Smart shopping for 0% APR credit cards can save consumers hundreds of dollars in interest charges. Many consumers do not think to shop around for credit cards. However, with 60 percent of grocery store purchases being made with credit cards, the decision as to which card the consumer uses can have an impact on how much is paid in interest. One way you can save money in interest charges is to shop around for a 0% APR credit card to transfer existing balances to. The concept of shopping for the best interest rates is not new for purchases such as homes and cars, but so few consumers stop to think about shopping around for the best credit card deal.
0% APR credit cards save consumers money
It is possible for you to save hundreds of dollars a year by transferring balances to a 0% APR credit card. Here is how it works: A consumer applies for a new credit card with a special introductory interest rate of 0% APR for balance transfers. After gaining approval, the consumer transfers the balance of his or her credit cards to the new card. Some companies may waive the balance transfer fee, but a standard fee is usually a small percentage of the transferred balance. Whether the old card has a low 8.9% APR, or whether it has a higher 15.9% APR, the potential savings are well worth the transfer. For the entire introductory period (usually 6 to 12 months) it is possible for consumers to avoid paying interest on their credit card debt.
Sorting through 0% APR credit card deals
Our website provides you with an objective way to look at credit card offers. Check out our 0% Balance Transfer Credit Card page to use a calculator to figure out how much you can save by transferring balances to a 0% APR credit card. You will receive the information you need to help decide on the credit card balance transfer offer that works best for you. Objective side-by-side comparisons allow a more complete picture of available credit cards. When you find a card that you like, it is also possible to apply for that card instantly from our web site. Helpful links to the credit card companies allow you to receive instant approval on their credit cards.
A word of caution
A 0% APR credit card balance transfer is a financial tool that can greatly benefit consumers. However, as with all financial tools, it is important to use it wisely. Consumers should be aware that failure to pay at least the minimum payment on time can result in an immediate end to the introductory period. Many credit cards, however, provide an automatic debit system or an online bill pay option. This can help consumers set up automatic payments that ensure that there are no late payments.
Shopping around for the best bargain is a way of life for many. Applying that rule to credit card applications can mean that you get to keep more of your hard earned cash.
Rabu, 10 September 2008
Online Security: Be Safe With Your Credit Card
“You never can be too sure,” at least that’s what my anti-Internet Shopping friends tell me. Maybe they are right, but the Internet is too convenient and powerful to not take advantage of. So, as long as you are online, you ought to keep a few things in mind – after all they could be correct.
Phishing Scams – What to Watch For
The biggest credit fraud problem on the Internet today doesn’t have to do with consumer purchases, it has to do with a phenomenon known as “phishing.” Phishing is a criminal activity in which scamsters attempt to acquire personal or credit card information. Although phishing originated in the 1990s as a way to gain illegal access to America OnLine, it has progressed into one of the fastest and most adaptive credit card crimes in America.
The latest incarnations have attempted to target online shoppers and bank patrons, as well as social networking sites like MySpace or Facebook. Typically, a user will receive a “spoofed” email, a clever production made to imitate a bank, merchant or credit card company. The email will contain general information, and typically requests some sort of verification of account information, or request for personal data. Phishers have even gone so far as to imitate the IRS and capture sensitive tax data. Instant messenger and the telephone have been used to a lesser extent.
Some common tactics that Phishers use are mimicking URLs to banks or credit providers that you use. For example, a website could be set up that asks you to verify your account number and billing address. It could appear to be related to your bank, and show a web address of something like: www.creditCardCompany.fakePage.com. Unwitting users may end up simply forking over extremely account data that could, and probably will be used for identity theft. So, be weary of online solicitations of account information. Most, if not 100% of banks and credit card providers have a strict policy to never solicit personal account information online.
How to Respond to Phishing
The Federal Trade Commission began prosecuting phishing crimes in 2004, with mixed success. If you become a victim of phishing you should contact them, your local police, or the FBI immediately. Also, it goes without saying that you should close any account that may be tampered with, and contact your credit providers immediately. Finally, make sure to contact the three major credit reporting bureaus to have a fraud alert posted on your credit report.
In 2005 Senator Patrick Leahy introduced the Anti-Phishing Act of 2005. It is a bill that doles out severe criminal penalties to anybody convicted of creating fraudulent emails or websites in order to illegally gain information or financial reward. Phishing is now a federal crime, and the Secret Service and FBI are more aggressively pursuing it.
