Over Half Of Americans Have Been Rejected For Credit—Here’s How To Get Approved

January 22, 2020

Demetrius Harrison, a 21-year-old college student and promotions specialist in Louisville, Kentucky, submitted his application for the new Apple Card around its debut in September. As a frequent Apple Pay user, with only one other credit card (a student card) to his name, Harrison thought it would be a great opportunity to build his credit.

The only problem: his application for the Apple card was denied.

And understandably so. With a TransUnion score of 562 (out of 850), Harrison’s credit score was too low to qualify for the Apple Card. His application also cited too many credit inquiries in the last 12 months, which he found to be frustrating—after logging into his CreditWise account, the only other recent inquiry on his report was for his apartment lease. Because of his $11,000 balance in student loans, the rejection letter also stated that his debt-to-income ratio was too high.

He’s not the only American who has faced the same disappointing reality; a new survey finds that over half of Americans have at some time been surprised to be rejected for credit.

Why People Are Get A Rejection Surprise

The survey, conducted in September by ScoreSense, a digital resource where consumers can access their credit scores from all three major bureaus, finds that consumers are getting denied credit for three reasons: Credit ignorance, having too many lines of credit or, conversely, not having any at all.

The youngest consumers were by far the most likely to suffer from credit ignorance, with 54% of Generation Z respondents reporting that they did not know their credit scores. Just 23% of Millennials, 20% of Baby Boomers and 18% of GenXers were unaware of their scores.

There are now dozens of ways consumers can access their credit scores on a routine basis—and for free. Fintech companies like Credit Karma and Credit Sesame now enable users to view their credit scores for free as soon as they log into the app; they also send notifications via push alert or email to inform users about changes to their score. For those who don’t want to give a third-party their personal information to access their credit score, pulling it for free once a year at MyFreeCreditReport.com is also an option. Certain credit card companies also offer their cardholders free access to their credit scores.

That’s not to say checking your credit score obsessively will be of service. Since credit reports from the three major credit bureaus—TransUnion, Equifax and Experian—are not updated daily, credit scores are not updated on a daily basis, either. TransUnion, for example, says credit reports are updated at least once a month or every 45 days.

Harrison, a member of Generation Z, monitors his credit score with CreditWise, a free credit report tool. He says he knew a rough estimate of his score when he applied, and though he knew his chances of getting approved weren’t high, he still went for it.

“I thought this was a great card (reasonable interest and above-average cash back) for less-than-casual use, and had some great perks,” Harrison says. “Besides, there was a lot of hype revolving the card when it launched.”

Having at least a general idea of your score can help guide you when determining which credit cards are worth applying for. Some credit issuers will include a “range for approval” on their webpage or in their terms and conditions. Since applying for the card will put a hard inquiry on your report—and could lower your score by a few points—checking first if you fall into the approval range will help prevent any surprise application denials.

Having the wrong mix of credit cards is also hurting consumers when it comes to accessing new credit. The survey finds 38% of Americans have three or more credit cards; Boomers have six or more. There’s no magic number for how many credit cards a consumer should have; much of it depends on personal preference and building a suite of cards that suit an individual’s needs. What’s important is to keep your overall credit utilization below 30% to avoid negative marks to your overall score.

On the other hand, more than one-fifth of Americans between the ages of 18 and 54 don’t have any credit cards at all.

“From a credit perspective, maintaining more than three credit cards can potentially lower your standing,” ScoreSense writes in a press release for the survey. “But holding no credit cards whatsoever can also reflect poorly.”

How to Improve Your Credit

Harrison says he wasn’t surprised when he was denied for the Apple Card, noting that it seems to be suited for the “upper-middle/high class.” But he does have qualms about credit in general and how difficult it is to build a score.

“It’s just frustrating how credit works—your number seems to reflect how you qualify as a person,” Harrison says. “My credit isn’t terrible, it’s just nearly nonexistent. I’m 21 and a college student.”

For individuals who are just starting out and have little to no credit, there are options for building a credit score from scratch. Secured credit cards, for example, are lines of credit that are backed by a deposit put down by a cardholder so they’re of little risk to a lender. These specific credit products help a consumer build credit by making all of their payments on time. Some of these cards also allow holders to upgrade to an unsecured card after showing some period of responsible usage.

Those who have established credit but have seen it take a dip because of missed payments or amounts being sent to collections also have ways to build their scores back up. Secured lines of credit are a great option, but some individuals might be wary of opening up a new credit line. Instead, paying bills on time and hacking away at debt to lower your debt to income ratio can be a good start.

