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Twila Van Leer

Chip Cards Off To A Slow Start

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The deadline has passed, but as of a few weeks ago, fewer than half of America’s credit and debit cardholders had received a new card containing the chip that is supposed to help combat card fraud, according to Cardbeat research.

And of those whose card issuer has presented them a card with the new technology, many have never actually use it as intended, the research showed. The survey was conducted by Auriemma Consulting Group, who surveyed some 400 adult cardholders to gather the data.

The chips, which are being pushed by Europapy, MasterCard and Visa (EMV), showed that at the time of the survey (in June) about 47 percent of the respondents had at least one chip credit card and about 25 percent had a debit card containing the chip.

Add to this problem the dearth of merchants who have the new equipment required to read the enhanced cards and you have a very slow start to a process that was ballyhooed as a major step toward thwarting fraud in stores. A USA Today report said that a mere 27 percent of all the merchants who are expected to use the technology had acquired the equipment to put it into practice. Small businessmen, in particular, have complained at the cost of readers, although some models sell for about $100. For large retailers, of course, the cost escalates, but they have the capacity to pay more.

The effort took on more steam during September as an Oct. 1 deadline approached that shifts the liability for fraud to the seller instead of the institution that issued the card.

Those consumers who are using their new chipped cards complain that the technology increases checkout time at the store. Those who issue the cards say that a certain amount of experience is necessary to make the changes in habit that will ensure the program’s success. Until more merchants have the equipment to read the new cards, that experience will be spotty, they say.

In the meanwhile, as the transition moves ahead, merchants say their new readers will continue to process the magnetic strip cards that are in current use.

Most people who get a new card (67 percent in the Auriemma survey) are aware that the blossoming technology will make it harder for unauthorized users to counterfeit a chip card than one with a magnetic strip. Huge breaches of card security in some of the country’s major companies in the past few years provided much of the impetus for new technology.

Internal mistakes will remain a problem, according to an Experian publication. Training for clerks who are in charge of customer transactions is another component in the whole move to chip technology. And the curve for customer education must be speeded up to make it work. Many customers still prefer to swipe their card rather than hand it over to be read by a chip reader, even though the magnetic stripe reading is more vulnerable. The reluctance on the part of customers may be more understandable in view of reports that 35 percent of them using a chipped card have difficultly in making their transaction. The process takes longer, they complain, and many are not aware that the card has to stay in the reader until the transaction is complete. If they remove it prematurely, they have to start the process over again.

The upcoming Christmas shopping season is likely to be the true trial of the chip card technology. Education on all sides of the issue is the answer, but if the ultimate outcome of the switch is a decrease in the multi-billion dollar fraud that occurs at the checkout line, the problems associated with the transition will all be worthwhile.

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    Tips For Holiday Car Deals

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    leasing-new-carMany Americans like to make big-item purchases – cars, for instance – part of the excitement of the holidays. There’s something about a big red bow atop a new vehicle that makes the purchase memorable.

    And the car dealers have learned that piggy-backing on such events as Black Friday, offering good deals and holiday discounts, helps their trade.

    For instance, Lexus, trying to overtake Mercedes and BMW as leaders in the luxury car market, has its “December To Remember” promotion in full swing. Leases on low-mileage cars in the $40,000 range are going for $319 per month with a $3,000 down payment.

    GM’s Chevrolet started heavy-duty advertising on Black Friday weekend, offering zero percent financing for six years or 20 percent off the sticker price on many of its 2015 models. And other manufacturers are making similar offerings to attract holiday sales. If you are in the car-buying mode, here are some things to keep in mind.

    You should be able to wangle at least 10 percent off the sticker price of an unsold 2015 model, possibly more on higher-priced large trucks and SUVs. Some Ford dealers have made a cost reduction of more than $9,600 on some 2015 F-150 trucks. That’s the country’s most popular vehicle. Lease deals are low because interest rates are low and resale values high for vehicles coming off lease. It’s nice to have the 2015 stock off the lot so the 2016 models can show to best advantage. But dealers advise against buying something less than satisfactory just because it appears to be a good year-end deal. If you don’t like something about the vehicle when you take it off the lot, you’ll like it a whole lot less down the road.

    Understandably, dealers make the best deals on the models they have the most of on hand. Slow-selling midsize cars, small vehicles and electric/gas hybrids are in that category. The manufacturers sometimes make incentives available to dealers to help promote sales of the slow-selling models. It pays to shop around rather than make a hasty decision.

    Automakers keep tabs on inventories by dividing sales per day into the number of vehicles on the lots. A 60-day supply is considered adequate.

    The deals are out there, so if your merry Christmas includes a new vehicle, proceed. But proceed with caution and take a clear-eyed look at all the options so you’ll drive into the New Year with the best possible deal.

    Millennials Benefit By Owning A Few Credit Cards

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    millenials-credit-card-usageWho would ever guess that being without credit cards could be a problem? Too many people know the stress of having to make the payments that credit cards require, but not having any cards can create difficulties of another kind. Borrowing in the future may be hampered if you haven’t built a history of bill-paying.

    The millennials who are now in their working years tend to take on fewer credit cards than did their older peers. But when you apply for a loan, for a car or house, say, the potential creditor will be looking for evidence that they can expect you will pay regularly and on time.

    Avoid becoming part of the “credit invisible” group by looking ahead and planning when and how to use a credit card. Before 2009, when Congress passed the Credit Card Act, college students were sent offers from banks and other financial institutions for credit cards, usually with a glut of “goodies” to sweeten the deal. Under the act, persons under 21 must have a co-signer or be able to prove income to obtain a card.

