Protect Yourself From Credit Card

By now, most savvy credit card users know to carefully review their bill each month for any unauthorized charges. Scrutinizing you credit card statement for unusual activity can alert you to the activities of fraudsters who have improperly gotten hold of your account information, since even the most careful consumers may have their financial information stolen.

One way thieves are trying to sneak unauthorized charges past credit card users is through the use of smaller transactions. Realizing that major charges will jump out when cardholders examine their credit card bill, thieves hope that lesser amounts (particularly when they appear on lengthy statements) will sneak past the eyes of watchful consumers.

A single thief may place these small unauthorized charges, which some people have labeled "spam charges," on the credit cards of hundreds of different people. While a single major charge in the hundreds of dollars may stand out on a credit card bill, consumers may simply be able to write off a smaller transaction, perhaps deciding it was something a spouse or another family member put on the card.

To prevent spam charges, consumers should take all the usual precautions, including only shopping online at secure websites that begin their addresses with "https" as opposed to "http." When using Microsoft's Internet Explorer, users should look for a small yellow padlock icon in a shaded bar near the bottom of the screen. By double clicking on the padlock, surfers will bring up the site's security certificate, which they should check to make sure it hasn't expired and that the name on the certificate matches the name of the company the purchase is being made from.

Additionally, some experts recommend having one credit card that is used only for online shopping, instead of paying with all your different credit cards on the Internet. When shopping for a credit card for online use, consider the range of options available at CreditCardXPO.com, such as low interest, rewards, and cash back credit cards. By using just one card online, consumers will be able to make easily keep track of spending and notice any unusual transactions.

Separately, Internet users can secure their home computers against viruses or by using a spyware detector such as Ad-Aware or SpyBot, which both offer free downloads.

If consumers discover unauthorized charges on their credit card statements, they should be sure to inform their card issuer. Cardholders are not responsible for unauthorized charges -- provided they are promptly brought to the attention of the credit card company.

While it may not be clear how thieves gained access to credit card information, that does not mean consumers should stop using their plastic when buying items online. Credit cards often are a better choice for Web purchases than other payment methods since they provide legal rights, including the ability to dispute payments. Certain credit cards also offer protection such as insurance or extended warranties.

Be Credit Card Savvy When Shopping for the Holidays

Before you step out the door with your credit card in hand for some holiday shopping, take some time to go over both your credit card statement and the credit card's terms and conditions. Such a review can help you avoid irresponsible spending with your credit card and can help those with multiple credit cards choose the best plastic for making holiday purchases.

One of the first things to consider is the credit limit for the credit card you will use for gift buying. Be sure that your credit limit has enough room to accommodate all the holiday presents you plan to buy. You certainly do not want to go over your credit limit during the holiday season. If your credit card balance is near your limit, even a few gifts could be enough to send you past the limit -- and into the world of penalty fees and higher interest rates, the credit card equivalent of a lump of coal in your stocking.

To prevent this from happening, find out the amount of your credit card balance either by looking at a statement or by calling the credit card issuer directly, and compare this to your credit limit. It may be possible to set up an e-mail alert through your credit card issuer that lets you know when you are nearing your credit limit. If you are getting close, you should try to pay off more on your credit card balances in November and December so that your bill in January doesn't end up including any nasty fees or a steeper interest rate.

Another thing to be careful of when using a credit card at holiday time is the danger of finance charges. For shoppers with several credit cards, avoid charging items on plastic with two-cycle billing. A credit card with two-cycle billing allows the card issuer to charge interest retroactively.

To understand two-cycle billing, let's say your credit card has a zero balance at the start of December. During your holiday shopping, you charge $1,000 on that credit card. You then pay $990 in January toward your credit card balance, with plans to pay interest on the remaining $10 on your next bill. However, two-cycle billing will charge interest on the entire $1,000 although you already had paid 99% of the balance on time. As a result, the amount of interest you pay will be significantly higher than it would with single-cycle billing.

Using a low interest credit card can save you from paying more for those holiday gifts, since carrying a balance means you do not get a grace period on new purchases.

Meanwhile, it's good to plan for the possibility that not every gift will be exactly what everyone on your list wanted. It might be hard for your aunt to enjoy a sweater that is two sizes too small, for example. Therefore, hold onto any credit card receipts as well as the original packaging the gift came in to help your friends and family make any necessary returns. Also, remind whoever gets the gift to leave tags on any presents they would like to return or exchange.

