While this year’s holiday season will need to be a bit different than in years past, it is still a great time to count our blessings, to give thanks, to share memories with loved ones over the phone, and to express gratitude and joy. Many will be spending time donating to others, checking on neighbors, and staying home with close family members. Many of us will be searching online for the perfect gifts to have delivered.
All of us need to take certain precautions – not just for our own health and safety – but also for the safety and protection of our financial information and credit accounts. To prevent damage to one’s credit score and prevent identity theft, there are things to keep in mind during the holiday shopping season.
Resist opening several new lines of credit right now. While those one-time offers with discounted introductory interest rates can be tempting, if you have established decent credit already, it might not be in your best interest to open new retail credit accounts. Only apply for a new credit card when you really need it. While some store-sponsored credit cards can help a budding consumer begin to establish their credit, the special offer lines of credit over the holidays can sometimes do more harm than good – resulting in a negative impact to your credit score that could last a long time.
Avoid accumulating debt by aiming to pay your credit card bills on time and in full each month, whenever possible. If you find yourself having to take extra months to pay off holiday spending, that percentage of debt is factored directly into your credit score and can negatively impact it for months or years to come. Carefully budget how much you can spend on holiday purchases. Keep in mind that making something unique to give, or even cooking a special meal for someone, can be a low cost way to give a very special gift.
Sadly, the holiday season is also the time that credit and identity theft often increases. While it is difficult sometimes to prevent identity theft from occurring, you can take steps to make it much harder for your credit information to be stolen or abused for fraudulent use. Choose to take just one debit or credit card with you on any shopping trip, and present it only when payment is being made. Conceal your card carefully on your person to protect against any possible pickpockets, and using a RFID blocking purse or wallet can also be an added benefit just in case. Remain alert to your surroundings to be aware of anyone with a camera near where you are making a purchase, or while using an ATM to withdraw cash. It is also wise to only use secure ATMs that are part of your banking network. Save all of your receipts and compare them with your credit card bills and bank statements.
When shopping on the internet, always verify that websites that you are purchasing from have “https://” in the website URL address, or a padlock symbol at the top that denotes that the page is secure online. It is best to only do your online shopping at home on a secure Wi-Fi network. Ensure that you use a complex and strong password for each website that requires one, and choose a unique password for each online account. Make sure that websites you purchase from are businesses you can trust and have client reviews that back them up.
Cybercrime has been getting more sophisticated, and malware or malicious software can be difficult to detect as hackers learn newer methods. Some e-commerce websites can be some of the most vulnerable targets for such security threats. Cybersecurity software providers have reported that cyberattacks increase around Black Friday and Cyber Monday and stay active into January – including during post-holiday sales.
It is best to use your credit card versus a debit card for online shopping as many major credit cards offer stronger protection from fraudulent charges. Many card companies provide consumer liability protection, so that you’re not held responsible for fraudulent charges. Federal law limits your liability for covering unauthorized charges to $50, even if your card doesn’t include this feature. Be sure to sign up to get text or email alerts if your credit card is used to make a purchase over a certain amount, or if your issuer notices any activity that is unusual from your typical purchasing history.
During the holidays, scammers will try to take advantage of your desire to get good bargains. Prepare yourself to avoid online scams. If you receive text messages or emails that offer you branded merchandise at a big discount, it could be a scam. Scammers work hard to make these messages look official – designed to get your financial information. Always avoid clicking on such links if you do not fully recognize the sender.
Remember to monitor your credit report monthly to check for any fraudulent activity and take immediate action to report errors to your credit card company or bank. If you suspect you have been the victim of identity theft, contact the authorities. If the dispute becomes a legal issue, you may contact an attorney at The Floyd Law Firm for advice towards further action.