Credit Card Debt Management

Virtual credit cards are certainly nothing new in the world of online shopping. After all, they’ve been around almost seven years, but they may not have received due attention in the past. Also known as substitute credit card numbers or controlled payment numbers, this technology offers online shoppers a free and highly effective layer of protection against identity theft.

According to the Sound Money Tips blog, MBNA, Citibank, Discover and Paypal all offer this free service to customers. All you have to do is sign up, download the software, and enter your credit card info (viewable only to the customer and the bank).

Some services limit spending to one merchant or venue only. Other services do not place restrictions on spending, but do generate a different “temporary number” with each online purchase. This temporary number is the only thing hackers can see, whether they eavesdrop at the point of purchase or hack into merchant records after the fact.

Many consumers have snubbed virtual credit cards because they are viewed as unnecessary in light of the fact that credit card companies generally do not hold customers liable for fraudulent purchases. However, the bigger picture is that online credit card fraud can turn into a bigger case of grand-scale identity theft, from which it takes a lot of time and money to recover. And who really wants to deal with that?

Interesting item in southern Mississippi’s Sun Herald yesterday. In light of the recent turbulence in the airline industry, it seems like hard-luck times for countless consumers who booked flights with airlines that are now defunct and considering bankruptcy. Those airlines include ATA, Frontier, Aloha and Skybus.

The funny thing is, the credit card companies these consumers used to book their flights are supposed to provide protection against such matters. It’s one of the selling points in getting a credit card in the first place. Fraudulent charges and misrepresented or undeliverable products or services typically result in customer refunds — except when the number of customers are astronomical and all at once. It’s a tough situation, but it’s also an opportunity for credit cards to show their true colors.

Chase and Discover are among the companies that provide instant refunds. Cards issued through Wachovia could require up to 120 days for refunds to be issued. The article further states that Visa and Mastercard apparently intend to do the same, and honor debit card purchases as well. That, however, may be a bit more complicated because bank cooperation factors in.

These card companies have deep pockets, to say the least. Undoubtedly, the airline ticket issues will be resolved over time, and it provides an illustration of why credit cards are a good bet for major purchases. Just make sure you pay off the balance at month’s end! If you can’t afford it, don’t charge it!

Did you ever wonder what your credit card number means? It’s not random selection, unlike the way your interest rate may often appear to be. The numbers do have meaning, according to Best of Me blog:

The first digit or two will show what network your card belongs to. Three is for travel and entertainment cards. Four is for Visa. Five indicates MasterCard and six indicates Discover. A 37 at the front of your credit card number indicates American Express, while Carte Blanche and Diners Club use 38.

American Express: The rest of the credit card number includes one digit indicating the type of card and one digit indicating the currency, followed by a seven-digit account number and a three-digit number indicating the card number within that account. The 15th and final digit is a “check digit,” which validates the authenticity of the credit card’s number.

Visa: After the number showing what network the card belongs to, there is a five-digit bank number. This is followed by an account number of six digits or, in some cases, nine digits. Of course, the card is completed with a check digit at the end.

MasterCard: After the network number, this card features a bank number of anywhere between two and five digits. The rest of the digits, except the last one, make up the account number. The last digit is the check digit.

And there you have it! Everything you (never) really wanted to know about the convoluted formula that is your credit card number. Consider yourself informed.