And, when making the initial purchase, you should ask about each store's return policy, since some stores may be tougher about returning merchandise, particularly with items that were on sale or seasonal. While a store should post its exchange or return policy, it is not required to do so by law, so asking the salesperson is a smart move. Gift receipts, offered by many stores, can be enclosed with the present to make returns easier.

Separately, if the gift you just bought later goes on sale, you may be able to ask the store for a price adjustment.

Happy shopping!

Credit Card

Credit card issuers will often mail out notification of changes to a card's terms along with the bank's privacy policy. But if consumers don't look carefully, the notice of a change in their credit card's terms could get lost in the shuffle.

The bank may keep you up-to-date on its privacy policy when you open a new account, on an annual basis, or when the privacy policy gets changed. The credit card issuer's privacy policy outlines the ways in which the bank collects and uses your personal information, including data on your income, account balance information, and credit history. The privacy policy likely notes the way your personal information is shared both within the bank and externally -- with financial and non-financial companies alike.

Additionally, the privacy policy regarding your credit card may explain when your information is shared, such as to protect against fraud, when reporting to a credit bureau, and with your consent.

You may have the ability to request that certain personal information is not shared in specific cases. Perhaps you do not want non-financial companies to get a look at your data, or maybe you would rather that certain branches of your bank not have access to sensitive information about you. Still, your request may be overridden by the law and certain information may be exempt from your request for protection.

To exercise some power over how the credit card issuer treats your personal information, you will need to get in touch with them. The bank should provide contact information in the mailing so you can inform them of your privacy policy choices.

While all this privacy policy information is very helpful to the cardholder, you are more likely to be concerned about changes to your credit card terms. "Change in term" notices are often enclosed along with the mailing that provides information on the bank's privacy policy. However, the printed material announcing a change to your credit card terms may be easily overlooked if you think the letter only contains privacy policy information.

An issuer may notify you of changes to a credit card's terms involving the interest rate, the events which trigger the credit card's default APR, and various fees.

The notification of a change in the credit card's terms can also offer you the chance to opt out -- that is, the ability to decide you don't want to continue using the card once the new terms take effect. Opting out involves notifying the credit card issuer that you do not accept the changes. You will need to read your opt out information carefully to find out the proper way to opt out.

Opting out of card terms that no longer resemble what you signed up for can be a smart decision. After all, if you applied for a low interest credit card, but the new terms put you in danger of triggering a high default APR, then you may not want to accept the changes to your credit card.

So when you receive a letter from the bank regarding your privacy policy, be sure to also look for information on any changes to your credit card terms.

Credit Card After Bankruptcy

Consumers who have declared bankruptcy may still need a credit card. And, although a bankruptcy filing will appear on your credit report for up to 10 years, this does not mean you necessarily will have to spend a decade plastic-less.

Following a bankruptcy, the length of time until you get approved for a credit card is up to each individual issuer. Whether you get approved or denied for a credit card (along with issues of credit quality and your credit limit) are entirely up to the banks that issue credit cards. As a result, it is possible that you could be approved for a credit card soon after declaring bankruptcy, but it depends on the issuer.

Still, it is likely that any credit card you are approved for will carry a high interest rate and a very low credit limit, based on the credit risk you appear to present to lenders. Various credit cards for people with bad credit may charge an annual fee, as well. But if you want to begin repairing a damaged credit history, responsible use of a credit card could go a long way toward accomplishing that goal.

Get your spending under control. Once you are approved for a credit card, be sure that you use it carefully, perhaps only charging for things like gas and groceries rather than making unnecessary purchases with plastic. As someone who has declared bankruptcy, you should make every effort to pay monthly credit card statements in full so that you don't end up back in debt.

Another payment card option for people who may have had suffered from bankruptcy woes comes in the form of prepaid debit cards. These cards allow the user to only spend up to the total they have deposited in advance onto the card, making prepaid cards an excellent choice for consumers that are looking to control their spending.

Regardless of which type of card you choose, avoid applying for too many cards at the same time. Multiple credit card applications make you appear desperate for credit and can hurt your credit score.

Deciding Which Credit Card is Right for You

Not all credit cards are created equally. And so it makes it that much harder to decide which credit card. There are many factors you should take into consideration when deciding which credit card you want to get.

