What’s the New Chip on My Card?

A few weeks ago I was emailed by my banking institution that they were sending me a new card and that my old one would soon be deactivated. What was different about this new card? Nothing, except that the new card now had a small chip on it. Come to think about it, my credit card had a chip on it too. And all of a sudden, when I went to places like target they would ask me to pay with the chip and insert it into a new slot. What was going on? After all these encounters I decided to do a little digging.

What are EMV chips and why is there a major push for these new cards?

EMV chips which stands for Europay, MasterCard and Visa are seen as a solution to recent large scale data breaches, and numerous counterfeit card fraud occurrences. Card companies are using EMV chips to reduce the amount and cost of  fraud. Perhaps you’ve noticed that checkout card readers in your local store have an additional entry point for cards now. This is because retailers are required to add new technology that is compliant with EMV chips and they also must be compliant to new liability rules. As of October 1, 2015, if a retailer hasn’t upgraded to being EMV compliant, and an instance of fraud occurs,  they will be held accountable instead of your card company for the financial damages. Overall EMV chips are an additional measure to combat card fraud.

What makes EMV cards safer than regular cards?

The new golden chip you see on your card may be small, but it makes a big difference in the case of protecting you against fraud. Traditional cards with magnetic strips contain data that doesn’t change. This means that whoever accesses this data will gain sensitive information that they can easily use to make purchases over and over again. However, when EMV cards are used for payment, it creates a unique transaction ID that can’t be used again. This means that if someone stole the chips information from a transaction, the code couldn’t be reused for any other transaction. In addition to this EMV cards use a four digit pin to verify the user’s identity, which is more secure than someone’s signature.

How do I make purchases with an EMV card?

Instead of swiping your card, you’re going to insert your card into the bottom slot of the same machine you would have swiped your card on and wait for the machine to process the purchase, this is called ‘card dipping’. While the machine is processing the purchase, data is being sent to the card’s financial institution to make sure that the card is legitimate. If the institution deems it as legitimate, it will create a unique transaction ID. In comparison to swiping, this process is much slower but may speed up as EMV card dipping becomes the standard across the US.

Can EMV cards still be swiped?

The first iteration of EMV cards will have both EMV chip and magnetic strip purchase capabilities. This means that you will still be able to use your card at any store that you’ve been able to use your old card at before. According to creditcards.com, “EMV-readiness may not reach a 90 percent adoption threshold until 2017”. So it may be awhile until you start worrying about store not having card swiping functionality.

Can I use my EMV card when I travel?

Because the U.S. is the last of the major markets to convert to EMV chips, it is very likely that you will be able to use your card when you travel outside of the country. EMV chips are a norm for many other countries, most notably Europe, so the transition should not be too noticeable.

EMV cards are essentially the next step in evolution when it comes to keeping our financial security. The process isn’t much different from what we’re currently using. However, this new technology will exponentially protect us from card fraud. For more information on protecting your financial information check out What is Identify Theft and how to Protect Yourself From it.

 

Is there another personal financial topic you would like to learn more about? Comment below or send your inquiries to stashadvisor@gmail.com. We are all about bringing you the most value!

This blog post is provided for discussion purposes, and is not intended as professional financial advice. It’s intent is not to be used as the sole basis for your investment or tax planning decisions. To get more information please speak with a financial planner. Under no circumstances does this information represent a recommendation to buy or sell securities.

Financial Mistakes You’ll Make in Your Twenties

Being in your twenties can be tough. One second you are in college, partying, enjoying life, and the next you’re juggling a job, new responsibilities, and figuring out what you want to do for the rest of your life. Because of all this juggling it can be very easy to neglect your finances and make mistakes because your mind is on other things. We have compiled a list of financial mistakes adults in their twenties often make so you can be ahead of the curve.

