UK Leads Europe in Credit Card Fraud — So Stay Safe in London

It’s widely known how oh-so-polite the British are, and that appears to extend into the area of credit card fraud. A study by ACI Worldwide found that 40% of Americans had experienced credit card fraud in the last five years, while only 28% of Brits experienced credit card fraud (10% more than once).

Is it that UK thieves are more polite? Probably not, because the UK still leads Europe in the credit card fraud department. The good news is that this number fell from 34% in 2012, and that likely has to do with the introduction of EMV cards.

EMV is short for “Europay, MasterCard and Visa.” In short, it stores your card data on a microchip rather than a magnetic strip. With skimmers, once the data gets lifted from the magnetic strip, the strip itself can be counterfeited and used to commit credit card fraud. It’s a whole different ballgame with the EMV chip. They are more difficult to copy, and a unique transaction code is generated for each use. EMV has worked extremely well in Europe. According to ATM Marketplace, an online trade publication that covers the space, skimming saw a 45% reduction since 2008 and is likely a reason for decreased UK fraud.

This is good news, but what kind of actionable steps can you take to protect your data if you are headed to the UK?

Don’t make yourself a target for credit card fraud

The first thing to know about the UK is that while it feels a lot like America, there is a European sensibility that permeates British culture, and that includes how criminals operate. They will not be polite. They will be more brazen and steal during the day as much as they will at night. Have you seen those movies, in which some poor tourist has her bag snatched off a café chair by a motorcycle thief? It happens.

Also, thieves are patient. They will hang out in known tourist spots, observe from a safe location, and then leap into action. They may operate in pairs or groups. Someone may bump into you, you turn right, and your pocket gets picked. British law enforcement is likely to assist, but don’t count on the law to recover your goods.

Be especially careful in crowds. With people jostling you back and forth, you won’t notice a quality pickpocket relieve you of your wallet or purse.

Stay alert at ATMs. UK ATMs are designed differently, and you don’t want to look confused while withdrawing money.

Technology isn’t always your friend

As much as we love technology, when traveling abroad, it can become your enemy.

While UK security is generally tight and effective, there are still plenty of ATMs that have been infiltrated with skimming devices. Internet cafes and wi-fi were introduced in the UK well before than in the United States, so thieves are more adept at jumping onto public networks and piggybacking on wireless networks. Be careful about using user names and passwords on financial transaction websites in public places.

Countermeasures to take

You should assume you will have your credit card stolen. So, be certain to have the phone numbers for all your financial institutions written down somewhere safe, and be sure you know how to dial a U.S. number from the UK.

Of course, that also means you should carry multiple cards with you. Keep them in separate locations – one in your suitcase, another in your wallet, another in your shoe – so that you’ll always have one in case something gets stolen.

Have emergency cash or traveler’s checks, and always use the hotel safe.

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Shuttered Rome Finance Gives Up $92 Million Owed by Soldiers

Colfax Capital, dubbed a predatory lender by the U.S. Consumer Financial Protection Bureau, agreed to forfeit $92 million in outstanding debts owed by 17,000 active-duty military personnel and other consumers in a settlement that effectively closed the business, better known as Rome Finance.

The California company and two of its owners are also permanently banned from the consumer lending industry, according to the bureau, which joined 13 state attorneys general in going after the operation.

“Rome Finance lured service members in with the promise of instant financing on expensive electronics, then masked the finance charges with inflated prices in marketing materials and later withheld key information on monthly bills,’’ Richard Cordray, the agency’s director, said in a statement. “Today, their long run of picking the pockets of our military has come to an ignominious end.”

Fleecing soldiers

The operation’s “business model was built on fleecing service members,” Cordray said. In some cases, the company sought to collect on illegal loans, the bureau said. Sometimes its agents complained to the commanding officers of the alleged delinquents about nonpayment of debts that didn’t exist. Often, the company worked with retailers that sold products using financing provided by the company, which hid the true lending costs from consumers, the bureau said.

A Colfax trustee also must also notify credit reporting companies that the service members and other consumers involved have satisfied their debts. Purchases included televisions, video games and computers, according to the agency. The statement doesn’t identify the retailers involved or any actions that may have been taken against them. It says consumers can keep the items they bought and should not make more payments.