Some of those factors include:

• Interest rate
• Reward programs
• Annual fees
• Member benefits

Let’s look at these factors separately so you can see how to evaluate which card might be right for you.

Interest Rate
If you pay off your balance every month, most likely a low interest rate won’t matter to you. But most people are not so financially disciplined with their credit cards. Most people do carry a balance.

If you are late sometimes on your payment and carry a balance, then a credit card with a low interest rate is right for you. It could save you a lot of money. As you know, the difference between a 10% and 20% interest rate could be significant if you carry balances for a long period of time. All the major credit cards—Visa, MasterCard, Discover, and AMEX—have low interest versions of their credit card.

Reward Programs
Whether you have a Visa, MasterCard, Discover, or American Express credit card, all of them have reward programs. A popular reward program for most credit cards is a frequent flyer card like the Delta Skymiles Card and the Citibank AAdvantage Card. Both of these cards offer you one frequent flyer mile for each dollar spent. If you travel a lot, then this kind of reward might be exactly what you are looking for. Discover Cards are famous for offering a cash-back bonus on their cards. So, depending on your situation, this may be a card you might want to consider getting. Here is a list of just some popular reward programs that all the major credit card companies—Visa, MasterCard, American Express, and Discover—offer:

• Frequent flyer program
• Cash-back option
• Discounts at retail stores or online chains, such as Amazon.com, Toys R Us, etc.

Annual Fees
Although rewards are great, none of these cards come without a price. Some have moderate, while others have expensive annual fees. Especially for people who pay off their balances every month, the annual fee is an important consideration. It might be prohibitive for some people, but not so for others. You should just consider if the rewards you are getting from the card outweigh the annual fee that you have to pay on your credit card. Moreover, there are many credit cards out there that have no annual fees. These might be worth considering if annual fees are your primary concern.

Membership Benefits
Benefits vary on cards. Some offer travel protection, while others offer roadside assistance. These benefits can be useful for your particular lifestyle. So, if you are selecting a credit card, it is important to weigh the pros and cons of its benefits. And it is another good idea to see if you can’t get the same benefits somewhere else for a cheaper price.

So, when selecting a credit card take all these things into consideration. Decide which card fits your lifestyle choices.

Credit Card Receipt Safety

Losing a credit card receipt that shows your full account number and expiration date can be nearly as dangerous as losing a credit card. Anyone with this information on a found or stolen receipt can potentially use your credit card information for a fraudulent shopping spree.

Without the physical plastic, crooks generally must resort to phone or online purchases to commit their fraud with illicitly gained credit card information. However, most reputable merchants require that the 3 or 4 digit security code (printed on the reverse or front of most credit cards) be included to complete a card-not-present transaction over the phone or on the internet. Since credit card receipts don't carry this information, the risk of fraud from their loss is somewhat diminished compared to losing the card itself.

Many merchants now only include the last four digits of a customer's credit card number on the receipt. A prime reason for this practice is the federal Fair and Accurate Transactions Act, which states that receipts for credit card and debit card transactions may not include more than the last five digits of the card number or expiration date.

However, there are exceptions. This section of the law does not apply to receipts for which the only method of recording a credit card or debit card number is by handwriting or by imprint or copy of the card. The act was signed into law in December 2003, and the merchant has three years to comply for machines in use prior to January 1, 2005. The merchant has one year to comply for machines in use after January 1, 2005.

Some states have their own strict laws to protect consumers. Since January 2004, all cash registers and point-of-sale terminals in California must print safeguarded receipts that list only the last five digits of a customer's credit card account number and no expiration date.

Regardless of the protection such laws provide, consumers should still take precautions for themselves. Credit card users must be on guard against thieves known as "dumpster diggers" who sift through garbage in search of financial information they could use to steal someone's identity and commit fraud, as well as criminals who prowl shopping malls looking for stray sales slips and who snatch receipts out of shopping bags.

Until all credit card receipts stop listing full account numbers and expiration dates, consumers should keep a close watch on their sales receipts -- keeping them in a safe place until their credit card bill arrives and making sure to shred or rip up receipts once they are ready to discard them. That same advice applies to bank and brokerage statements in addition to credit card bills, or anything that lists personal financial information. All such documents should be shredded or torn up before they get dumped in the trash.