The basic and obvious steps to prevent yourself from becoming a victim of phishing is to not respond to email or Internet solicitations for your personal account information. In fact, as your browser can be manipulated by Javascript, you ought not even open unsolicited mail or junk mail. The best possible tip you can follow is that if you see a request from a creditor or bank you do business with, you should contact them by phone or in person to discuss the online solicitation. Verify their intentions, but do so using customer service contact information you already have in your account informations – that is to say, don’t use the “contact” phone number from the suspicious email.
For more information on phishing and Internet fraud, visit www.ftc.gov.
Phishing Scams – What to Watch For
The biggest credit fraud problem on the Internet today doesn’t have to do with consumer purchases, it has to do with a phenomenon known as “phishing.” Phishing is a criminal activity in which scamsters attempt to acquire personal or credit card information. Although phishing originated in the 1990s as a way to gain illegal access to America OnLine, it has progressed into one of the fastest and most adaptive credit card crimes in America.
The latest incarnations have attempted to target online shoppers and bank patrons, as well as social networking sites like MySpace or Facebook. Typically, a user will receive a “spoofed” email, a clever production made to imitate a bank, merchant or credit card company. The email will contain general information, and typically requests some sort of verification of account information, or request for personal data. Phishers have even gone so far as to imitate the IRS and capture sensitive tax data. Instant messenger and the telephone have been used to a lesser extent.
Some common tactics that Phishers use are mimicking URLs to banks or credit providers that you use. For example, a website could be set up that asks you to verify your account number and billing address. It could appear to be related to your bank, and show a web address of something like: www.creditCardCompany.fakePage.com. Unwitting users may end up simply forking over extremely account data that could, and probably will be used for identity theft. So, be weary of online solicitations of account information. Most, if not 100% of banks and credit card providers have a strict policy to never solicit personal account information online.
How to Respond to Phishing
The Federal Trade Commission began prosecuting phishing crimes in 2004, with mixed success. If you become a victim of phishing you should contact them, your local police, or the FBI immediately. Also, it goes without saying that you should close any account that may be tampered with, and contact your credit providers immediately. Finally, make sure to contact the three major credit reporting bureaus to have a fraud alert posted on your credit report.
In 2005 Senator Patrick Leahy introduced the Anti-Phishing Act of 2005. It is a bill that doles out severe criminal penalties to anybody convicted of creating fraudulent emails or websites in order to illegally gain information or financial reward. Phishing is now a federal crime, and the Secret Service and FBI are more aggressively pursuing it.
The basic and obvious steps to prevent yourself from becoming a victim of phishing is to not respond to email or Internet solicitations for your personal account information. In fact, as your browser can be manipulated by Javascript, you ought not even open unsolicited mail or junk mail. The best possible tip you can follow is that if you see a request from a creditor or bank you do business with, you should contact them by phone or in person to discuss the online solicitation. Verify their intentions, but do so using customer service contact information you already have in your account informations – that is to say, don’t use the “contact” phone number from the suspicious email.
For more information on phishing and Internet fraud, visit www.ftc.gov.
Instant Approval Credit Cards: No Need to Wait
The Internet has sped up the process of almost everything, including credit cards. Now you can apply online for an instant approval credit card. After filling out an application, you will find out in less than a minute if you have been approved. It’s just that easy and fast! Here’s what you need to know about instant approval credit cards and if they’re right for you.
How Instant Approval Credit Cards Work
If you’re considering applying for an instant approval credit card, the process is simple. The first step is to fill out an online application. After submitting the application, plan to wait a few seconds or minutes while the information is processed. You will then be notified about your approval status. Once you have been approved, the credit card company sends you a card. While the approval time is short, you will not receive the plastic card immediately (they can’t send it through cyberspace yet). You can expect to wait a week or two while the company sends the card in the mail. Once you receive and activate the card, it is yours to use. The entire process for an instant approval credit card is much speedier than applying through the postal mail or over the phone.
One note: instant approval credit card applicants that have good to excellent credit history are the most likely to be approved. If you have filed for bankruptcy or have a history of bad credit, your chances of approval are greatly reduced. Also, if you have recently been denied a credit card through a particular company, you are less likely to be instantly approved by that company. While you still may have other credit card options (such as bad credit credit cards), an instant approval credit card may not be the best choice for your situation.