Harrison doesn’t expect to apply for another credit card anytime soon, mainly because he pays for most of his purchases in cash. Once he graduates from college next year, he hopes to remain mostly debt-free while he pays off his student loans. But he still finds credit scoring confusing—and somewhat unfair.

“I am, however, moving out of my apartment in February, and renting a house with two friends,” Harrison says. “I guess Apple can expect another hard inquiry on my report then.”

Source: Kelly Anne Smith of Forbes.com

 

6 steps to take now so your financial life will be off to a good start in 2020

December 23, 2019

The end of the year is almost upon us. Before you know it, you’ll be ringing in 2020 and making a list of New Year’s resolutions.

Yet you may want to get some things in order now so that you can head into next year on a strong financial footing.

“It’s smart to have a game plan going into the following year, especially around what you are trying to accomplish savings-wise,” said certified financial planner Tyler Huck, a financial advisor for Atlanta-based Oxygen Financial.

Zaneilia Harris, a CFP and president of Harris and Harris Wealth Management in the Washington metro area, likes to think of December as a launching pad that will allow you to get focused in 2020.

Just remember to make the time this month to accomplish your goals, she said.

“With the holidays, you can get caught up being busy if you don’t take the time to be quiet,” said Harris, a member of the CNBC Digital Financial Advisors Council.

Here are some things you can do before the year comes to a close.

1.) Recommit to yourself

Make yourself a priority, said Harris. Women, especially, tend to put their family first, but it’s important to make sure you are setting financial goals for yourself, she said.

That can be investing in your future by taking a class, putting more money aside in your 401(k) or investment account or just shoring up your emergency savings.

2.) Review your financial goals

Take a look at your financial and personal goals and make sure they align.

“Sometimes you can get completely off track because you get caught up in other things,” Harris said.

Assess your portfolio and tweak it if necessary.

If you have a financial planner, make an appointment to meet or talk by telephone before the end of the year to make sure you are heading in the right direction, Harris said. If your investments are automated, she said, it’s a good idea to speak with someone just to get another perspective.

It also may be time to put yourself out there for a job promotion or salary increase. Harris suggests listing all the things that support why you deserve it, and then getting feedback from someone in your organization that you trust. Then, practice asking for what it is you feel you deserve. This way, by the time it comes for your annual review, you are prepared.

3.) Make a savings plan now for next year

If there is something you want to spend money on next year, like a vacation, you need to plan for it now.

“It’s smart to sit down in December and do the research and figure out what amount you need,” said Huck, who also hosts a finance and careers podcast for millennials called “They Don’t Teach You This.”

“Have a clear plan going into January.”

Determine how much money you need to set aside per pay period to reach your goal. Then, ask your human resources department to direct deposit it into a savings account, Huck said.

4.) Mind your taxes

As the year comes to a close, make sure you are doing everything you can to save on taxes.

Take a look at your investments. If you have sold or want to sell some stock that has done really well this year, think about other equities you may want to shed that aren’t doing well, Huck said.

It’s called tax-loss harvesting. By selling assets at a loss, it will make up for some of the gains you made and should reduce the amount of taxes you will have to pay.

Also, make sure to use up the money stashed in your flexible spending accounts that allow employees to put aside cash on a pretax basis for medical costs. The distributions are tax-free as long as they’re used toward a qualified medical expense. You generally have until the end of a calendar year to spend the money you saved.

5.) Max out your 401(k)

If you didn’t put the maximum amount allowed by federal law into your 401(k), 403(b) or thrift savings plan, now is the time to add more, if you can.

The contribution limit for 2019 is $19,000. Those ages 50 and older can put as much as $25,000 into their 401(k) accounts thanks to the $6,000 catch-up contribution the IRS allows.

Or, look ahead to next year and see if you can increase the contributions from your paycheck in order to put more aside. The 2020 contribution limit is $19,500, while the catch-up contributions for those 50 and older is $6,500.

6.) Reflect

It’s also a good idea to reflect on what went right this past year, Harris said.

Taking a step back and focusing on the positive can help you see what worked for you and put you on a path toward a secure future.

“Our brains tend to go to the negative,” she said.

“Look at all the things that happened that were great and think about how you can duplicate that going forward.”

Source: Michelle Fox of CNBC

10 Money Moves To Make Before The End Of The Year

December 12, 2019

With only a few weeks left of 2019, it’s time to get your finances in order. Throughout the year, there are ways to maximize your financial health. But as the year draws to a close, some might be left trying to catch up.