Credit Card Fine Print

Credit card offers are well known for having fine print that outlines terms and conditions in language that can be difficult for the average consumer to understand. Unfortunately, it is necessary to be aware of what your credit card offer's fine print explains, because when you sign up for a credit card, then you assume an understanding of what is included in the terms and conditions -- whether you understand them or not.

The fine print must be listed in a credit card offer for legal reasons. The credit card industry includes some interesting clauses in the terms and conditions. And, this trend has increased over recent years, with the advantage going to the credit card industry. Many consumer advocates argue that a rising share of the card industry's revenues come from deceptive tactics hidden in the fine print.

Although certain people may consider some of the clauses sneaky and unfair, they are perfectly legal as long as the card issuer discloses their rights and intents in the terms and conditions. And, by signing on the dotted line, you assume an understanding of what is entailed in the terms and conditions. It is necessary for you to become an educated consumer who fully understands what is included in the terms and conditions of any credit card offer that you apply for.

For starters, you should take a look at the offer's Schumer Box, an easy-to-read table that includes fees, rates, and penalty fines. The Schumer Box was born in March 2004 in response to legislation known as the Federal Truth in Lending Act that requires credit card issuers to include the costs of credit cards in all solicitations and applications and to display them in an easy-to-read format. The Schumer Box format is named for Representative Charles Schumer who spearheaded the legislation in Congress.

The Schumer Box includes:

• Annual fee (if applicable)
• Annual percentage rate for purchases (APR)
• Other APRs (for balance transfers, cash advances, default APRs)
• Grace periods for purchases
• Finance calculation method
• Other transaction fees (for cash advances, credit card balance transfers, late payments, and exceeding the credit limit)

Thanks to the standard format provided by the Schumer Box, comparison shopping for credit cards is easier than ever. Everything in the Schumer Box is need-to-know information for every credit card user.

But there are many more items not included in the box that are also helpful for the cardholder to be aware of. By law these items appear in the terms and conditions of your credit card. While they are not critical to know, they can help you avoid getting into trouble later because you were unaware of certain items.

Some phrases to look out for in the terms and conditions of the contract include:

• "...if the card holder is reported as delinquent on an account with any other creditor, we may increase the APRs on your account up to the maximum Default APR." This is what is known as the universal default clause and acts as a way for the issuer to raise the cardholder's APR for delinquencies on other accounts.
• "Disputes relating to the account are subject to binding arbitration." The inclusion of this phrase in the terms and conditions protects the credit card issuer from lawsuits and class action suits. If the cardholder has any problem or dispute regarding their account, they are limited to an arbitration hearing. The arbitrator is chosen and hired by the card issuer, and the cardholder's legal options are severely restricted. Most credit card offers now include this provision.
• "Balance transfer fees are added to the purchase balance and are subject to the APR for purchases." This phrase states that the fees you pay for a credit card balance transfer are added to your any balances from purchase activity and you are charged interest on this combined total.
• "The Introductory APR does not apply to Bank and ATM Cash Advances." Generally, a higher cash advance APR is applied to these balances.

Credit cards that are described as "fixed-rate" contain information in the terms and conditions explaining that going over the limit can automatically change the rules to your account by significantly boosting your interest rate.

When a card is said to use double-billing cycles (or two-cycle billing), this means that the interest is calculated on the balance you hold over the two prior months, as opposed to being calculated on the average daily balance for one month. As a result, consumers end up paying more interest or finance charges on credit cards that use double-billing cycles.

Meanwhile, although fees are usually defined in the Schumer Box, they are generally easy to read and compare to other offers. Fees can add up quickly, so it is very important to know what types of fees are associated with each card offer you are considering and the amount of each fee.

While reading credit card fine print disclosures is not most consumers' idea of a good time, it can save serious aggravation and money down the line. So, be an informed consumer and make sure you know what's involved before completing an application for a new credit card.

Plastic Offers Benefits Over Paper Payments

Millions of American consumers are opting to pay with a credit card or debit card when making purchases instead of using the more traditional methods of paying by cash or check.

One of the main reasons consumer are paying so frequently with a credit card or debit card is due to convenience. Credit card and debit card payments allow consumers to handle transactions without having to fumble for cash or go to an ATM. Paying with plastic also lets them skip the time-consuming steps of digging through their pockets or purses and counting out exact change. And, with larger numbers of businesses adding the option of credit card and debit card payments, the convenience for shoppers only grows.