Earlier fines

The business originally came to the attention of federal authorities in 2010, when New York State Attorney General Eric Schneiderman went after Rome Finance over lending practices involving retailer SmartBuy and soldiers stationed at Fort Drum, according to Holly Patreaus, the assistant director of the bureau’s office of servicemember affairs. That action led to $13 million in fines and settlements, she said in a blog posted on the agency’s website. Calling it a “chameleon-like” unlicensed lender, she said Rome later became Colfax, which, with its Culver Capital subsidiary, continued to target military personnel.

“Rome Finance’s contracts inflated the disclosed prices of the products to hide the true finance charges that the service members would have to pay, typically by military allotment,’’ Petreaus said. “This trapped service members in contracts that generated millions of dollars for the company and substantial debt for its customers.”

“The sad truth is that Rome Finance was not the first and will not be the last company to financially prey on the military community,” Petreaus said. She urged service members to be on guard against such scams and to use base resources to help them protect themselves.

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Where Are STEM Salaries Highest?

NerdWallet took a look at average STEM salaries across the country. As expected, the San Jose and San Francisco metro areas came in on top. However, a few interesting (and unexpected) places also made the list, like Bridgeport, CT and Bakersfield, CA. For more information, check out NerdWallet’s study that found the best places for STEM grads.

Looking for more interesting data visualizations? Click here.

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Why is My Credit Card Being Rejected Online?

There are few things more vexing than entering all your credit card info to purchase something online, only to have your credit card rejected. You know the card is good. You know you entered the info correctly. So why was your darn credit card rejected online?

The reasons why your credit card gets rejected for online purchases generally are technology-related, somewhere along all the pinging and ponging of signals from one computer to another. We’ll go over those in a moment.

Credit card rejected online due to: Illegal transactions

First, however, be aware that most systems are pretty attuned to online gambling and other illegal transactions at this point. If you are trying to charge a gambling deposit, you may find your credit card rejected. In other cases, you’ll get accepted but immediately get a call from your card’s security department asking if the charge is legitimate.

The reason is that banks that facilitate illegal transactions can themselves be considered as aiding and abetting an illegal activity. They don’t want the hassle.

Due to: Overseas transactions

Your credit card may be rejected if you attempt an international purchase, especially from China. This is a general security feature that almost all U.S. banks have in place. The first reason is that thieves are more likely to charge fraudulent purchases from overseas to make it more difficult for law enforcement to track them.

The second reason is that most illegal credit card transactions occur in foreign jurisdictions.

Due to: Fraud protection

The double-edged sword of credit card companies being held liable for fraudulent charges (instead of the consumer) is that they are hyper-vigilant over anything that looks suspicious. This could be anything. It might be a very large purchase, because you usually only make small purchases.

It could be a purchase at an electronics store when you normally never charge anything from that category. It may be many transactions in a very short period of time. Whatever it is, it’s based mostly on your spending habits and that you stepped outside the box.

Due to: You have a pending hold

This usually occurs with travel. If you’ve rented a car and checked into a hotel in close proximity, both the car rental company and hotel will tack on deposits to your card to make sure you pay what you end up owing.

In these cases, you may send your card over its limit.

Due to: Your card status changed

Are you an authorized user on someone else’s credit card? Your credit card will be rejected if that person has removed you.

Due to: Everyday mistakes

• You entered the information incorrectly.


• You have an old address or phone number still on file.


• You reached your credit limit.


• You aren’t up to date on card payments and the issuer cut you off.


• Your card has expired.

What to do

First, double-check that you’ve entered all your information correctly. If you still are being rejected, then contact the credit card company — if they haven’t contacted you first. For anything illegal or suspicious, they will likely get in touch with you.

Nobody else will tell you this, but we will – if you’ve been dumped as an authorized user, you may have bigger problems. Somebody de-authorized you without telling you. If it’s a spouse, that may be a tip-off that your marriage is in trouble. If it’s a parent, they may have lost trust in you. Get on top of your personal life situation right away.

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How to Make 3 Good Credit Moves Even Better

If you’re trying to improve your credit score, you’ve probably been poking around the Internet for tips and tricks. But let’s face it: Finding reliable information is tough. As a result, stumbling on a good suggestion can feel like striking gold.

But the Nerds don’t think that good credit-enhancement tips are enough. To take your score to the next level, we’ll help you make those moves even better. Let’s dive in!