What Information You’ll Need
Once you’ve decided to apply for an instant approval credit card, you may wonder what information you will be asked for. Applications vary depending on the company; however, most of them require the same basic information from you. Plan to include your personal information, such as name, e-mail address, date of birth, home address and employment information. Some credit card companies will ask about your annual income, income source, and checking and savings accounts. You may also be asked about housing status, monthly housing payments, and the length of time at your current residence.
Check the Benefits
When considering which instant approval credit card to apply for, make sure to look at the various benefits offered. You may be interested in getting cash back, receiving travel miles for dollars spent, or getting gas benefits. Choose benefits that you can use and enjoy. By doing so, you will get the most out of your credit card.
Determine if Instant Approval Credit Cards are Right for You
If you want to save time when applying for a credit card, an instant approval credit card is a great choice. If your credit history is good or better, this card is a safe and speedy option. By choosing a card with benefits that suit you, you will make the most of your credit card use.
Looking for an instant approval credit card today? Gather your information, choose the card with the best benefits for your lifestyle, and then apply online. It’s just that simple.
How Instant Approval Credit Cards Work
If you’re considering applying for an instant approval credit card, the process is simple. The first step is to fill out an online application. After submitting the application, plan to wait a few seconds or minutes while the information is processed. You will then be notified about your approval status. Once you have been approved, the credit card company sends you a card. While the approval time is short, you will not receive the plastic card immediately (they can’t send it through cyberspace yet). You can expect to wait a week or two while the company sends the card in the mail. Once you receive and activate the card, it is yours to use. The entire process for an instant approval credit card is much speedier than applying through the postal mail or over the phone.
One note: instant approval credit card applicants that have good to excellent credit history are the most likely to be approved. If you have filed for bankruptcy or have a history of bad credit, your chances of approval are greatly reduced. Also, if you have recently been denied a credit card through a particular company, you are less likely to be instantly approved by that company. While you still may have other credit card options (such as bad credit credit cards), an instant approval credit card may not be the best choice for your situation.
What Information You’ll Need
Once you’ve decided to apply for an instant approval credit card, you may wonder what information you will be asked for. Applications vary depending on the company; however, most of them require the same basic information from you. Plan to include your personal information, such as name, e-mail address, date of birth, home address and employment information. Some credit card companies will ask about your annual income, income source, and checking and savings accounts. You may also be asked about housing status, monthly housing payments, and the length of time at your current residence.
Check the Benefits
When considering which instant approval credit card to apply for, make sure to look at the various benefits offered. You may be interested in getting cash back, receiving travel miles for dollars spent, or getting gas benefits. Choose benefits that you can use and enjoy. By doing so, you will get the most out of your credit card.
Determine if Instant Approval Credit Cards are Right for You
If you want to save time when applying for a credit card, an instant approval credit card is a great choice. If your credit history is good or better, this card is a safe and speedy option. By choosing a card with benefits that suit you, you will make the most of your credit card use.
Looking for an instant approval credit card today? Gather your information, choose the card with the best benefits for your lifestyle, and then apply online. It’s just that simple.
Crushing Credit Card Debt
How much do YOU owe on your credit cards?
The average American family is now over $7000 in debt just on their credit cards. That debt generates an interest charge of over $105 each month if your card charges the average 18%. If you have missed a payment or made a late payment (even by one day!), you may be paying up to 27% interest or over $157 each month.
Most credit card companies require a modest payment towards the card balance. Modest meaning from $10 to $20 a month. To pay off a $7000 debt at $20 a month you will not pay off this debt for 29 years.
And what about those interest charges? Paying off a $7000 credit card debt charging an interest rate of 18% and paying $20 a month towards the debt, you will pay over $18,400, more than TWICE the original debt, just in interest.
What if you have more than one card? What if your debt is over $7000? What can you do? How can you get out of this hole?
There are some techniques that can help you pay off your debt and do not require expensive loans, invasive credit checks, or expensive financial planners and accountants. You can also save on interest charges by paying off your debts in a certain order.