Although certain consumers may feel that plastic payments are less secure than the paper variety, some experts feel otherwise, noting that cash or checkbooks are easily lost or stolen. While identity theft remains an issue for credit card and debit card users, these experts note that they still offer more safeguards than with paper.

Credit card and debit card payments also appeal to merchants, who appreciate the assurance of payment. With checks, there is the issue of float time, or the period until a check clears the bank. Float time can be costly for merchants since the money does not reach them right away.

So, while cash may always be king to some people, credit card and debit card use is on the rise.

$1 on Your Credit Card Can Cost You Thousands

A new identity theft scheme puts a charge of just $1 on your credit card, in what is creatively known as the "one dollar scam."

In this new scam, thieves buy hundreds of stolen credit card numbers, then put a $1 charge on each of them. But is the next step in the scam that really earns the crooks some cash.

Should you be one of the unlucky hundreds of cardholders who ends up with a dollar charge, and then doesn't notice it, the next month the thieves will bill thousands of dollars of merchandise to your credit card.

The scam works because by revealing who doesn't read their credit card bill carefully in order to pick up on the initial $1 charge, the thieves target unaware consumers. The consumers who don't closely examine their monthly credit card statements are hit with thousands of dollars in charges they never approved.

To avoid becoming a victim of this scam, always consider every charge that appears on your monthly credit card statement. Should you find any questionable charges, do not hesitate to call your credit card company using the card issuer's phone number provided on the back of your card or on your bill.

By remaining a vigilant credit card user, you can prevent yourself from becoming the victim of credit card fraud.

Credit Card Protection Insurance -- What You Need to Know

Your credit card company may offer it under a variety of names. Credit card protection insurance. Credit Shield. Payment protection. Credit safeguard. But no matter what name it goes by, this insurance aims to provide the cardholder with the same thing: security in case unemployment, injury, disability, or death makes paying your monthly credit card bills impossible. By paying a monthly fee (which vary between issuers), if you should lose your job or become incapacitated, your credit card payments are put on hold and interest is suspended, often for as much as two years. This can help keep your credit rating intact during a rough patch, enabling you to remain in good standing with creditors.

But is paying for such a service worthwhile? If you do suffer an unforeseen life event, credit insurance protection can be helpful in preventing your debt from spiraling beyond your control. As with any insurance, credit card insurance needs generally are very specific to a person's life situation.

To understand what your credit card company may offer, consider the four major types of credit insurance: life, disability, involuntary unemployment, and property.

• Credit life insurance pays the balance owed on your card when you die, provided the credit card company is named the beneficiary of the insurance.
• Credit disability insurance covers the minimum payment due on your card for a specified period following a medical disability, with purchases made after you become disabled not covered.
• Credit involuntary unemployment insurance pays the minimum amount due on your account should you be laid off from work or downsized for a certain length of time, with purchases made after you become unemployed not covered.
• Credit property insurance may be included with your credit card and usually provides payment for items purchased with the card if the items are damaged or, in some cases, stolen.

With disability and unemployment credit card insurance, a drawback is that the payment made by the insurance is just the minimum monthly payment and often for a very limited time frame. Minimum payments are mostly between 2% and 3% of your balance, meaning interest will still accrue on the remaining 97% to 98% of what you owe. If you have more than one credit card, you must purchase separate insurance for each card. Meanwhile, for major illnesses, at the time of the incident you generally must have been employed for a minimum of 20 hours per week. The insurer will sometimes only pay off your minimum payment until a maximum benefit (generally $5,000 to $20,000) is reached or you return to work, whichever happens first.

Should you suffer a critical illness or death, the insurer will pay off your entire balance, saving your family members from having to make payments. In such cases, coverage may be limited to major afflictions. Once again, the credit card company will only pay up to a maximum benefit (generally $5,000 to $20,000).

Prior to signing up for credit card protection insurance, ask your card issuer the following questions:

• What situations will the insurance pay for and which ones will it not cover?
• Will the insurance cover a spouse or other supplementary cardholder?
• Can you choose to purchase just one or two coverage options or do you have to purchase all of them?
• What are the requirements for each policy -- such as if you miss a payment or your account is not in good standing when you file a claim?
• Do age restrictions exist for life or disability insurance?
• What does the insurance cost annually, and how frequently can rates go up?
• How can the policy be canceled?

Before purchasing credit card or any insurance, be aware of exactly what you are getting and what it will cost over time.