Good move: Paying you credit card bill on time

Better move: Making a mid-cycle payment to your card, before your information is reported to the credit bureaus

Paying your bills on time is the most important thing you can do to achieve and maintain good credit. In the FICO scoring model, payment history makes up 35% of your credit score, so it’s wise to make timely bill payments a priority.

But you might also want to consider making an additional, mid-cycle payment to your card. Here’s why: Roughly once a month, your card issuer sends notice to the 3 major credit bureaus about your balance and recent payments. If you’re utilizing more than 30% of your available credit at that time, your score could be taking a hit – even if you end up paying off the whole balance when the bill comes due.

To present the best possible picture to the credit bureaus, pay off your balance about a week before your data is reported, then again when the bill for the rest of your monthly charges is issued. This will ensure that both the payment history and credit utilization portions of your score stay in tip-top shape.

Nerd note: To find out what day of the month your issuer pulls your payment and balance information, place a call to its customer service hotline. They should have no trouble filling you in!

Good move: Increasing your available credit by opening new credit cards

Better move: Applying for a credit line increase on your existing cards

Thirty percent of your credit score is heavily influenced by your credit utilization ratio, which is the amount you owe on your credit cards compared with your available credit. Ideally, you shouldn’t use more than 30% of your available credit on any card at any point during the month.

But if you’re in credit card debt and looking for ways to minimize damage to your score, you might consider opening up new cards to increase your available credit. This will improve your credit utilization ratio, but it might take a bite out of a different part of your score, the 15% that’s made up of the length of your credit history.

When determining this portion of your score, one of the factors the FICO model looks at is the average age of all of your credit accounts. When you’ve just opened a new card, that average age goes down – and so might your score.

Plus, opening several new cards at once could cause a loss of points to yet another part of your score, the 10% that comes from new credit inquiries. In general, applying for a bunch of credit cards in a short time reflects negatively on your score.

To avoid both of these pitfalls, call up the issuers of the cards you have and try to get a credit line increase. This could count as a new credit inquiry and ding your score by a few points in the short term, but over the long term the points you’ll gain by decreasing your credit utilization ratio will be worth it. And, of course, work on paying down your credit card debt at the same time.

Good move: Getting a credit card as soon as you graduate from college

Better move: Getting a credit card while you’re still in college

Again, the length of your credit history makes up 15% of your credit score. This means that the sooner you get started with using credit, the better. Since a credit card is the easiest way to do so, consider getting a credit card and using it responsibly while you’re still in college to step out on the right foot after graduation.

Granted, this might be difficult. The CARD Act of 2009 stipulates that issuers must verify that a borrower’s income is sufficient to make payments before approving his or her application – making enough money to qualify is tough if you’re a full-time student.

Still, there are some credit cards for college students that are worth checking out. You can also try to find a co-signer if you’re having trouble getting a card on your own. Just be sure to pay your bills on time and in full, and you’ll be on your way to credit success!

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My Sister Is 27 and Still Doesn’t Have a Credit Card – How Can I Help Her Get Started?

We’re often told that family and finances don’t mix. But if you’re close to a sibling that’s making a major money mistake, you might feel comfortable stepping in to help.

For example, what if your sister is 27 and still doesn’t have a credit card? If you want to help her get started, take a look at the details below – the Nerds have a few ideas to make the conversation more manageable!

Figure out why she’s hesitating to get a credit card

The first way step toward helping your sister understand why getting started with credit is important is to figure out why she’s hesitating. People have complicated feelings about credit cards, so listen carefully to her concerns.

If she’s having a hard time explaining herself, here are a few questions to get the dialogue going:

• Are you worried about getting into credit card debt?


• Do you understand how credit cards work?


• Do you know the difference between credit cards and debit cards?


• Why did you decide not to get a credit card when your friends got theirs?


• Do you know what your credit score is?

Educate her about the finer points of credit card use

The next step in getting your sister started with plastic is explaining the finer points of credit card use; you’ll want to go over the essentials of both how credit cards work and how using them responsibly can benefit her finances overall. Knowledge is power, so giving her the facts will help her feel ready to tackle this new challenge.

Feel free to use your best judgment and her answers to the questions above to decide which of the following points to elaborate on; however, it’s probably a good idea to at least touch on all of them:

Making payments – Explain credit cards are essentially short-term loans. This means that bills come every month, and paying them on time is essential to building and maintaining a good credit score.

