FEATURE ARTICLE: When to use a Credit Freeze or Credit Alert
One of the strongest protection tools available to a credit consumer today is a credit freeze.
Consumers have the ability to “freeze” their credit files which are provided by the 3 main credit bureaus, Equifax, Experian and TransUnion. Putting a freeze on your credit file prevents creditors, lenders and most of all, identity thieves from having access to your credit information. These files will stay frozen or locked until you thaw or unlock them.
You can still use your credit cards but without access to your credit files, thieves cannot establish new credit in your name, even if they have obtained your identity elements such as your Social Security number and date of birth. Consequently, you will not be able to secure new credit unless you remove the freeze from your credit file. You can temporarily “thaw” your credit file any time you want and allow authorized parties to access your credit report when you are applying for new credit. You can reactivate the freeze after receiving your new credit and lock up your credit again.
Freeze vs. Alert
It is important not to confuse a credit freeze with a fraud alert, which tells new creditors that you may have been a victim of fraud in the past and asks them to take additional verification steps before issuing credit. Problem is these additional steps may include asking social security numbers or birthdates which the thief may already have. Fraud alerts will also remove your name form prescreened offers for credit and insurance, while a credit freeze does not. To get the most security for your credit file, a credit freeze is the best alternative.
What does it cost to freeze your account?
All three of the major credit bureaus adopted rules to allow credit freezes naturally for a small fee. Below we are including a table of fees for the State of Florida, but these fees vary from State to State. Important to note that Florida law requires credit bureaus to provide credit freezes at no charge to anyone over 65 and victims of identity theft.
| Freeze | Thaw | Remove | |
| Equifax | $10 | $10 | $10 |
| Experian | $10 | $10 | $10 |
| TransUnion | $10 | $10 | FREE |
Keep these points in mind regarding a credit freeze:
- You must freeze your credit report at each credit bureau
- A freeze must be made via the company website or in writing. If in writing we suggest you use registered mail with a return receipt.
- It usually takes at least three days for you to “thaw” your credit file.
MONEY SAVING TIP: Connect your entertainment center and/or computer setup to a true smart power strip.
A device like the SmartStrip LCG4 basically cuts power to all devices on the strip depending on the status of the first item on the strip. So, if you have your workstation hooked up to this, every time you power down your workstation, your monitor powers down, your printer powers down, your scanner powers down, and so on. You can do the same thing with your entertainment console – when you turn off the television, the cable/satellite box also goes off, as does the video game console, the VCR, the DVD player, and so on. This can save you a lot of electricity and significantly trim your power bill.
DID YOU KNOW…Your credit card can be skimmed? It’s so easy.
The result of a criminal investigation in Florida should service as a cautionary tale about how easy it is to skim credit and debit cards.
Waitresses and waiters are just some of the population that have a small but high-tech tool to get back at you if, say, you’re a bad tipper or you complain too much. Case in point: A Florida waitress who felt abused by customers ran the offenders’ credit cards through a skimmer, essentially stealing their financial identities, according to sheriff’s deputies in Pasco County.
New credit cards made with the skimmed information were used to buy more than $5,700 worth of stuff, which authorities said was then sold for cash.
Credit card skimming is probably more common than you think. It’s one of “5 ways thieves steal credit card data” identified by Bankrate.
Modus operandi: The server whisks away your credit card and swipes it through the restaurant’s register. Then, they pull out a small device, about the size of an ice cube, from their apron and swipe it through that, says Sergeant David Schultz of the Fort Bend County Sheriff’s Office in Texas. While you’re scraping the last of the chocolate frosting from your plate, your credit card information has been stored in the device, known as a skimmer. The server returns your card and performs the same magic trick on dozens of credit cards in a week.
How can you protect yourself?
- You can switch to cash, which seems extreme until something like this has happened to you.
- Keep your credit or debit card in plain sight. That may mean paying the cashier rather than the restaurant server. You can leave the tip in cash.
- Regularly monitor your credit card bills and bank accounts, which could include signing up for alerts.”The latest scheme began to unravel as residents noticed the strange charges on their credit card accounts,” the St. Petersburg Times reports.
- Report any misuse of funds to police and the issuing financial institutions. With a credit card, you’re legally liable for only $50, but credit card companies usually won’t assess even that. With debit cards, you can also limit your liability if you report a loss in a timely fashion.
- If your financial identity has been compromised, put a fraud alert or possibly a freeze on your credit reports.
By Karen Datko www.msn.com