The most effective technique is sometimes called the "snowball" method. The snowball method suggests that when you pay off one debt you apply that payment amount to the next debt. Thus the amount you pay on a debt grows like a snowball rolling down a hill.
For example, you have three credit cards with debts of $5000, $4000, and $3000 which are charging you 18%, 27%, and 12%, respectively, and you are paying $150, $125 and $100 each month. By paying these required monthly amounts you will pay off your $3000 credit card first.
Now that the $3000 card is paid off you have an extra $100 a month. Put that extra $100 toward paying off your next credit card debt. Now you are paying $225 a month on the $4000 card and the $150 on the $5000 card. With this accelerated payment on the $4000 card you will pay off the card earlier and save some money on interest charges.
Then apply the $225 payment to the $5000 card for a monthly payment total of $375. Soon this card will be paid off and you will have $375 extra each month to pay off other debts or better yet, INVEST!
So, which debts should get paid off first?
Generally, you want to pay off the debts that are charging you the highest interest rates first. In the above example you could have added the $100 payment to the $5000 credit card rather than the $4000 credit card. But the $4000 credit card is charging you 27% where the $5000 credit card is charging 18%. By paying off the card charging the higher interest rate first, you will save some money on interest charges.
If this sounds too confusing, you can enlist your computer. You can search the Internet for the keywords "debt reduction calculator" or you can visit http://www.simplejoe.com/debteraser/index2.htm and review a product named Simple Joe's Debt Eraser.
Simple Joe's Debt Eraser helps you create a Rapid Debt Reduction Plan that is customized to your debts and your situation. Just enter your debts and the amount you can afford to pay each month. The software will create a plan telling you how much to pay towards each debt each month until they are all paid off.
You CAN pay off your debts. The trick is to stop charging purchases to your credit cards and develop a debt reduction plan. Your plan should include "snowballing" your payments and prioritizing the debts by high interest rate.
The average American family is now over $7000 in debt just on their credit cards. That debt generates an interest charge of over $105 each month if your card charges the average 18%. If you have missed a payment or made a late payment (even by one day!), you may be paying up to 27% interest or over $157 each month.
Most credit card companies require a modest payment towards the card balance. Modest meaning from $10 to $20 a month. To pay off a $7000 debt at $20 a month you will not pay off this debt for 29 years.
And what about those interest charges? Paying off a $7000 credit card debt charging an interest rate of 18% and paying $20 a month towards the debt, you will pay over $18,400, more than TWICE the original debt, just in interest.
What if you have more than one card? What if your debt is over $7000? What can you do? How can you get out of this hole?
There are some techniques that can help you pay off your debt and do not require expensive loans, invasive credit checks, or expensive financial planners and accountants. You can also save on interest charges by paying off your debts in a certain order.
The most effective technique is sometimes called the "snowball" method. The snowball method suggests that when you pay off one debt you apply that payment amount to the next debt. Thus the amount you pay on a debt grows like a snowball rolling down a hill.
For example, you have three credit cards with debts of $5000, $4000, and $3000 which are charging you 18%, 27%, and 12%, respectively, and you are paying $150, $125 and $100 each month. By paying these required monthly amounts you will pay off your $3000 credit card first.
Now that the $3000 card is paid off you have an extra $100 a month. Put that extra $100 toward paying off your next credit card debt. Now you are paying $225 a month on the $4000 card and the $150 on the $5000 card. With this accelerated payment on the $4000 card you will pay off the card earlier and save some money on interest charges.
Then apply the $225 payment to the $5000 card for a monthly payment total of $375. Soon this card will be paid off and you will have $375 extra each month to pay off other debts or better yet, INVEST!
So, which debts should get paid off first?
Generally, you want to pay off the debts that are charging you the highest interest rates first. In the above example you could have added the $100 payment to the $5000 credit card rather than the $4000 credit card. But the $4000 credit card is charging you 27% where the $5000 credit card is charging 18%. By paying off the card charging the higher interest rate first, you will save some money on interest charges.
If this sounds too confusing, you can enlist your computer. You can search the Internet for the keywords "debt reduction calculator" or you can visit http://www.simplejoe.com/debteraser/index2.htm and review a product named Simple Joe's Debt Eraser.