Not Making a Budget or Sticking to it

A major pitfall that many face in their twenties is not having a budget. A budget is crucial because it helps you check in with yourself everyday to make sure you’re meeting your financial goals. Without a budget you are basically a ship without a steer, going wherever your emotions blow you. On the other hand, even when some make a budget, they find it very hard to stick to that budget. It is understandable that it can be hard to stick to a budget sometimes but it is crucial that you make the effort to do so because it is the difference between wealth and being perpetual broke. To learn some tricks to staying on budget, check out our post on 3 Easy Budgeting Tips.

Failure to Negotiate Their Salary

Another mistake that people in there twenties make is not negotiating their salary with employers. Out of the many ways to make money this is one of the quickest and simplest ways to increase your income. Many often overlook this strategy for various reasons for example they are scared that they may get their offered rescinded, or they just don’t know how to ask. Consider this, if your potential employer valued your talent wouldn’t they want to try and keep you, and second, the worst they could say to you is no. The bottom line is negotiating your salary is the very definition of nothing to lose and everything to gain. Do some quick Google searches or use sites like Glassdoor to learn the average salaries for your field and level of position.

Relying on Credit Cards

Irresponsible use of a credit card can be a fatal move. Using them can be very seductive because it often feels like you’re not spending your own money. On top of that, you don’t have to pay off your credit card immediately. This gets many into the habit of deferring payments. Before you know it, you’ve dug yourself into a deep hole of debt, and you have no idea how to get out. To avoid this, it is always wise to do your research on the credit cards you use, and to pay on time and in full. If you happen to already be in the hole check out our post on 5 Ways to Eliminate Your Debt.

Neglecting Your Credit Score

Your credit score shows you and others how responsible you’ve been with the money you’ve borrowed over time, this includes not only loans but credit card history as well. A credit score ranges between 301 and 850. The higher the score the better your credit is considered. Your credit score is important because this score is taken into account when you want to make big purchases later on in life such as taking out a loan, buying a car, applying for a mortgage etc. It would be a huge mistake in your twenties to not know how credit scores work and not to build yours up, because it could restrict you from financial moves in the future.

Not Having an Emergency Savings Fund

As we all know life is very unpredictable, however it is safe to say that during your life there will be random unfortunate events that you can’t control. An emergency savings fund is protection between you and the random things in life. However, not many people in their twenties have this emergency buffer. Saving as little as $1,000 could save your finances on a rainy day. Check out our earlier blog on The Importance of Savings, and How to Start to learn more about getting started.

Neglecting to Invest Early

The idea of investing can seem complicated, which is why it’s understandable as to why a lot of people in their twenties don’t choose to invest. Not to mention that we have seen and heard about all sorts of things happening to the stock market. However, investing your money is one of the best ways to make your money work for you. Not to mention if you do your research and invest wisely you could find yourself not having to worry too much about your financial future regardless of what happens to you.

Waiting too Long to Save for Retirement

The biggest mistakes that people in their twenties make is not having a retirement strategy. This is an extremely easy thing to do because the idea of retirement seems to be light years away.  Another easy trap to fall into is the notion that you can easily make up for lost time not spent saving for retirement. In reality it is actually the opposite, check out our post on How Much Money Do You Really Need for Retirement? to put things into perspective. The earlier you start saving the sooner you can put compound interest into play making it easier and easier to prepare for retirement as you get older.

In your twenties there are many different things that are calling for your attention. This makes it very easy to neglect things that are not very present in your life. This can result in making a few mistakes that can haunt you for years to come. Hopefully by reading this list you can catch yourself or avoid making the above mistakes all together.

Got a great idea or suggestion of what you would like us to blog about? Please send your inquiries to stashadvisor@gmail.com. We are all about bringing you the most value!

This blog post is provided for discussion purposes, and is not intended as professional financial advice. It’s intent is not to be used as the sole basis for your investment or tax planning decisions. To get more information please speak with a financial planner. Under no circumstances does this information represent a recommendation to buy or sell securities.

3 Secrets Your Credit Card Company Didn’t Tell You

Credit card companies don’t give you a how to guide, or inside tricks when you sign up for them. But we’re going to.