Spending – Clarify that there’s nothing wrong with using a credit card for all of her regular purchases, but that spending more than she can afford to pay off in one month could spell trouble. Credit card debt is expensive, but it can also hurt her credit score if she allows her credit utilization ratio to creep above 30%.

Interest – Discuss the fact that interest is only charged when you roll a balance over from month to month; this will help drive home the point about avoiding overspending.

Fees – Go over a few common credit card fees, such as late fees, annual fees, and foreign transaction fees. Emphasize that nearly all fees are avoidable if she’s managing her card usage properly.

Credit – Explain that using a credit card responsibly (paying bills on time and staying out of debt) is a great way to create a good credit profile. This, in turn, will make it much easier to rent an apartment, set up utilities and qualify for other loans.

Rewards – Aside from the convenience and credit-building opportunities that plastic provides, it’s also worth pointing out that she could be earning rewards on all of her regular spending. Briefly discuss that rewards can come in many flavors, so there’s definitely something out there that’s right for her.

A word of caution: Keep boundaries in mind

The Nerds understand why you’re concerned about an adult sibling that’s shunning credit – after all, she’s missing out on so much! But remember that everyone has his or her own way of managing money, so it’s important not to push too hard.

If your sister becomes uncomfortable with the conversation or listens politely but confesses that she’ll probably just keep doing what she’s doing, drop the subject for now. Respect the boundaries she’s setting and resist the urge to keep prodding her about it. At the end of the day, she’s an adult who’s capable of making her own financial choices – but she’s lucky to have a brother or sister who cares so much!

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Will My Credit Score Increase As I Age?

As you get older — and hopefully wiser — you’re supposed to become more responsible. You’ve likely stopped rotating spaghetti and ramen noodles as your only two “home-cooked” meals, probably traded out your clubbing heels for sensible walking flats, and maybe started getting annual checkups instead of ignoring your aches and pains.

The question is: Does the credit industry recognize this maturity and throw you a few extra credit score points as you age? No, but your age may indirectly affect your credit. Here’s what you need to know about the relationship between age and credit scores.

First things first: Is my age a factor in my credit score?

Your credit score is made up of five factors — payment history (35%), credit utilization (30%), length of credit history (15%), types of credit in use (10%) and new credit (10%). So age isn’t a direct factor. However, the third factor — length of credit history — may be heavily influenced by age. Let’s start with what “length of credit history” really means.

The length of credit history takes into account the ages of your newest and oldest accounts, as well as an average length of all of your credit accounts. The longer the average age of your credit accounts, the better. Which means as you get older, your credit score will likely go up, provided you’re practicing good credit habits.

How do I increase the average age of my credit accounts?

Patience is the name of the game when it comes to increasing the average age of your accounts. However, there are a few things you can do.

• 
  

  Don’t cancel credit accounts, especially your oldest accounts. Let’s say you have one credit card that’s seven years old and two that you applied for this year. If you cancel the oldest card, your score will likely drop quite a bit. Keep your oldest credit cards open. If you absolutely want to cancel a card or two, get rid of younger cards you don’t use much.

  
  


• 
  

  Don’t apply for too many new accounts. Each time you get approved for a new account, your length of credit history will go down. Really think about which credit cards you want and try to use your oldest cards occasionally.

  
  


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  Get added as an authorized user on an old card of a friend or relative. If someone wants to help you increase the average age of your accounts, you can ask him to add you as an authorized user on his oldest card. This only makes sense if this person has a pretty old credit account — meaning one or two years old is probably not sufficient. Also, make sure he verifies with his card issuer that authorized users are reported to the credit agencies.

  
  

Length of credit history is only part of the equation …

While it’s great to lengthen the average age of your credit accounts, this factor is only 15% of the credit score equation. In order to build an excellent credit score, you’ll need to practice good credit habits all around. Most importantly, you need to make all of your payments on time and keep your debt balance to credit limit ratio below 30%. Don’t rely on the aging process to fix your credit issues — no number of years passing will get you an excellent score if you’re constantly paying your bills late.

Bottom line: While age isn’t a direct factor in your credit score, length of credit accounts can be heavily influenced as the years go by. To increase the average age of your credit accounts, don’t cancel old cards, don’t apply for too many new cards, and/or ask a loved one to add you as an authorized user on his oldest credit account. Also, don’t ignore the other factors that make up your credit score.

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