Simple Joe's Debt Eraser helps you create a Rapid Debt Reduction Plan that is customized to your debts and your situation. Just enter your debts and the amount you can afford to pay each month. The software will create a plan telling you how much to pay towards each debt each month until they are all paid off.
You CAN pay off your debts. The trick is to stop charging purchases to your credit cards and develop a debt reduction plan. Your plan should include "snowballing" your payments and prioritizing the debts by high interest rate.
Credit card fraud
Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud is also an adjunct to identity theft.
The cost of credit card fraud reaches into billions of dollars annually. In 2006, fraud in the United Kingdom alone was estimated at £428 million,[1] or US$750-830 million at prevailing 2006 exchange rates.[2]
Origins
The fraud begins with either the theft of the physical card or the compromise of data associated with the account, including the card account number or other information that would routinely and necessarily be available to a merchant during a legitimate transaction. The compromise can occur by many common routes and can usually be conducted without tipping off the card holder, the merchant or the bank, at least until the account is ultimately used for fraud. A simple example is that of a store clerk copying sales receipts for later use. The rapid growth of credit card use on the Internet has made database security lapses particularly costly; in some cases, millions[3] of accounts have been compromised.
Stolen cards can be reported quickly by card holders, but a compromised account can be hoarded by a thief for weeks or months before any fraudulent use, making it difficult to identify the source of the compromise. The card holder may not discover fraudulent use until receiving a billing statement, which may be delivered infrequently.
[edit] Stolen cards
When a credit card is lost or stolen, it remains usable until the holder notifies the bank that the card is lost. Most banks have toll-free telephone numbers with 24-hour support to encourage prompt reporting. Still, it is possible for a thief to make unauthorized purchases on that card up until the card is cancelled. In the absence of other security measures, a thief could potentially purchase thousands of dollars in merchandise or services before the card holder or the bank realize that the card is in the wrong hands.
In the United States, federal law limits the liability of card holders to $50 in the event of theft, regardless of the amount charged on the card. In practice, however, many banks will waive even this small payment and simply remove the fraudulent charges from the customer's account if the customer signs an affidavit confirming that the charges are indeed fraudulent. Other countries generally have similar laws aimed at protecting consumers from physical theft of the card.
The only common security measure on all cards is a signature panel, but signatures are relatively easy to forge. Many merchants will demand to see a picture ID, such as a driver's license, to verify the identity of the purchaser, and some credit cards include the holder's picture on the card itself. However, the card holder has a right to refuse to show additional verification, and asking for such verification may be a violation of the merchant's agreement with the credit card companies. Self-serve payment systems (gas stations, kiosks, etc.) are common targets for stolen cards, as there is no way to verify the card holder's identity. A common countermeasure is to require the user to key in some identifying information, such as the user's ZIP or postal code. This method may deter casual theft of a card found alone, but if the card holder's wallet is stolen, it may be trivial for the thief to deduce the information by looking at other items in the wallet. For instance, a U.S. driver license commonly has the holder's home address and ZIP code printed on it.
Banks have a number of countermeasures at the network level, including sophisticated real-time analysis that can estimate the probability of fraud based on a number of factors. For example, a large transaction occurring a great distance from the card holder's home might be flagged as suspicious. The merchant may be instructed to call the bank for verification, to decline the transaction, or even to hold the card and refuse to return it to the customer.
[edit] Compromised accounts
Card account information is stored in a number of formats. Account numbers are often embossed or imprinted on the card, and a magnetic stripe on the back contains the data in machine readable format. Fields can vary, but the most common include:
- Name of card holder
- Account number
- Expiration date
- Verification/CVV code
Many Web sites have been compromised in the past and theft of credit card data is a major concern for banks. Data obtained in a theft, like addresses or phone numbers, can be highly useful to a thief as additional card holder verification.
[edit] Mail/Internet order fraud
The mail and the Internet are major routes for fraud against merchants who sell and ship products, as well Internet merchants who provide online services. The industry term for catalog order and similar transactions is "Card Not Present" (CNP), meaning that the card is not physically available for the merchant to inspect. The merchant must rely on the holder (or someone purporting to be the holder) to present the information on the card by indirect means, whether by mail, telephone or over the Internet when the cardholder is not present at the point of sale.