Although your case may be covered depending on your situation, for many consumers credit card insurance is expensive and rarely pays off. Enrolling in credit card protection insurance effectively boosts your annual percentage rate. A premium is charged on a monthly basis, and is calculated by multiplying a set fee by your outstanding balance. Even if you lose your main income stream, secondary money from savings, investments, or other coverage (such as your employer's disability insurance) could help you make the minimum credit card payment. And hold on to any documents proving your illness, as you will have to include it with your insurance claim.

Additionally, be careful if you get a call from a person claiming to offer credit-loss protection from your credit card issuer. Many scammers use this technique to get you to provide your credit card number and expiration date by claiming they need this information to issue the insurance. You do not need credit-loss protection in most cases, since the cardholder is only held accountable for the first $50 of fraudulent charges made with their plastic and only then if they do not report the loss to the issuer in a prompt manner.

How the Federal Reserve Impacts Your Credit Card Interest Rates

You may notice that the interest rate on your credit card changes after the U.S. Federal Reserve makes one of its announcements regarding a change to the federal funds rate. In fact, most of the shorter-term interest that consumers pay are tied to the Federal Funds rate -- the target interest rate for overnight loans between high credit-worthy banks.

The U.S. central bank establishes the target rate during the Federal Open Market Committee's eight regularly scheduled annual meetings. The rate is labeled a "target" since actual rates paid are set by the market.

In November 2006, the Fed Funds target rate stands at 5.25%. However, in late October, the "effective" daily Fed Funds rate was reported to have varied between 5.23% and 5.26%, even as the target rate remained unchanged.

Banks use the Fed Funds rate as the benchmark to set their prime lending rate, which is the rate they charge their best customers. Generally, the prime rate is 3% higher than the Fed Funds rate, with the current prime rate at 8.25%. This difference, called the spread, happens because lenders are not willing to loan riskier consumers money unless they are paid more to take on that risk.

The amount of the spread is partially based on the borrower's creditworthiness and whether the loan is secured. An unsecured credit card loan has higher rates compared with a home equity loan, where a bank can repossess your house if you do not pay. With an unsecured loan, like borrowing with a credit card, if you have no money to give the lender, then they cannot get anything from you.

Should you have an excellent credit rating, you will likely get a credit card with a much lower interest rate than someone else who has a fair or poor credit rating.

Meanwhile, when borrowing money via mortgages and car loans, supply and demand factor in to your interest rates, with rates possibly declining when demand for something falls.

Taking Your Credit Card on a Holiday Getaway

The holiday season around Christmas and New Year's is a popular time for American families to get away for a while and go on vacation. If you are looking forward to a little holiday trip of your own, a credit card can be the best and safest way to pay for various travel costs. Even so, it pays to take some precautions when traveling with plastic.

For overseas travel, vacationers will want to choose a credit card that is widely accepted. Looking at a guidebook for the region you plan to visit can give you an idea of which credit card to bring along. Choosing a credit card from American Express, Visa, and MasterCard is generally a safe bet, since they are the most widely accepted.

But even if your credit card is accepted abroad, there may be foreign transaction fees involved in making payments overseas. In fact, some banks even add fees to a bill when the merchant conducts the transaction in U.S. dollars. To find out how your bank treats credit card payments outside the U.S., give them a call before you leave for vacation.

Although you may have been aware of fees your bank charged in the past, a number of issuers have made changes to when and the amount of fees levied on foreign transactions. If you want to avoid foreign such fees altogether on your trip, a Capital One Card may be a good choice, since the issuer does not charge foreign transaction fees.

While you are on the phone with your credit card issuer, let them know of your vacation plans. If you fail to update them, the unusual card use may get flagged and cause them to block further charges, since the issuer may think that your credit card or account data has been stolen. Although it is easy enough to give the issuer a ring if such a shut-off occurs, it's better to avoid the hassle of calling while on vacation by taking precautions in the first place.

Also, you should get a phone number to call in case your credit card actually gets stolen, since the 800 number you currently have likely will not work outside the U.S. And, find out how the issuer will get a new credit card to you wherever you are traveling should you lose your plastic or have it stolen. Often, the issuer can have a new credit card couriered to you with a day or two.

Separately, double-check your credit limit and card expiration date before you leave. It could really foul-up your trip to suddenly discover that you are unable to pay for various vacation expenses once you are on vacation.

