At one point or another, it’s happened to nearly all of us: For one reason or another, we spent more than our available checking account balance. And most likely, we wound up paying an overdraft fee for the privilege. In years prior to the day I “smartened up” financially, I probably gave my credit union several hundred dollars in overdraft fees because I was frequently either carless, broke, or both.

Needless to say, in the years since then, learning to balance my checkbook and save financial reserves has saved me untold amounts of money. If you want to do the same, it’s important to understand why overdraft protection exists and how it works.

And that’s never been more important than today, because the way banks handle overdraft protection features (and the accompanying fees) is changing. [...]

All worked up about identify theft? Don’t be. This post concludes my four-part series on identity theft in recognition of “Identity Theft Protection Awareness Week” which is coming up. It’s a revision of a post I did a while back originally titled “Identity Theft: How to Prevent it and Stop Worrying.” Some comments on the original post raised a good point—you can’t ever totally “prevent” identity. There’s always a chance your identity will be compromised. You can, however, take steps to protect your identity every day.

Have you ever heard the old advice: “If you can’t do something about it, don’t worry about? If you can do something about it, then do it.” This holds true for identity theft. There’s always a chance criminals can get their hands on your credit card numbers or, worse, your Social Security number, and run up fraudulent charges or debts in your name. It’s not worth losing sleep over as long as you’re taking a few simple steps to make scam artists’ jobs harder. [...]

If you have an e-mail account, you’ve probably gotten an e-mail that looks like it is from a financial institution that reads something like this:

In a routine update of our customer records, we couldn’t confirm your information. Please click here to verify your customer information.

If you receive such an e-mail, watch out! It’s definitely not from a bank. It’s fraud called “phishing”. [...]

Talk about serendipitous. I’ve been planning today’s post on credit card and ATM “skimmers” (jerry-rigged little devices criminals use to steal your card numbers), and yesterday my brother tells me he spotted one of these suckers at a rest area on the New York Thruway. He alerted managers, who called the cops, who confirmed it was a skimmer. It just proves that skimmers are a real threat out there. Skimmers give fraudsters easy access to unwitting victims’ credit and debit card numbers—even PINs. Here’s what you need to know to avoid these nasty things.

How Skimmers Work

There are two big ways criminals use credit card skimmers to steal your information:

• They stealthfully install a skimmer on an ATM or self-serve kiosk and capture your card information when you swipe your card at the kiosk. Sometimes the machine still works, and you never know anything is wrong. Sometimes the skimmer disables the machine, but you’ll just assume it’s out of order and move on.
• Or, they get a hold of your credit card and skim your card manually (an easy racket for an unscrupulous waiter who could do this when you hand over your card to pay the bill).

[...]

The CARD Act could go into effect as soon as December. Although legislators passed the CARD Act with Americans’ best interests in mind, the act also means credit card users may see higher interest rates and fewer rewards. And for anyone under 21, the CARD Act will make it much more difficult to get a credit card.

The CARD Act’s Under-21 Restrictions

The CARD Act stipulates that creditors are prohibited from extending credit to consumers individuals (I hate the word consumer) unless:

• the consumer individual has submitted a written application that meets specified requirements and
• the application is signed by a cosigner, including the parent, legal guardian, spouse, or any other individual who has attained the age of 21 having a means to repay debts incurred by the consumer borrower in connection with the account.

What I Think

When I first heard about the under 21 provision in the CARD Act, I said “that’s a great idea”. That’s because I started getting into hot water with credit cards way before my 21st birthday. But as I’ve had some time to chew on the idea, I’m starting to think it stinks. [...]

It’s a hot-button question: If you’re in debt, do you get rid of all of your credit cards and stick to debit cards and cash only? Or can you discipline yourself to still use credit cards for routine purchases and pay the balance off in full every month, even if you’re digging out of existing debt? I’ve chosen to continue using a credit card for monthly purchases, with a keen eye on making sure I can pay it off each month. Others argue that total credit elimination is the only sure-fire way to rid yourself of debt. But that leaves you with debit cards. Although convenient, debit cards are not perfect.

In fact, debit cards have created so much controversy recently, on Tuesday two of the nation’s largest banks—JPMorgan Chase and Bank of America—announced plans to eliminate and lower fees and provide new ways for customers to opt-out of overdraft protection. The banks’ plans will make it harder for debit card users to overdraw their checking accounts when making debit card purchases and reduce fees for those overdrafts that are currently between $25 and $40 a pop. Still, there are a number of debit card dangers you need to watch out for. [...]

AT&T Wireless Visa debit gift cards that come as rebates for iPhone, Blackberry, or other mobile phone purchases are a raw deal! AT&T advertises prices for popular mobile phones that include $50 or $100 off in the form of a Visa gift card that the customer must apply for after the purchase. But…most customers will never get to use the card for the full $50 or $100. [...]