Protecting Your Credit Cards

When most people think of protecting their credit cards, they are thinking about protecting their credit or credit ranking, not the actual credit card. As a responsible credit card user, you want to ensure you will get the best rates and benefits associated with a strong credit rating. However, it is not enough to safeguard your credit card’s usage. You must also ensure that your credit card and credit card number do not fall into the hands of those who do not care about your financial responsibilities. Do not allow your credit card information to unwittingly reach the eyes of those who see your personal credit card as free money.

To ensure that your credit card remains safe from unauthorized charges, here are a few ways you can protect your credit:

• Don’t give your credit card account number out over the phone without knowing why. – Know who is asking for your number on the phone before giving out the number. Make sure that person is employed by a reputable catalogue company, organization or business.
• Don’t use your credit card on an unsecured Website. – Online purchases are fast and easy. However, unless the Website is secure, your credit card number is at risk for being stolen. Use only Websites that explicitly state they are secure and reputable businesses and for which such claims can be verified.
• Don’t put your credit card account number on the outside of an envelope or on a postcard. – Anyone could see this information. If necessary, include any credit card or account numbers on information inside the envelope only and make sure such details can’t be seen through the envelope.
• Don't sign a blank charge slip. – Always know how much the charge will be and verify the amount from the receipt given to you.
• Get and destroy charge carbons from stores. – When you receive your charge receipt, you should also get the charge carbons from the store. Note: some store use carbonless charge slips nowadays to ensure your credit safety. If the cashier does not give you the carbon, ask for it immediately and then tear it up into small pieces before throwing it away.
• Check your monthly statement. – Don’t automatically pay your credit card bill each month or let it sit on your desk. Open your statement immediately and look closely at each listed charge to verify the amount and whether you actually made such a purchase. If something is wrong, contact your credit card company immediately. This way, you will be able to determine if there was an error or whether any other recent unauthorized charges have been made to your card.
• Cut up old credit cards through the account number. – When you get a new card or close an account, cut up the old card through the account number so it can’t be identified.
• Protect your credit card and pin numbers at ATMs or when using the telephone. – If you use your credit card for cash advances or for long distance charges on a payphone, be sure to stay aware of the people around you. Some credit card thieves memorize credit card and pin numbers from the buttons you push on the phone. Use your body to block anyone’s line of vision.
• Carry as few credit cards as possible. – People with multiple credit cards should only carry a few that they anticipate using. For example, if you carry an emergency card and a gas card, you don’t also need to carry another general credit card like a Visa or a store credit card, unless you plan to go to that store. By being selective in the card you carry, if you happen to lose your wallet or purse, only a few cards are at risk of being misused, rather than all of them. If you do lose a credit card, report it immediately.

Though most credit card companies and banks offer unauthorized protection, ultimately, you are responsible for how your credit card is used. Your credit rating is important, so protect your credit the way you would protect a wallet full of cash. For more information on how to protect your credit cards or on how to resolve problems from unauthorized charges, contact your credit card issuer or your financial advisor.

Your Credit Card May Protect You from Rental Car Damage

As anyone without plastic knows, it can be tough to rent a car without a major credit card. However, the benefit of renting a car with plastic is that you may be able to pass on the collision protection the rental agency tries to sell you, since your credit card may automatically provide this coverage.

The protection sold by the car rental agency is generally known as collision damage waiver (CDW), and is an agreement under which you are not liable for loss or damage provided you follow certain conditions. But at $15 to $25 a day, you may prefer to forego this option.

Luckily, you often can. Even if your regular auto insurance doesn't cover your rental car, your credit card may provide ample protection. Many credit cards offer collision protection, at no additional cost, when you pay with plastic. And, if your credit card covers collision damage, it will also include loss-of-use and towing charges.

For American Express, the rules are similar, with a credit card that covers CDW also covering loss of use. A MasterCard may or may not cover CDW depending on the bank issuer. However, a MasterCard that covers CDW will also cover loss of use.

If you rent a car in your home country, most credit card CDW is secondary, paying only what your regular auto insurance won't cover after you file a claim. When you rent abroad, the credit card CDW is primary (the credit card pays your entire claim), so there is no need to ever involve your other insurance. However, be aware that some countries you drive in may require you to purchase CDW from the rental agency, even if your credit card offers coverage, and that not all rental companies accept credit card CDW.

For cardholders that carry one of a few specially negotiated credit cards from American Express, Visa, and MasterCard, primary CDW is provided on all rentals, including those in the U.S.

Consumers who use a personal AMEX credit card but want primary coverage when renting with their plastic can opt for "Premium Car Rental Protection," which provides primary CDW, as well as accidental death and dismemberment insurance and secondary medical and personal property insurance.

Premiums begin at $19.95 per rental, regardless of length, with higher-coverage options available at a higher cost. Enrollment is free and coverage will apply automatically every time you rent. This offering from AmEx can be a good choice is you usually rent cars for two days or more.

If you plan to rent a car, find out if your credit card issuer provides CDW, if it applies in the countries you will be driving your rental car, exactly what is covered (personal injury or personal property may not be included), if there are any restrictions and limitations that apply, the maximum number of rental days CDW will cover, the types of vehicles covered, and how the claim procedure works.

You may want to discuss the worst-case scenario with your credit card issuer. Additionally, you may want to request a copy of the credit card issuer's insurance policy. That way, you have in writing exactly what is and is not covered before you decline CDW from the car rental agency.

By accepting coverage from the car rental agency, you automatically forgo any coverage supplied by your credit card. Conversely, when you decide to use the CDW offered by your credit card, you will need to decline the rental agency's protection. As a result, some rental companies may view you as technically liable for the entire deductible, which may equal the cost of the rental car.

Therefore, these agencies could put a hold on your credit for the value of the car, essentially freezing part of your line of credit. Find out how much any hold will total and when it will be removed. To keep from tying up your credit, you can use one credit card for car rentals and hotels, and another credit card for making daily purchases. If you don't have enough credit left on your card to cover the value of the car, you may have to buy CDW insurance.