Shortly before you leave, it is a good idea to store your credit card account numbers somewhere safe, such as a password-protected location on the web, in case your plastic is lost or stolen while away from home. Another idea is to carry credit cards from more than one bank, with the second credit card acting as a back-up should anything happen to the first. Choose a back-up credit card from a separate bank, just in case the first bank shuts off your credit for any reason.

While on the vacation, try and stick to using just one credit card, which will make it easier to budget and to keep track of all your spending when you return home. A credit card is safer than cash in case you are robbed, but it still should be stored away in a hidden place like a money belt.

As you make payments, hang onto all the receipts from your vacation spending. That will make it easy to ensure there are no unusual charges when you get your statement, since you do not have the same rights to dispute charges made while abroad as you do back in the U.S. And, in case anything crops up later on a credit card statement, hang onto receipts from foreign countries for longer than usual.

Meanwhile, if you decide to pay with a credit card at a given location, first make sure the restaurant or merchant accepts the plastic in your wallet. While some foreign merchants may proudly display a given credit card insignia, taking that credit card may be an entirely different matter. Therefore, it pays to have a little extra cash on hand just in case you find out you cannot pay with your credit card when the bill arrives.

Also, be mindful of double billing when reserving a hotel or rental card with your credit card if you then decide to pay in cash. If your are charged twice but don't have your cash receipt as proof of payment, you will be out of luck. Instead, it is generally better just to pay with the credit card number the hotel or car rental agency already has on file.

Another thing to be aware of is when paying a restaurant tab with a credit card and leaving a cash tip, a dishonest waiter could fill in the space on the receipt for adding on a tip. To avoid this, you can note in the space provided that the "tip is one the table," or a similar remark, to prevent an additions without your consent.

Although there are some issues to be aware of when making payment with a credit card on vacation, you are still afforded a level of ease and protection not offered when using cash, a debit card, or check. Furthermore, with all the exercise we give our credit cards during the rest of the year, don't they deserve the chance to travel at holiday time?

Origin of the Credit Card

Do you know where your credit card comes from -- beyond the return address on the envelope from your card issuer? The approximately 2 billion credit cards in use today across the globe have an interesting history.

The idea of a credit card is not new. In fact, mentions of credit cards can be found from 1890, when some European merchants offered a credit card as a perk to better customers.

Still, the origin of the first wide-use charge account dates to the late 1940s, and is attributed to New York businessman Frank McNamara. The story goes that in the fall of 1949, McNamara went to pay the bill after entertaining a client at Major's Cabin Grill, only to realize he had left his wallet in another suit.

Luckily for McNamara, his wife was able to save him from potential embarrassment. But he continued to think about what happened and began to consider why a businessman could not freely spend what he could afford instead of just the cash in his wallet.

Fast forward a few weeks, and McNamara was sitting down with his lawyer, Frank Schneider, to discuss the details for a relatively simple idea -- a club of diners who would be able to sign for their meals at certain restaurants and then settle the bill at a later date. As his idea became a reality, McNamara enrolled 27 establishments in his plan, also offering $3 memberships in his diner's club to 200 friends and acquaintances.

McNamara and Schneider became the first diners to say "charge it" when they sat down to a February 1950 meal at Major's. The credit card industry recognizes the importance of this meal even though the Diner's Club card was not technically a credit card, since Diner's Club members were expected to settle their bills each month.

With 20,000 cardholders by the end of 1950, the Diner's Club was an instant success. By 1952, franchises has been set up on Canada, France, and Cuba, and in 1955, Western Airlines became the first air carrier to take payment by the Diner's Club card.

On the heels of Diner's Club, American Express introduced a card in 1958 for paying entertainment and travel costs. The next year, Bank of America issued a "revolving credit" card that could be used for a greater range of purchases and paid off over a longer period of time, with interest. But due to federal banking regulations, the card was only valid in California.

In 1966, Bank of America started forming licensing agreements with other banks that allowed cardholders in different states to charge purchases. The same year saw 14 other banks unite to create Interlink, a bank card processing agreement that allowed them to share credit card transaction information.

One year later, in 1967, four California banks established the MasterCharge program. Twelve years later, the program was renamed MasterCard to compete with the BankAmericard program (which was itself renamed VISA in 1977).

In 1981, the Diner's Club was purchased by Citicorp. Still, the origin of the credit card industry can be traced to Frank McNamara's innovation, which allows members to make payment for a purchase at a later date.