Here are ten money moves to make before the end of the year.

1. Maximize Your Retirement Contributions

If you ask any financial professional, nearly all of them will agree: Maxing out your retirement contributions is a smart money move that will set you up for success down the road.

Why is maxing out your retirement contributions important? Since contributions to a 401(k) are made with before-tax income, your monthly salary actually decreases each pay period—which means you’ll end up paying less in federal and state taxes. You’re paying less to the government each month and more to yourself (even though you can’t touch those funds until you’re 59 ½)—and you’re giving those funds time to compound and grow. Roth IRA contributions don’t reduce your taxable income, but regardless, having as much money as possible for life in retirement is one of the most important investments you’ll ever make.

Here’s how much you can contribute each year to the different tax-incentive retirement accounts:

  • 401(k)s: Individuals can contribute up to $19,000 in 2019. This includes 401(k)s, 403(b)s, most 457 plans and the federal government’s Thrift Savings Plan.
  • Individual Retirement Account (IRA): Individuals can contribute up to $6,000 in 2019.

If you’re aged 50 and older, the maximum contributions are bumped up a bit, known as “catch-up contributions.” Individuals who qualify can contribute an additional $6,000 to workplace plans and an additional $1,000 to IRAs.

Maxing out your retirement plans is a smart money move, but other financial goals should be taken into consideration beforehand. Make sure you have a healthy emergency fund and no high interest debt before funneling the maximum amount of money into your retirement accounts.

If you make a moderate to low income and can’t afford going without a few hundred dollars in your paycheck each month, at least make sure you’re contributing enough to take advantage of your company’s employer match, if it’s offered. Try and increase your contributions by one percent each year, if possible, to maximize your savings and overall wealth.

2. Check On Your Retirement Contributions for Next Year

Now that you’re set with your contributions for 2019, it’s time to start thinking about how to maximize them in 2020.

Retirement contributions in 2020 have increased. The maximum individuals can contribute to 401(k)s next year is $19,500. Those who are 50 or older can contribute an additional $6,500, totaling to $26,000. Contribution limits to IRAs will remain the same.

3. Max Out Your HSA

Health savings accounts enable individuals to put money aside for qualifying health expenses, tax free, for individuals who have a high deductible health plan. Using the money is also tax free. The main advantage of these accounts is the tax savings. Contributions are tax-deductible and distributions for qualified health expenses are tax-free.

For 2019, the maximum HSA contributions for individuals is $3,500 and $7,000 for family coverage. Individuals aged 55 and older can contribute an additional $1,000 to their HSAs this year.

Since HSAs roll over from year to year, one smart way to keep your taxable income low while beefing up the account is to take any year-end bonuses and funnel them directly into the HSA. Nora Yousif, CFP, vice president at RBC Wealth Management in Greater Boston, recommends individuals contact their employer to see if bonuses can be deposited directly into the account, rather than added to a paycheck and taxed.

Just like retirement plans, the limits for HSAs will increase in 2020. If you plan on contributing next year, you’ll want to adjust your total contributions to $3,350 for individual coverage or $7,100 for family coverage. Those who are 55 or older will still be able to stash away an additional $1,000.

4. Review Your Tax Allowances

Do you have any idea if your tax allowances are right?

The Tax Cuts and Job Act (TCJA) of 2017 changed the withholding amounts drastically for most consumers. The IRS says the changes affect a wide range of consumers, including parents, those who work two or more jobs, those with high incomes and those who completed itemized deductions on their 2017 tax returns.

In 2018, the Government Accountability Office (GAO) found that more than one-fifth of taxpayers, or about 30 million people, did not withhold enough taxes from their pay. Once tax time rolled around, this led to a flurry of confusion and frustration from consumers who didn’t get their usual cushy tax return. The problem was so stressful for individuals that the IRS waived its penalty for underpaying. To prevent more frustration in the future, take a close look at your tax allowances now—there’s no guarantee the IRS will be as forgiving this year.

In a perfect world, the right withholding would mean individuals would break even come tax time. They would neither owe money to the government or receive a tax refund. Those who value tax refunds should keep in mind that it means they’ve been giving Uncle Sam an interest-free loan throughout the year. Adjusting their withholding will mean more money in their pocket each month.

To check up on your tax withholding, use the IRS tax withholding estimator here.