It is difficult for a merchant to verify that the actual card holder is indeed authorizing the purchase. Shipping companies can guarantee delivery to a location, but they are not required to check identification and they are usually are not involved in processing payments for the merchandise. A common preventive measure for merchants is to allow shipment only to an address approved by the cardholder, and merchant banking systems offer simple methods of verifying this information.
Additionally, smaller transactions generally undergo less scrutiny, and are less likely to be investigated by either the bank or the merchant, since the cost of research and prosecution usually far outweighs the loss due to fraud. CNP merchants must take extra precaution against fraud exposure and associated losses, and they pay higher rates to merchant banks for the privilege of accepting cards. Anonymous scam artists bet on the fact that many fraud prevention features do not apply in this environment.
Merchant associations have developed some prevention measures, such as single use card numbers, but these have not met with much success. Customers expect to be able to use their credit card without any hassles, and have little incentive to pursue additional security due to laws limiting customer liability in the event of fraud. Merchants can implement these prevention measures but risk losing business if the customer chooses not to use the measures.
[edit] Account takeover
There are two types of fraud within the identity theft category, application fraud and account takeover.
Application fraud occurs when criminals use stolen or fake documents to open an account in someone else's name. Criminals may try to steal documents such as utility bills and bank statements to build up useful personal information. Alternatively, they may create counterfeit documents.
Account takeover involves a criminal trying to take over another person's account, first by gathering information about the intended victim, then contacting their bank or credit issuer — masquerading as the genuine cardholder — asking for mail to be redirected to a new address. The criminal then reports the card lost and asks for a replacement to be sent. The replacement card is then used fraudulently.
Some merchants added a new practice to protect consumers and self reputation, where they ask the buyer to send a copy of the physical card and statement to ensure the legitimate usage of a card.
[edit] Skimming
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Skimming is the theft of credit card information used in an otherwise legitimate transaction. It is typically an "inside job" by a dishonest employee of a legitimate merchant. The thief can procure a victim’s credit card number using basic methods such as photocopying receipts or more advanced methods such as using a small electronic device (skimmer) to swipe and store hundreds of victim’s credit card numbers. Common scenarios for skimming are restaurants or bars where the skimmer has possession of the victim's credit card out of their immediate view. The thief may also use a small keypad to unobtrusively transcribe the 3 or 4 digit Card Security Code which is not present on the magnetic strip.
Instances of skimming have been reported where the perpetrator has put a device over the card slot of a ATM (automated teller machine), which reads the magnetic strip as the user unknowingly passes their card through it. These devices are often used in conjunction with a pinhole camera to read the user's PIN at the same time.[5]
Skimming is difficult for the typical card holder to detect, but given a large enough sample, it is fairly easy for the bank to detect. The bank collects a list of all the card holders who have complained about fraudulent transactions, and then uses data mining to discover relationships among the card holders and the merchants they use. For example, if many of the customers used one particular merchant, that merchant's terminals (devices used to authorize transactions) can be directly investigated. Sophisticated algorithms can also search for known patterns of fraud. Merchants must ensure the physical security of their terminals, and penalties for merchants can be severe in cases of compromise, ranging from large fines to complete exclusion from the merchant banking system, which can be a death blow to businesses such as restaurants which rely on credit card processing.
[edit] Carding
Carding is a term used for a process to verify the validity of stolen card data. The thief presents the card information on a website that has real-time transaction processing. If the card is processed successfully, the thief knows that the card is still good. The specific item purchased is immaterial, and the thief does not need to purchase an actual product; a Web site subscription or charitable donation would be sufficient. The purchase is usually for a small monetary amount, both to avoid using the card's credit limit, and also to avoid attracting the bank's attention. A website known to be susceptible to carding is known as a cardable website.
In the past, carders used computer programs called "generators" to produce a sequence of credit card numbers, and then test them to see which were valid accounts. Another variation would be to take false card numbers to a location that does not immediately process card numbers, such as a trade show or special event. However, this process is no longer viable due to widespread requirement by internet credit card processing systems for additional data such as the billing address, the 3 to 4 digit Card Security Code and/or the card's expiry date, as well as the more prevalent use of wireless card scanners that can process transactions right away.[citation needed] Nowadays, carding is more typically used to verify credit card data obtained directly from the victims by skimming or phishing.