Charges and Fees

I always hate being hit with  late fees, even when I’m on top of my budget and due dates, however it happens to the best of us. Whether it be travel, work, family or just life that throws us off our game we sometimes miss a payment and suddenly see a late fee of at least $25. When this happens give your credit card company a call, explain the situation, and ask if there’s anything that can be done to waive the late fee (sadly, I have never gotten them to waive interest gained).

Make sure to emphasize the following points:

• The excellence of your payment history (always on time, always paid in full, etc.)
• You have already scheduled the payment of your current bill (possibly in full)
• This was a fluke

Most credit card companies will waive the late fee, as long as you have been in good standing with the company. Of course, this is not something you can do every month, most companies have a rule only allowing this to happen once every 12 or 18 months. This waiver can also be applicable to unknown foreign transaction fees. If you come back from travel and noticed these fees, reach out to your credit card company and explain your lack of knowledge and ask for a one time waiver as you now know for next time.

Increase Credit Limit

You may be thinking, I don’t want to increase my credit limit because I will spend more, however having a higher credit limit is good for your credit score. When your credit score is calculated, 30% of your credit score is made up from available credit being used. The golden ratio for having a good credit score is ⅓. For example, if you have one credit card with a limit of $500 you only want to have a balance of $166 on that card. If you request an increase on the same credit card and have a new limit of $750 the desired ⅓ balance would increase to $250.

That being said, when is a good time to ask for a credit limit increase?

• If you have good credit history with the card (paying on time, paying each month, etc.)
• If you recently got a higher paying job or raise
• If you currently have good credit

When should you not ask for a credit limit increase?

• Don’t request a increase on limit on all your cards at once or after opening a new card
• Ask your company if it will trigger a hard pull on your credit, sometimes a smaller increase will not trigger a hard pull. To learn more about credit inquires check out Hard vs. Soft Credit Inquires by Credit Karma.
• If you just received a limit increase most companies will not grant a limit increase for at least another 3 months.

The next step will be learning control, just because you have a higher available credit does not mean you have to reach the limit. It is not good for you, your budget, or your credit score so check out 3 Easy Budgeting Tips.

Upgrading

Whether you are starting out with your first credit card or already established with a credit history consider thinking about upgrading. When you got your first credit card you may not have been offered the best credit card with the most benefits. But, once you do establish a good credit history with your card company check out what other cards they have. Some companies will allow you to upgrade to a card with greater benefits free of charge.

Two companies that come to mind are Capital One and Chase. Both of these companies have what I call “starter cards” that do not offer many benefits to the card holder but also have cards that offer greater benefits without annual fees. For example, if you start out with or are a currently cardholder of one of Capital One’s basic “starter cards” you could negotiate an upgrade to a Capital One Quicksilver, which provides 1.5% cashback on all purchases with no annual fee. For Chase it would be an upgrade from a Chase Slate to a Chase Freedom, which offers different cashback benefits depending on the quarter with no annual fee. However, most of the sign up bonus you will loose as you are not signing up for a new card but rather upgrading your existing account.

So, how do you actually negotiate an upgrade.

• Explain your research, tell them how you have looked into the other cards they offer and are interested in the greater level of benefits and wanted to know more about upgrading

• Emphasize your good credit history and score (paying each month, paying on time, etc.)
• If they do say no, ask them how you can get an upgrade in the future, they most likely will tell you in more detail the qualifications they are looking for

When it comes to credit cards it is best to ask and be told no, rather than not ask at all.

 

If you have learned any tips in your credit card experience please share with us. Or if you’ve got a great idea or suggestion of what you would like us to blog about? Please send your inquiries to stashadvisor@gmail.com. We are all about bringing you the most value!

This blog post is provided for discussion purposes, and is not intended as professional financial advice. It’s intent is not to be used as the sole basis for your investment or tax planning decisions. To get more information please speak with a financial planner. Under no circumstances does this information represent a recommendation to buy or sell securities.