Debit Card Fraud More Damaging than Credit Card Fraud

August 6, 2008

While I was on vacation this week, some thief was busy emptying out my checking account.

I have always loved the convenience of debit cards, but this recent experience has me re-thinking the cost of that convenience.

First, your liability if you are a victim of debit card fraud is greater than if someone steals your credit card or uses your credit card to make unauthorized purchases.

With credit cards, your liability for unauthorized transactions is limited to $50. However, most major credit card issuers have a zero liability policy, so you typically aren’t liable for anything if you are a victim of credit card fraud.

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How to Get Your Free Credit Report

December 3, 2007

Unfortunately the holiday season usually brings an increase in credit card fraud and identity theft, so right after the holidays is a great time to check your credit report. Following is why, when and how to check your credit report…

Why you should check your credit report

  • to check for errors
  • to check for fraud and identity theft
  • to get the best interest rates
  • more and more people are relying on credit scores – car insurance, employers, etc.

When to check your credit report:

  • Once a year if you have good credit and don’t anticipate any large purchases in the near future
  • Before a major purchase, such as a new home, new car, etc. – should request your credit report 6 months ahead of a big purchase so you have time to correct any errors
  • If you’ve been denied a credit card, loan or other product or service because of your credit (you are entitled to a free credit report if you have been denied credit based on information found in
    your report)
  • If you suspect that your identity has been stolen
  • If you are starting a plan to get out of debt or repair your credit.

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Beware the High Cost of Payday Loans

December 16, 2006

I noticed that a payday loan store moved into my neighborhood recently, then I looked around and realized there are several in my area.

This made me wonder… how profitable are these payday loan places, that they are popping up on every street corner? I’ve heard that payday loans charge high interest rates, but I had never really researched this info before now.

Here’s what I found out…

First, if you’re not familiar with payday loans, basically, they are short-term loans, usually in small amounts. Typically, you write a check for the amount of the loan plus fees, and the lender cashes the check on a specified date, usually one to four weeks later.

Here’s an example: you need $100 to pay your bills so you borrow $100 from a payday loan company. You write a check for $115 and leave it with the lender, to be cashed in two weeks. Your fee for that loan is $15 – that is an annual percentage rate (APR) of 391%.

Although the Truth in Lending Act requires lenders to disclose the finance charge, including the APR, many consumers do not understand the true cost of a payday loan. To continue the example above, let’s assume that you can’t pay the $115 when it comes due. The lender allows you to roll the loan over for another two weeks, but you pay another fee each time you do this. If you rollover the loan in the example above three times, your total finance charges would be $60, for a $100 loan. That equates to an APR of more than 1000%!

As you can see from the example this a very costly way to borrow, even when compared to high interest credit cards. If you find yourself in a cash bind, here are some alternatives to payday loans to consider: a personal loan from a bank or credit union, a personal loan from family or friends, a cash advance against your credit card, a cash advance from your employer, etc.

Buried in Credit Card Offers?

June 11, 2006

Tired of receiving 5 credit card offers for every 1 piece of "real" mail?  Now you can opt of pre-approved credit card offers. 

The Fair Credit Reporting Act requires credit reporting agencies to maintain an opt-out list of consumers who no longer want to receive pre-approved credit card offers.

You can opt out by going to or by calling 1-888-567-8688.

50-Year Mortgage Hits the Market

May 10, 2006

All I can say is "wow".  I never expected to see a 50-year mortgage.  See the full story from CNN Money here.

I imagine this will be a popular mortgage in California and other areas where home prices have sky-rocketed, but can you imagine paying on a house for 50 years?  And what will the interest rate be on a loan this long?  How will you build equity in your home with a 50-year loan? 

The 50-year mortgage will probably help first-time homebuyers afford their first home, especially those that live in markets where real estate has boomed, but will this be a good option?  Only time will tell…

Free Credit Report

May 3, 2006

I’ve had many questions lately about where you can go to get your free annual credit report. There is only one legitimate website to do this and it is Beware of ads or other websites that offer a free annual credit report. Many of these are scams or they are trying to sell you something.

At, you can request a free credit report once every 12 months. This credit report does not include your credit score, but you can purchase your credit score by contacting one of the three credit reporting agencies (Equifax, Experian or TransUnion).

Another great resource for credit reports is, where you can purchase your credit report from all three agencies, including your credit score. myFICO also has an education section where you can learn more about your credit reports and score.

You should check your credit report annually for errors and/or fraud.


Beacon Financial Advisors, LLC, is a fee-only financial planning and Registered Investment Advisory firm headquartered in Lee’s Summit, Missouri and serving the greater Kansas City area.

The firm offers comprehensive financial planning services. Beacon advisors work solely for their clients. Click here to learn more about our services.

About Us

Kristine McKinley, CFP®, CPA, is the founding principal of Beacon Financial Advisors, LLC, an independent, fee-only financial planning firm located in Lee’s Summit, Missouri and serving the greater Kansas City area.

Kristine focuses on providing fee-only financial planning, investment advice, and tax preparation to individuals and families from all income levels.  About Us

In the News

Investment News – Kristine McKinley discusses the 0% Social Security COLA (for 2016) in No Social Security cost-of-living adjustment in 2016.

Kiplinger Magazine/NAPFA – Kristine McKinley answered reader’s tax questions during the 2013 Jump Start Your Retirement Plan Days sponsored by Kiplinger magazine and the NAPFA Consumer Education Foundation.