Money

Phishing
Identity thieves create fake web sites and e-mail designed to mimic legitimate companies in order to trick people into divulging personal and financial information.

Skimming
Identity thieves get credit and debit numbers by using electronic devices to monitor ATMs and credit card processing. They can also monitor the keystrokes on a computer.

Garbage
Identity thieves will often rummage through the garbage of both organizations and individuals in search of credit card receipts, old checks or any other personal or financial information.

Businesses and Other Employers
Identity thieves generally get information from organizations by stealing records. They also get information by bribing employees or illegally accessing an organization’s computers.

Impersonation
Identity thieves often get information, especially credit reports, by posing as a landlord, employer, financial institution or government official.

Theft
Identity thieves steal wallets, credit cards, bankcards and mail such as credit card or bank statements and tax information.

Change of Address Forms
Identity thieves will submit change of address forms to divert mail to another location.

• Always be sure your credit and debit cards have theft protection through the bank that issues them.
• Be careful when giving out your personal information online. Make sure a site is reputable and your computer is secure and free of viruses.
• Do not count your money in front of an ATM. Go to a safe place first.
• Get online banking and always keep a close eye on your account.
• Immediately report lost or stolen checks, credit or debit cards.
• Never give out personal information online, in person or on the phone until you have verified who you are dealing with.
• Never let a stranger stand close to you at an ATM and always stand as close as possible to the ATM when giving your pin or other information. Use drive-up ATMs when possible.
• Never leave receipts in public palaces. Keep them and dispose of them only at home.

A credit card is one of the most common types of loans. A lending firm extends you a line of credit that you can access using a plastic card, usually 3-1/8 inches by 2-1/8 inches in size. That card is your credit card. It comes with a number on the front and a magnetic band on the back. Merchants can charge debts to your account either by passing the numeric strip through a card reader or by manually typing in the number on the front. You can also charge debts over the Internet or by phone by giving the number on the front of the card along with the expiration date.

Credit card companies make money in many ways. First, they charge the merchant that processes your card. That merchant pays for the privilege of being able to access your money through a third party. The credit card company may also charge you in a variety of ways:

• Annual fees
• Interest on your debt
• Late fees
• Cash advance fees

You will generally receive a monthly bill that allows you to pay of the balance or pay them any amount equaling at leas their minimum finance charge. The minimum finance charge generally covers slightly more than whatever the interest on the debt for that month would be. If you pay only the minimum amount, it will take many years to pay off your debt.

There are many definitions of credit. When it comes to managing your money, however, credit is the ability to acquire money, goods or services from others without immediate payment.

If you purchase something with cash, you are making an immediate exchange of payment. If you buy the same item with credit, you are agreeing to repay the purchase price and whatever interest is incurred. You will later have to repay either the business you are purchasing from or an independent lender. Once you have made that agreement to repay, however, they amount you are purchasing the item for is no longer credit. It becomes, instead, a debt.

The amount of credit you have is generally reduced by the amount of debt you have. For example, if you have a five hundred dollar credit limit through a credit card, and you use that card to purchase something for two hundred dollars, you now have three hundred dollars of credit and two hundred dollars of debt. That amount will also be subject to change due to any purchase fees or interest accrued.

Credit is a very powerful tool. it gives you greater flexibility to make future purchases or respond to changing life situations. Acquiring credit is an important money management strategy. Once you use your credit, however, you are limiting your future ability to respond to financial situations. Credit is an important tool to have, but a risky tool to use.

Debt management programs go by many names:

• Debt Consolidation
• Debt Repayment Plans
• Credit Card Counseling
• Credit Counseling
• Consumer Credit Counseling Services (CCCS)

A reputable debt management program will do the following:

1. Cut up every single credit card you have
2. Tell you not to get any more credit cards or acquire any new debt. They may even offer classes to teach you how to manage your money.
3. Negotiate with your creditors to reduce your interest rate or debt into a repayable amount
4. Consolidate your payments so that you are making a single monthly payment that is distributed to your creditors with a specific time line for getting out of debt.

A reputable debt management program will not charge you a fee top use their program. Most present themselves as being non-profit agencies, but that is not entirely true. Most agencies are funded by the credit card companies. The credit card companies do this because they realize that getting some payment is better than getting no payment. The credit card companies do not want you to declare bankruptcy, because that means they will get very little if anything from you. That is why most CCCS sponsored services will never advise you to declare bankruptcy no matter how deep in debt you are.

There are for-profit debt management programs. most of these programs either make money through fees charged to the debtor, or they are thinly veiled loan companies who are looking to offer you home-equity loans to cover your debts.

Debt is the state of owing something. Most debts are in the form of money owed. Money may be loaned in many forms.

