Tag Archives: credit cards

Credit Cards Exposed: A Collection of Articles on (Possibly) Our Favourite Piece of Plastic

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Recently I wrote about what happened when our credit card was somehow hacked in “What Happens When Your Credit Card is Used Illegally and Fraudulently?”

Ironically, the card that was used illegally was not the one we use for online shopping. We “Reduce the Risk of Online Shopping with a Low Limit Credit Card” and it seems to be working for us.

I’ve read some other interesting articles about credit cards and the perils thereof. Here are a few you might find worth a skim. (Get it: “skim.” Stealing credit card data? You just can’t buy puns like these even if you subscribe to the Globe and Mail online.)

Big Cajun Man explored the landmines that arrive in the mail in his article Credit Card Cheques, What Gives?

Robb Engen of Boomer and Echo wrote in the Toronto Star about 4 Reasons to Avoid a Rewards Credit Card

The Blunt Bean Counter points out that using one points (see the pun?!) card for your business and personal expenses is “an audit nightmare waiting to happen” in Credit Cards – Tax, Budget and Repayment Issues

Some time ago, Michael James on Money ran the numbers to find out what it costs to pay his credit card bill ahead of time in The Cost of Paying Bills Early. Is it worth paying this “premium” to insure against missing a payment due date?

The comments in Retire Happy’s TFSA or Pay Down Debt? make for interesting reading. Is it better to have an emergency cash supply so you can keep making the minimum payment on your debts, or to pay off the debts and not have an emergency fund? There’s more at work than just the interest $$.

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Have you read a favourite article about credit cards? Please share your opinions with a comment.

Reduce Your Risk Online Shopping with a Low Limit Credit Card

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We rarely pay for expensive items when we are internet shopping. Most of our charges are under $75 for items like books or donations to support various nieces and nephews in fundraising projects. Other charges, like community college continuing education courses and parks and recreation lessons are usually under $250. We decided to reduce the risk of someone stealing our credit card information by getting and using a low limit credit card for our online purchases.

Why Risk Having to Cancel Your Long Held, High Limit Credit Card?

Like many people who’ve been working for years, we have a credit card that dates back over a decade. It has a high limit because it is used to pay for business travel expenses. (We only get reimbursed by our employer after we personally pay our bills.) It’s handy to have a large limit available in case of a sudden emergency as well. Much of our emergency savings are held in ways that would take up to 5 business days to access them. The credit card could help us during that interval.

If we used this credit card for online purchases and its information was stolen, a thief could rack up over ten thousand dollars of charges without having the transaction rejected. That’s too much risk for our taste.

If You Have a High Credit Limit Card It’s Easy to Get a Low Limit Card

The solution was simple. We applied for another credit card from the other major issuer. We asked for a low limit on the card of under $1000. We keep a list of what we’ve spent on the card. If either of us makes a large purchase, we can just pay down the balance immediately without waiting for the bill. That keeps several hundred dollars of credit available at all times.

We did telephone the credit card issuer and gave clear instructions that we do not want the credit limit increased without permission from us in writing in advance.

Cancelling a Low Limit Card Is not a Major Problem

If we did have trouble with this low limit credit card, we wouldn’t have any worries or regrets about having to abruptly cancel it. Our business needs would still be easily met with our other, higher limit card. A delay of a few days waiting for a new card would also be fine.

Conclusion
Having a low limit credit card for online donations and shopping works for us.

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Do you use one credit card for all your shopping online and in person? Have you any backup plan for if the card gets stolen or compromised? Please share your views with a comment.