A set of credit card details that has been verified in this way is known in fraud circles as a phish. A carder will typically sell data files of phish to other individuals who will carry out the actual fraud. Market price for a phish ranges from US$1.00 to US$50.00 depending on the type of card, freshness of the data and credit status of the victim.
[edit] Profits, losses and punishment
 | The examples and perspective in this article or section may not represent a worldwide view of the subject. Please improve this article or discuss the issue on the talk page. |
[edit] Losses
 | Please help improve this article or section by expanding it. Further information might be found on the talk page or at requests for expansion. (August 2007) |
U.S. federal law can hold the cardholder victim responsible for up to $50. Merchants in high-risk industries, such as unattended automated fuel pumps or Internet sales, anticipate a certain amount of credit card fraud, and set prices accordingly. These higher costs are then passed onto the customer. The FBI's Financial Report to the Public for 2007 report losses of $52.6 billion, affecting 9.91 million Americans.
[edit] Credit card companies
 | This section may require cleanup to meet Wikipedia's quality standards. Please improve this article if you can. (May 2008) |
In the case of fraud, the merchant and not the credit card company pays the full cost of the fraud plus a chargeback fee or the merchant's chargeback insurance covers it. In addition credit card companies have to pay for preventing fraud while maintaining a good customer experience. Online merchants have the ability to sign up for services offered by Visa and Mastercard i.e. "Verified By Visa" or "MasterCard SecureCode" to prevent being "chargedback" for fraud transactions. In addition merchants often do not take adequate measures to protect their websites from fraud attacks.
Credit card merchant associations, like Visa and MasterCard, and their member banks receive profit from transaction fees, with the lowest known in the industry as the discount, mid-qualified, and non-qualified rates. The discount rate is a percentage of the amount of the transaction, with typical merchants receiving discount rates in the range of 2% to 4%.[citation needed] Merchant associations are thus motivated to pursue policies which increase the aggregate amount of money transferred by their systems. Many merchants believe this pursuit of revenue generation reduces the incentive for credit card banks to implement procedures to reduce credit card crime, particularly since the cost of investigating fraud is usually higher than the cost of a write-off.[citation needed] However, merchant associations are not assuming these costs; they are instead passed on to merchants as "chargebacks". This results in substantial additional costs: not only has the merchant been defrauded for the amount of the transaction, but he is also obligated to pay a chargeback fee, and to make matters worse, the merchant is not even reimbursed for his transaction fees.[citation needed]
Merchants have begun to request changes in state and federal laws to protect consumers and merchants from fraud, but the credit card industry has opposed many of the requested laws.[citation needed] In many cases, merchants have little ability to fight fraud, and must simply accept a certain percentage of fraud as a cost of doing business.[citation needed]
Because all card-accepting merchants and card-carrying customers are bound by contract law, according to the agreements they sign with their processing / issuing banks, respectively, State and Federal law has a smaller role in preventing merchants from being tricked.[citation needed] Payment transfer associations enact regulatory changes, and issuing / acquiring banks, merchants, and cardholders are contractually bound to these new regulations.[citation needed]
[edit] Merchants
The merchant loses the goods or services sold, the payment, the fees for processing the payment, any currency conversion commissions, and the chargeback penalty. For obvious reasons, many merchants take steps to avoid chargebacks — such as not accepting suspicious transactions. This may spawn collateral damage, where the merchant additionally loses legitimate sales by incorrectly blocking legitimate transactions.
[edit] Criminals
In the U.S., persons that commit credit card crime largely go unpunished and repeatedly victimize consumers and businesses.[citation needed] The Secret Service handles crimes involving the U.S. money supply; they have a limit of $150,000 before investigating each crime.[citation needed] Most credit card criminals know this and keep purchases from any one business below $150,000. Credit card fraud can be reported to the Federal Trade Commission (FTC) and to local and regional authorities. It is the standing policy of the FTC not to investigate reports where the value of fraud does not exceed $2000. Local law enforcement may or may not further investigate a credit card fraud, depending on the amount, type of fraud, and where the fraud originated from.
Bank card number
The numbers found on credit cards and bank cards have a certain amount of internal structure, and share a common numbering scheme. Credit card numbers are a special case of ISO 7812 bank card numbers.
An ISO 7812 number contains a single-digit Major Industry Identifier (MII), a six-digit Issuer Identification Number (IIN), an account number, and a single digit checksum calculated using the Luhn algorithm. The MII is considered to be part of the IIN.