5. Use Your FSA Funds

Flexible spending accounts are another way to pay for medical expenses with before tax money. Compare to HSAs, however, FSAs are much more restrictive and can only be used by individuals who have employers offering the accounts as a benefit. Money is contributed into these accounts tax-free and can be used tax-free. But they come with a strict “use it or lose it” rule that you’ll want to take seriously.

In 2019, the maximum amount individuals can contribute to an FSA is $2,700. Those funds typically follow a “use it or lose it” rule where only $500 can be rolled over into the next year (depending on if your employer allows rollovers.) This means if you contributed the maximum amount to your FSA, but only spent $1,000, you’ll be forfeiting $1,200.

If you still have money in your FSA to burn, keep in mind that those funds can generally be used for things like copays, deductibles, dental care and medical equipment like bandaids or eyeglasses if you don’t have an HSA.  You can also cover the payment of these items and services for your dependents or spouse with funds from your FSA. If you have an HSA, then your FSA can only be used for vision and dental services.

6. Take Your RMDs

After individuals reach 70 ½, they must take required minimum distributions (RMDs) each year from certain retirement accounts. This is true of traditional IRAs, SIMPLE IRAs, SEP IRAs and retirement plan accounts like 401(k)s and 403(b)s. This is not applicable to ROTH IRAs.

RMDs are treated as taxable income. While that can mean a higher tax bill, not taking RMDs can have even more costly consequences. Those who don’t take their required distributions will be subject to a 50% excise tax on the amount not distributed.

If you’re over the age of 70 ½ and want to benefit from charitable giving, you can double dip. Individuals have the option to donate to charity directly from their IRAs and have it count toward their required minimum distribution. The money must be directly rolled over from the retirement account to the charity in order for it to count toward your RMD and remain tax free. This method is known as a qualified charitable distribution (QCD) and keeps your taxable income lower than if you were to take the RMD yourself. Individuals can donate up to $100,000 of traditional and Roth IRA distributions directly to qualified charities.

7. Bunch Your Charitable Giving

The TCJA nearly doubled the standard deduction amount, which means fewer people now benefit from itemizing tax deductions. In doing so, the tax advantages of charitable giving have lessened for many.

However, there is a strategy to help moderate-income individuals give to charity and still reap the tax benefits: Bunching.

Instead of making moderate annual contributions to charities each year, it can be more effective tax-wise to give them all at once.

For example, instead of making $3,000 in contributions each year, an individual can make one lump-sum payment of $15,000 to tide them over for the next five years. By combining it with other itemized deductions like real estate taxes and medical expenses, individuals will come out well above the standard deduction amount of $12,200, which will help increase their tax savings.

8. Use Your Annual Gift Exclusion

An annual gift exclusion is a great way to transfer wealth without having to pay taxes on the money. The 2019 annual exclusion is $15,000—meaning an individual can give $15,000 per year, to as many people as they want, without impacting their lifetime estate and gift exclusion (currently $11.40 million and rising to $11.58 million in 2020).

Using this annual gift exemption will reduce the value of a taxpayer’s gross estate over time. This will help the individual have a lower amount subject to estate tax—meaning more of their wealth stays with them, rather than being eaten up by taxes.

If you have kids or grandkids, consider contributing to a 529 college saving plan—it will count toward your annual gift exemption. If you and your spouse choose to donate to 529 plans, you can contribute $15,000 each—or $30,000 total, per child. Keep in mind there are maximum aggregate limits for these plans, meaning they cannot exceed the expected cost of the beneficiary’s education expenses.

These accounts can be used to pay for tuition and fees, books and supplies and up to $10,000 per year in tuition for K-12 schools, tax free, which makes them a great asset when it comes to planning for educational expenses. Any non-qualified distributions will be subject to taxes.

9. Maximize Your Savings

If you’re still holding your emergency fund in a traditional savings account, it’s time to switch—you’re missing out on interest earnings.

The current average national rate on savings account is 0.09%. That means for every $1,000 you have deposited, you’ll earn $0.90 in a year (that’s less than a dollar!).

If you want easy access to your money that’s growing with a high yield, consider a cash management account. These accounts have high interest rates (as much as 2% APY or more) and some come with the option to have a debit card tied to the account, giving account holders seamless access to their funds.

10. Prep Now for the Next Economic Downturn

The economy it at its peak. Wages are high, market returns are high and unemployment is low.

Yousif says individuals should start making moves now to better position themselves for a less-ideal economic cycle in the near future—because one is certainly coming.

“Yes, things have been going really well, but everything is a cycle,” Yousif says. “There are signs that a downturn is coming sooner rather than later. Now is a great time to prepare.”