You can borrow money from a person, often with a simple verbal contract. for example, you borrow five dollars from a friend to pay for lunch and then you agree to pay them back next week (this is called a term of payment). Chances are they won’t charge you interest. If you borrow a large amount from a person, they may ask for interest, in such a case it is better to get the terms in writing, especially if you are the person loaning the money.

You can borrow money from a bank, credit union or other lending institution. If you have not put up any collateral, (such as a house or a car) than this is an unsecured debt. Credit cards, for example, are generally unsecured debt. If you agree to put up a form of collateral than it is a secured debt. If you do not meet the terms of a secured loan, you may lose whatever collateral you put up. The lender’s right to collect collateral is called a lien.

Another type of debt is contract debt. These are amounts of money you owe an institution because you use their services or property. Utilities such as electricity, gas, cable and phone fall under this category. You use their services, then pay later, generally monthly, for the services you have already used. You owe them a debt, and if you fail to pay they will stop providing services, as well as working to collect what you already owe. Another form of contract debt occurs frequently in business. For example, if you pay an up-front fee to a builder, that builder has incurred a debt to you. The builder is then expected to repay that debt by buying and using necessary materials in the construction process.

A debit card looks much like a credit card. Most are even processed through credit giants such as Mastercard or Visa. Instead of accessing a credit line, however, a debit card accesses a checking or savings account. The result is that, instead of incurring a debt and reducing your amount of available credit, a debit card is used to spend money you already have. As you withdraw cash from ATMs or make purchases the funds are debited (deducted) from your bank account.

When you make purchases from a merchant, you may use the card exactly like you use a credit card (meaning you sign for your purchases) or you may use a Personal Identification Number (PIN) to process your charge. When using a PIN, the funds will be deducted from your account immediately or within the same day. When signing for purchases like a credit card, it may take one to three days for the deduction to be made from your bank account.

Debit cards offer the convenience of using a card instead of cash or check for your purchases. Because you do not incur a debt, however, your debit card purchases prevent you from creating a large debt. Be careful though. Just because a transaction goes through, it doesn’t necessarily mean that there is enough money in your account to cover your charge, especially if you sign for your purchases. Always be aware of your account balance, or you will risk becoming overdrawn and getting charged fees by your bank

Saving money is difficult for most people, but it doesn’t have to be a chore. Below are a few easy ways that you can begin to increase your savings:

Open a Savings Account

Before you consider getting into complicated investments, be sure you have begun this very simple one. open a savings account at the bank and put a set amount into the account every paycheck. Don’t withdraw money from this account for general expenses. It should only be used in a truly dire emergency or for other long-term investment goals.

Shop Wisely

Make a list before going shopping and stick to that list. Avoid impulse purchases. If you spot a item you want that isn’t on your list, put it on a list for your next shopping trip (by the time you go shopping again, you may not even want it.) Buy wholesale or used when possible and buy in bulk, but only if you believe you will use everything you buy.

Save Your Change

When you have spare coins or even small paper currency, put it in a container. Make it a large container. Water jugs are good because they are easy to get money into but not so easy to get it out of. Only take the money out once the container is full. Its good to have a purpose for that money. Use it to save for something fun. It is good to save for fun uses as well as serious uses. Everyone needs fun in their life.

Bring Your Own Food

Make your own breakfast or lunch instead of eating out. Even buying ready-made foods in bulk is better than eating out for these meals. You will be less tempted to spend money. Plan picnics instead of going to restaurants. Order water or at least refillable drinks when you do go out. Instead of going out for dinner, consider going out for dessert. Dessert is often the cheapest item on a restaurant’s menu, and yet it is the biggest treat.

A savings account is meant for saving money. The goal should be to constantly accumulate money in that account. Money should only be withdrawn from these accounts for important purposes such as emergencies, other investments, or for whatever your long-term savings goals are.

Savings accounts are offered by banks, credit unions and other financial institutions. The institution pays you interest in exchange for your keeping your money with them. Savings accounts come with more limitations on withdrawals than checking accounts. You cannot simply write a check to withdraw money from a savings account, although some institutions will let you access your savings from an ATM using a debit card.

Generally, you are also limited in how often you may make withdrawals from your savings account without incurring a fee. Three withdrawals per quarter is a fairly standard limit. Some institutions will also charge a fee if your account balance is below a set amount or they may require that you keep a minimum balance on order to keep the account. These practices are not unfair, but if the amounts or the fees they specify are excessive, look elsewhere.

While banks and credit unions are not the only places in which you can keep a savings account, be sure that wherever you go, your money is insured by the FDIC (A government agency). The FDIC insures your savings account for up to $100,000 so that you don’t have to worry about repayment should your financial institution suffer a failure.

The reason for the restrictions banks put on your savings account is that they will be using your money to make loans to other people. They make money by charging interest on those loans, and they pass some that money back to you through interest payments. Because the bank needs to be sure there will be money to loan, they count on savings accounts to be more steady than checking accounts, which institutions pay much less, if any, interest on and often charge fees for.