Use Virtual Account Numbers to Fight Fraud

Not many people realize that their credit card may offer a good type of fraud protection called Virtual Account Numbers. Virtual Account numbers are a one time use number that points back to your main credit card number. The main use of this is when buying things over the Internet. When you check out, you use a virtual card number which can only be used once. So not only are you not giving out your real credit card number, you are also giving out a number that can be used once for charges. Once the charge hits your credit card company, that same number can never be used again, except to issue a credit if you needed to return the item.

Many credit companies claim that you are not held liable for unauthorized charges to your account so many people don’t bother using Virtual Account Numbers. But if your card number was lost or stolen and you are issued a new number then you have to update that new number with every merchant that may have it stored. Using Virtual Account Numbers you can only give out your real credit card number to trusted merchants and give other not so trusted merchants a virtual account number. This way you have the security of knowing that even if someone did get that virtual account number they couldn’t do anything with it.

Some banks like Bank Of America have sophisticated virtual account number programs where you can get numbers that can be used multiple times for recurring purchases. Other banks like Citibank have a more basic program where you can get a number for a one time use.

I use a virtual account number for all my online purchases. With the way credit departments are getting hacked into, I think this provides me a little more security to not having my main credit card number exposed to possible fraud.

Here are the banks that I know of that have some type of Virtual Account Number feature:
Bank of America / FIA Card Services – ShopSafe Numbers
Citibank – Virtual Account Numbers
Discover – Secure Online Account Numbers

Banks I know that do not have some type of Virtual Account Number feature:
America Express (They used to have one but stopped it 2 years ago)
Chase
HSBC

Please leave a comment if you know of other banks that provide this valuable service.

High Yield Checking Accounts

In hopes of getting people to add more money in their accounts, you are seeing an increasing trend of local banks creating High Yield Checking Accounts, also referred to as Reward Checking Accounts.

A High Yield Checking Account is pretty much the same as a regular checking account, but it tends to offer a very high interest rate if you meet certain criteria each month.

For example, I currently have a High Yield Checking Account with my local bank. I am earning 5% interest on my balance (up to $100,000) if I do the following every month:

• Use my debit card for 10 purchases (not ATM withdrawals)
• Have at least 1 direct deposit
• Receive my statement electronically

If I don’t meet those requirements the APY becomes .05%. So you can see that it is important that each month I don’t miss out on the 5%.

Since I have direct deposit of my paycheck and get my statement via their online banking interface. The only real challenge for me to meet the requirements is the 10 debit card purchases a month. There are many ways to do this easily, such as pay your cell phone bill online 10 times for small amounts. By 10 $.99 MP3’s from Itunes or Amazon.com

The thought behind all of this is that it is cheaper for the banks if you use your debit card rather then checks. You can still use checks but I think they think they you will tend to use the debit card more once you get used to it. It also saves the banks quite a bit by not having to mail out statements to everyone as well.

Since I opened this account, I don’t even use my savings account anymore since 5% APY is higher than any savings account that I can find. Most large banks like Chase, Bank of America, etc do not offer these. They still trap you in with the $50 bonuses then just give you < 1% on your money. If you are interested, check with the small local banks in your area, these accounts are popping up all over and you are bound to find one.

Make Money With the US Mint

The US Mint has begun circulating the new John Quincy Adams dollar coins. The coins are being sold at face value and are shipped for free.

There are a few ways to make a few bucks here. One way is that you can use a credit card with a zero percent APR for purchases to buy the coins. Then payoff the balance when the balance transfer is due. So you would have the coins in your possesion and have not had to pay for them yet and any interest you have earned is a bonus. Or you could use a rewards credit card to purchase the coins to get the reward specific to your card.

The $1 coins, wrapped in rolls of 25, are available in quantities of $250 (1 box) or $500 (2 boxes). Each order is limited to $500, but there is no where that says you can’t place multiple orders. Your credit card rewards or interest deferral can add up if you were to place many orders. Just remember you are gonna have tons of $1 coins. But hey, it is still real money.

Link To US Mint Ordering Page

Free $25 From ETRADE’s Complete Savings Account

ETrade has brought back its $25 bonus for it’s Complete Savings Account. All you need to do is open a
ETrade Complete Savings Account and fund it with at least $1.

Within 30 days of funding the account $25 will be credited to your Complete Savings Account. This deal is good through August 31st.

Bouns Details and Account Sign up Page

Currnetly the APY for ETRADE’s Complete Savings Account is 3.15%. This is a respectable interest rate for your savings if you need a place to park your money.

HSBC Savings at 3.5% APY

HSBC has raised the interest rate on it’s Online Savings Account to 3.5%. This rate is good through August 15th 2008.

There is no minimum balance requirement and you need to open the account with at least $1. You also get a free ATM card and free ATM withdrawls at and HSBC ATM. Just make sure to look at ATM fees on the machine you are using if you are using a non HSBC ATM. HSBC also has an ACH feature where you can push and pull money from your Online Savings account to other bank accounts that you may have. You can also set up scheduled transfers if you want to save money over time without having to log in and make the transfer each time.

I currently have most of my cash in this account and am very happy with it. If you have some cash sitting at low interst rates, this is great rate compared to everyone else.

Mortgage Paydown Programs

I had a reader write in asking about a Mortgage Paydown Program that would help her pay off her mortgage of $275,000 in 10 years. The program also told her that her payment of $1423 / month wouldn’t change.

I just wanted to write a little about this since I keep hearing of people wondering if these are actually legit. Well before you go any further, do the math. Say for example her lender was really nice and stopped charging her interest. If she wanted to pay down the loan in 10 years, her monthly payment would be $2291.67. So how exactly is this Mortgage Paydown Program going to allow you to pay a $275,0000 loan that is accruing interest and keep the payment at $1423? Smells like a scam to me.

If you are really serious about paying your mortgage down earlier, just make a few extra payments a month up to what you can afford. I make 2 extra payments a year. What I do is take my mortgage payment of $1334 and multiply it by 2 to see the total amount of the extra payments. I then divide that ($2668) by 12 so that I can distribute it evenly over 12 months. So I just add an additional $222 to my mortgage payment each month. At the end of the year I would have made 2 extra payments which in turn lowers my interest and lessens the amount of time that I will need to pay my mortgage.

I would also reccomend doing something like this rather than refinancing to a 15 year. Sure the interest rate would be a little lower, but you are then on the hook for a larger payment every month. With what I am doing, I can make the extra payments if I have the money, but if I don’t I can still just pay the minimum payment. So it is more of a security blanket than anything. With the way the economy and gas prices are who knows what my financial situation will look like in a few months.

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