personal communication device, even our cellphone inboxes are no longer spared from spam.

We should always be wary of spam mails and messages. There have been many people who have found themselves sucked into the trap of credit card fraud because they unwittingly believed a shady e-mail or text message. Here are a few things to remember to avoid the same fate.

Never Give Your Credit Card Information to Someone You Don’t Fully Trust

This is common sense. Your credit card acts as your virtual wallet. Handing in your name and account number without valid reason is like propping a big neon sign above your bank account that says “Go ahead! Steal me!” If you receive an e-mail or a text message asking you for your personal credit card information, alarm bells should ring. Never respond to e-mails that redirect you to a particular website and ask you to verify personal and credit card information either. You just might become a victim of a phishing scam.

Similarly, never provide your credit card information on a website that is not a secure site. While there are many online stores and service providers out there, not all of them are legitimate and certainly, not all of them can be trusted. If you stumble upon an online shop that has a poor layout or provides incomplete information, think twice about purchasing from it. It wouldn’t matter that you bought the cheapest product online if you find that technological burglars have infiltrated your credit card account because of it. You will know you are transacting with a secure website if the online store utilizes security features such as SSL (Secure Socket Layer), which encrypts your purchase information so hackers and Internet thieves won’t be able to get to them.

Just Avoid It

Whenever you shop or surf online, you will encounter offers to e-mail subscriptions about future promos or campaigns. Even if it’s from a website that you trust, if you visit it frequently anyway then say no to the subscription offer. None of us want any clutter in our inboxes, so let’s not encourage it by signing up for automatic messaging services we won’t bother addressing. Sometimes, stores add you to their mailing list without you knowing because you gave them your personal information. If you feel irked from getting their spam mails, it is not impolite to ask to be removed from the mailing list.

Credit card fraud is a felony that is punishable by law. In the same way, we all have a right to protect ourselves from it. If you have any complaints or issues concerning online transactions, don’t hesitate to contact the Federal Trade Commission (FTC) about it.

Say No to Scam Spams is a post from: MiCash Prepaid MasterCard