The term "Issuer Identification Number" (IIN) replaces the previously used "Bank Identification Number" (BIN). See ISO 7812 for more information.
Prefixes
The card number's prefix is the sequence of digits at the beginning of the number that determine the credit card network to which the number belongs. The first 6 digits of the credit card number are known as the Issuer Identification Number (IIN). These identify the institution that issued the card to the card holder. The rest of the number is allocated by the issuer. The card number's length is its number of digits.
Cards participating in the IIN system include:
In the United States, IINs are also used in NCPDP pharmacy claims to identify processors, and are printed on all pharmacy insurance cards. IINs are the primary routing mechanism for realtime claims. Each processor has one or more IINs, which it divides into plans by using Group Number and Processor Control Number fields.
Online merchants may use IIN lookups to help validate transactions. For example, if the credit card's IIN indicates a bank in one country, while the customer's billing address is in another, the transaction may call for extra scrutiny.
The prefixes and lengths for the most common card types are:
| Card Type | Prefix(es) | Active | Length | Validation | Symbol for coverage chart |
|---|---|---|---|---|---|
| American Express | 34, 37[1] | Yes | 15[2] | Luhn algorithm | AmEx |
| Bankcard[3] | 5610, 560221-560225 | No | 16 | Luhn algorithm | BC |
| China UnionPay | 622 (622126-622925) | Yes | 16-19 | unknown | CUP |
| Diners Club Carte Blanche | 300-305 | Yes | 14 | Luhn algorithm | DC-CB |
| Diners Club enRoute | 2014, 2149 | No | 15 | no validation | DC-eR |
| Diners Club International[4] | 36 | Yes | 14 | Luhn algorithm | DC-Int |
| Diners Club US & Canada[5] | 55 | Yes | 16 | Luhn algorithm | DC-UC |
| Discover Card[6] | 601100-601109, 601120-601149, 601174-601174, 601177-601179, 601186-601199, 352800-358999, 622126-622925, 644000-644999, 650000-659999 | Yes | 16 | Luhn algorithm | Disc |
| JCB[6] | 35 (3528-3589) | Yes | 16 | Luhn algorithm | JCB |
| JCB (obsolete)[citation needed] | 1800,2131 | No | 15 | Luhn algorithm | JCB |
| Laser (debit card)[citation needed] | 6304, 6706, 6771, 6709 | Yes | 16-19 | Luhn algorithm / unknown? | Lasr |
| Maestro (debit card) | 5020,5038,6304,6759,6761 | Yes | 16,18 | Luhn algorithm | Maes |
| MasterCard | 51-55 | Yes | 16 | Luhn algorithm | MC |
| Solo (debit card) | 6334, 6767 | Yes | 16,18,19 | Luhn algorithm | Solo |
| Switch (debit card) | 4903,4905,4911,4936,564182,633110,6333,6759 | Yes | 16,18,19 | Luhn algorithm | Swch |
| Visa | 4[1] | Yes | 13,16[7] | Luhn algorithm | Visa |
| Visa Electron | 417500,4917,4913,4508,4844 | Yes | 16 | Luhn algorithm | Visa |
On November 8, 2004, MasterCard and Diner's Club formed an alliance. Cards issued in Canada and the USA start with 54 or 55 and are treated as MasterCards worldwide. International cards use the 36 prefix and are treated as MasterCards in Canada and the US, but are treated as Diner's Club cards elsewhere. Diner's Club International's website makes no reference to old 38 prefix numbers, and they can be presumed reissued under the 55 or 36 IIN prefix.
Effective October 1, 2006, Discover will now be using the entire 65 prefix, not just 650. Also, similar to the MasterCard/Diner's agreement, China Union Pay cards are now treated as Discover cards and accepted on the Discover network.
A search on VISA's website results in many references to card numbers being 16 digits long. However, searching for references to 13-digit cards will turn up no results. It might be presumed that 13-digit cards no longer exist and have been reissued as 16-digit cards. However old accounts may still use these numbers.
Switch was rebranded as Maestro in mid 2007. Maestro is now VISA Electron's main competitor in the European debit card market.
Solo can be used outside of Britain if the card displays Maestro.
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