To brace yourself for a recession, Yousif recommends analyzing your risk exposure and time horizon of your investments. The amount of necessary risk usually depends on an individual’s age. Someone nearing retirement in the next five years can’t tolerate the same amount of risk as a 25-year-old who has plenty of time—and more economic cycles—to weather between now and when they’ll need their retirement funds.

“Put more money into safety and get into a protective posture from the market,” Yousif says.

Source: Kelly Anne Smith of Forbes.com

 

10 Tips to Save on Thanksgiving Dinner

November 20, 2019

Thanksgiving is a time to give thanks, overeat, and spend time with family – but it isn’t cheap. In 2017, the cost of a traditional Thanksgiving dinner reached nearly $50 for a feast that feeds 10, according to the American Farm Bureau Federation. A 16-pound turkey can set you back more than $20 on its own – and then you have stuffing, side dishes, desserts, and beverages to add to the mix.

Here are some more money-saving tips for Thanksgiving…

  1. Make a list

It’s easy to overspend when shopping for a much anticipated holiday dinner. Make a list of what you’ll need and exactly how much, and be sure to stick to it when you’re in the store.

  1. Don’t forget store promotions and coupons

Keep an eye out for special coupons and promotions around Thanksgiving. Some stores offer a free turkey if you spend a certain amount of money.

  1. Know price matching policies

Find out if there are any stores nearby that will match advertised prices from competitors. Do the bulk of your shopping there – just don’t forget to bring your coupons.

  1. Choose one meat…

For many, turkey is obligatory on Thanksgiving. What isn’t essential, however, is ham, lamb, and prime rib. Save money by simply choosing turkey or another type of meat for your family’s feast.

  1. …and buy the right amount of it

Buy the right amount of turkey by counting 1 pound per person. If you want some leftovers, calculate more than 1 pound per person. Also remember that if you load up on side dishes, you can probably get away with less turkey.

  1. Consider a frozen turkey

Buy a frozen turkey, and you could save 30 to 40 percent more than you would if you bought a fresh one. Just be sure to follow through with the necessary preparation. You’ll need three to five days to let it thaw.

  1. Balance your side dishes and desserts

Whipping up a bowl of mashed potatoes is cheaper than cooking a seven-layer sweet potato casserole. Serve the essentials (green beans, stuffing, and cranberry sauce), and go light on the more expensive dishes that require several ingredients.

Of course, dessert is just as important as the dinner itself. Luckily, pumpkin pie and cookies are crowd pleasers, and they’re inexpensive to bake.

  1. Be smart about beverages

Visit a wholesale liquor store, and take advantage of sales. Don’t overlook boxed wine either – on average, one box of wine is equivalent to four bottles. Boxed wine often costs $20 or less, which is the equivalent price of $5 per bottle. Serve it in a decanter, and no one will ever know the difference.

For the non-alcoholic drinkers and little ones, serve coffee, tea, or Kool-Aid, which are all cheaper than serving soda.

  1. Have a BYOD (Bring Your Own Dish) party

Asking friends and family to bring a dish is a great way to mix things up. Plus, it relieves some of the meal’s financial burden on the host.

One way to go about this is asking guests to bring a type of dish, rather than a specific one. For example, you can suggest that some guests bring an appetizer, while others contribute a side dish or a dessert. Of course, there’s no shame in asking Aunt Sally to bring her legendary apple strudel either.

  1. Use DIY decorations

If you’re hosting Thanksgiving dinner, you’ll inevitably want to decorate. But this doesn’t necessarily mean you’ll need to splurge on decor. Instead, make use of everyday items in your home or shop at the dollar store.

Consider using drinking glasses as candle holders (turn the glasses upside down), or dress up a pitcher with a simple cloth napkin. Also, go outside. There are plenty of things to do with all the red and orange leaves and acorns in your backyard.

Metallic pumpkins are another inexpensive decoration. Buy a few pumpkins at your local pumpkin patch, and spray them with metallic paint.

Source: americanfinancialsolutions.org

Avoid Becoming a Victim of Holiday Fraud

November 12, 2019

Tis the season for hackers, fraudsters, and identity thieves. Forty percent of each year’s online fraud occurs during the months of October, November, and December. While it is imperative to be cautious of fraud year round, now is the time to be extra vigilant about protecting your personal and financial information. Here are a few reasons why holiday fraud is so prevalent:

  • With more people turning to online shopping for gifts and holiday purchases, there are simply more opportunities for fraudsters to hack personal information.
  • Caught up in the rush of the season, shoppers are more likely to click links that promise great deals. Hackers create apps or set up fake deal websites and attract shoppers by promising a bargain (often through email). When you click the link or download the app, you end up downloading malicious software which compromises your computer or phone.
  • With the introduction of chip technology in 2015, it is more difficult to steal credit card information from in-store computers. This is driving criminals to conduct their fraud online where the chip technology doesn’t affect their ability to grab credit card information.