    The provisions had a dampening effect on applications for cards by young people. NerdWallet did a survey that determined 31 percent of those in the 19-34 age bracket had never applied for a card. Millennials, too, have been deluged with horror stories of the results of uncontrolled debt and may be more wary of taking on cards than those who preceded them. Those born at the turn of the century were becoming job-eligible after a serious recession had turned the country’s economy topsy-turvy. The increasing costs of student loans also have had an effect on the overall financial thinking of the millennials.

    But the reality comes home to roost when credit is a sensible part of personal finances. Not being able to get loans – or even to set up a cellphone plan – brings the role of credit into stark reality. Sometimes, even a large down payment on a big-ticket item may not offset the creditor’s inability to verify a customer’s credit standing.

    Delaying too long also may complicate your ability to obtain a card when you want one. A disproportionate number of those in the millennial age group were denied credit cards on their first application, according to Fair Isaac Corp. research. Because they haven’t built a credit record, they end up with low scores, the average being 628 – not enough to impress the card issuers. Banks often require a good to excellent rating to issue a card. Being denied a card multiplies the problems, as the denial becomes part of the credit rating.

    Being persuaded to apply for a card because of the flashy perks such as cash-back rewards, airline miles, etc., may look good at first glance, but the institutions that offer such incentives often charge more interest, or even an annual fee. Don’t jump too fast.

    Piggy-backing, or adding your name to the card owned by a parent or other relative may be an option. But be certain that the individual has a good credit rating, or it may ultimately affect your own rating. Likewise, you are more likely to have your feet held to the fire so that your lapses in payment don’t affect the card owner’s credit.

    A secured card may be the answer for your first-time foray into credit. These cards require money in a security deposit account as collateral. Income and ability to pay also must be proved. This type of card helps to build a credit history that may lead to other cards after time. Prepaid cards do not build a credit record, simply tapping into deposited funds.

    Consider the options and go for the one that fits your needs. But some sort of credit card will ultimately work to your benefit as you get into the serious business of life as an adult.

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    Plan Ahead For Holiday Travel

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    Budget For Enjoyable Vacations
    Budget For Enjoyable Vacations
    If travel is part of your holiday plans, the time to act is now. The cheapest, most convenient travel plans begin early. Prices already are starting to climb and if past experience holds, the demand for airline seats will become pricey as Thanksgiving gets onto the holiday radar.

    If you have expectations to travel between Thanksgiving and New Year, here are things to consider:

    Santa can offer a bit of good news. Airline fares this fall/winter are a little lower than last year. This August, the last month for which data is available, the average domestic fare was down 6.8 percent compared with the year before. Experts predict that the trend will continue.

    Tickets already are going fast for the peak travel days around Christmas and they also are lower – by 3 percent – than last year. You might find even bigger savings on the discount carrier routes, such as Spirit and Frontier airlines. The larger carriers are keeping an eye on the discount fares and the could be good news for travelers across the board.

    Both Christmas and New Years days fall on Friday, so many travelers making the return trip will hope to be aboard flights on either Saturday or Sunday. Fares could be higher for those days, although still a bit lower than last year, according to experts with CheapAir.com.

    Keep an eye on fees that will increase your travel costs, particularly the fees charged for checking luggage and for changing tickets. Southwest still does not charge baggage fees on the first two prices of luggage. If you can, cut down on the amount of luggage you have to pay for by shipping gifts ahead of time. Postage is likely less expensive than baggage fees. Or buy gift cards that provide the recipient with his or her choice of gifts without adding bulk to your packing.

    Try to minimize your baggage by getting what you need into a carry-on that will fit under your seat. If fees are unavoidable, pay them before the fact. They are higher at the airport.

    Expect your flights to be crowded. Home for the holidays is an aspiration of millions of Americans. The most-used airlines are now filling 80 percent of their flights, even the less popular early-morning and late-night options. More people are opting to pay the price for elite travel – larger seats, better leg room – somewhat limiting the availability for families. The larger the group, the sooner you need to get plans gelled.

    Whatever particular needs or desires you want to include in your travel plans, the first advice is still the best. Do it now and travel with less hassle and more comfort. And do your part to minimize stress by planning now to exercise holiday cheer despite lines, glitches and general tension that are part of the seasonal travel.

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      Cost Of Medications A Serious Concern

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      prescription-drug-pricesAs major pharmaceutical producers announce price hikes for the drugs used to treat serious illnesses, consumer concerns also jump. In fact, the cost of medical drugs has become the major distress for the great majority of Americans. Some 70 percent surveyed by Kaiser Family Foundation, a nonpartisan researcher listed drug costs as their top issue.

      Those who are coping with such diseases as cancer, hepatitis, HIV and others are responding very vocally to what some term “pharma greed.” They have caught the attention of the country’s legislators as well. The issue is the top health priority of both major parties as well as Independents.

      The unhappiness among patients, doctors and insurers has been prompted by such announcements as the one made by Turing Pharmaceuticals that it was raising the prices of drugs in use for long periods – some by as much as 5,000 percent. Turing’s CEO reacted to pressure by announcing the company would lower some prices. As of this date, the decrease had not become effective.

      Sixty-three percent of Americans support government action to address the high cost of drugs, and the pressure on Congress is consistently increasing. Several potential candidates for the 2016 presidential election have addressed the issue in campaign forums and even the Republicans seem to be shifting toward government interference to force drug producers to slow the trend to costlier medications.

      The manufacturers cite rising costs for research and development, insufficient competition and drug shortages for their escalating prices. From 2008 to 2014, prices for the most widely prescribed brand-name drugs rose 128 percent and in 2014 alone, total spending on prescriptions went up 13 percent.

      The growing number of placard-carrying protesters, the increasing visibility of the issue in public forums and growing interest in political circles virtually guarantee that the cost of prescriptions will have a prominent spot on country’s political agenda over the next few years.

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