Risky Behaviors

There are a variety of behaviors that increase your risk of becoming a victim of fraud, particularly holiday fraud.

  • Donating to charities without confirming their credibility. Seventy percent of those donating to charities don’t even ask what percentage of their donation goes to the charity.
  • Reusing the same username and password on multiple sites.
  • Saving your credit card information on retailer sites when making purchases.
  • Purchasing gift cards from potentially risky locations. Gift cards purchased off the rack at the grocery store are more prone to fraud than gift cards purchased from an online retailer.
  • Shipping and receiving packages without requiring signatures.
  • Shopping when you are particularly vulnerable, such as during times of illness, loneliness, or financial difficulty.
  • Using debit cards rather than credit cards, particularly for online purchases.
  • Using unsecured public Wi-Fi when shopping or checking bank accounts.

Avoiding Holiday Fraud

Monitor your bank accounts. Don’t wait for your monthly account statements to arrive to monitor your accounts. Utilize online banking to check your bank accounts and credit cards several times a week for suspicious transactions. If you check your account every few days, you will have fewer transactions to review than if you wait until your monthly statement is available, and you will be able to deal with any fraudulent transactions immediately, rather than weeks after they occur. Take advantage of services available through your bank that alert you of transactions (text messages, emails). These services are often customizable so you can be alerted of transactions over a certain dollar amount.

Use credit rather than debit. If your credit card is compromised, the credit card company carries more of the risk. If your debit card is hacked, your hard-earned money is instantly at risk.

Use one card. Limit your holiday shopping to one credit card. This makes it easier to monitor because you only have one card to keep track of. Use one card for shopping and use another card/account for paying monthly bills (utilities, phone, etc.) This will save you from having to update your payment information on all of your accounts if the card you use for shopping is hacked.

Keep your bank up to date. Make sure your bank and credit card issuer have your most up-to-date contact information in case they need to reach you. If you receive a phone call from someone claiming to be your bank, it is best to call them back using the number on the back of your card or on the bank’s website.

Shop wisely online. Visit websites of established retailers. Type the web address directly into your browser, or use a trusted search engine when searching for the retailer’s website. Don’t click links in your email or social media posts to access retailer websites. Only make purchases from websites that you trust, and do not use debit cards for online purchases.

Avoid gift card stripping. Gift card stripping occurs when a fraudster takes gift cards off the rack at the store and uses a scanning device to capture the identifying information on the cards. The fraudster then puts the cards back for an unsuspecting shopper to purchase later. The fraudster can then monitor the card balances and use the card once money has been added to it. Since gift cards are generally purchased in advance of the holiday and people don’t always use them right away, the fraudster has plenty of time to use the balance. Ask for gift cards that haven’t been on the rack. Also, if the identifying numbers / codes are readily viewable, don’t purchase the card.

Protect your debit card. Debit card skimming can occur when a fraudster uses a special scanner to collect digital information on your debit card to make future purchases. The owner has no idea their card has been skimmed unless suspicious charges show up on their card. Often, these skimmers are installed on ATMs and gas pumps, and they are very difficult to spot. One of our Leavitt Group producers recently shared an experience where he and two fellow co-workers all had their debit cards skimmed. They used an ATM in a hotel, and their cards were all compromised with over $4,600 being taken from their checking accounts. After filing a report and working with their banks, they were able to recover their money, but it took some time to get it all worked out. Protect your debit card by only using ATMs that are owned by your bank or other credible banks. Trust your instincts – if something doesn’t look right on the ATM or card reader you are using, don’t use the machine.

Don’t fall prey to charity scams. There is an increase in charity scams during the holiday season with fraudsters playing on the heartstrings and taking advantage of the giving holiday spirit. Make sure your donations are going to a credible organization. Contact charities of your choice rather than responding to unsolicited requests. Consider volunteering or donating to local organizations to directly help your own community.

By taking a few extra precautions and following the tips in this article, you can protect your personal and financial information and avoid becoming a victim of holiday fraud.

Source: Leavitt Group