Why Credit is Essential in a Digital Economy
Our economy is tipping more and more to everything being a digital transaction. Don’t think it’s true? When was the last time you had more cash on you than you did on your debit card? The truth is that most people view “cash” as the money in their personal checking account.
With the rise of the digital economy we must take the time to redefine the different tools and functions in this new environment to make sure we are maximizing our protection and financial system.
The New Age of Credit
For years the “elders” of money and finance have long held onto the fear of change, and who can blame them – it’s their money! Because of this fear, parents, teachers, and financial educators have passed down practices from what seems like the stone ages (you remember checkbooks right?). The truth is that as the digital economy evolves our understanding and use of credit must evolve as well.
In a digital economy credit can be the primary tool to help protect you from online fraud and identity theft. In this article we are going to cover:
- Using Credit to Protect Your Identity
- How to Protect Your Personal Assets
- How to Protect Your Credit Online
- How to Correct Any Issues That May Arise
So let’s jump in head first shall we?
Using Credit to Protect You While Making Online Purchases
Cybersecurity is an ever growing concern with more and more daily transactions taking place digitally. Unknowingly we send out personal information that gets logged with billions of other transactions. Small breaches in security can cause massive chaos (which we saw with Equifax). Let’s face it. Whether a gas station attendant copies our debit card or a major corporation has a data breach that compromises our data – we do not have control of our financial data.
Identity Theft is Unavoidable
Did you know that there are entire websites on the dark web dedicated to selling credit card numbers? They farm MILLIONS of credit cards information every year from across the globe. It is an epidemic that is impossible to get our hands around.
The Government knows this. Banks know this. Lenders know this. Anyone who works in finance knows this as well. It is a problem on the “ethics of humanity” level, so it’s best to assume it will always be there.
Instead of playing dumb on the issue, banks and lenders understand that identity theft is going to happen and have strong safeguards and systems in place to help keep you safe. The losses accrued are calculated in their profit and loss and written off on their taxes at the end of the year. With these numbers in place, they know the cost of doing business and pass it along to you.
Instead of pretending that we are safe by exposing our personal assets to online predators, let’s talk about some strategic ways you can use the bank and governments consumer protection for your advantage.
How Credit Can Protect Your Cash When Making Online Purchases
Lending money is a lucrative business because the lender assumes the risk of the transaction at a fee. This fee for the transaction is your Interest Rate.
Using Credit Cards has had a bad rap for a long time, but in reality, it can be the safest way to conduct business online. Think about it. If you live in Chicago Illinois and purchase gas at a station, and you get a charge from a superstore in Istanbul your going to file a dispute as soon as you can. No matter how you feel about interest, Credit Cards offer a layer of protection for your online purchases as well as other options to simplify your finances and protect your personal assets.
Fraud and Prevention Departments
Credit card companies have entire departments dedicated to your protection and safety. They know identity theft and charges happen, don’t be afraid to reach out to them!
Easy Account Disputes
Credit card companies have made disputing fraudulent charges easy – some even online! Notify your credit card company as soon as you soon as you see suspicious activity.
Ease the Stress of Micro-Purchases and Recurring Bills
It seems like every day there is something else charging you. Small app purchases, recurring subscriptions, and quick stops on the way home. Using credit cards to manage your monthly micro-purchases can help simplify your personal budgeting and keep you accountable for monthly spending.
By using your credit card to track your micro-purchases, you can sit down for 10 to 15 minutes 1 time a month and review your statement showing what you spent. It also gives you the added protection of making sure any unauthorized purchases are not taken from your personal accounts – your cash!
Easy Monthly Reconciliation
The other day our kids asked us what “balancing a checkbook” meant. At first, we were appalled that the school district wasn’t teaching our kids properly, but then it hit us…we don’t carry a checkbook any longer.
With the uprise of the digital economy, the use of checkbooks and trying to cram numbers into a small place is almost obsolete. The tiny lines of a miniature booklet are replaced by free online software such as Mint.com. Using a credit card can simplify your monthly electronic transactions and help give you time to review the accuracy before money leaves your account.
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How to Protect Your Credit in the Digital Ecosystem
Just like identity theft with credit cards, your social security number and personal data are floating around on the dark web as well. At any time you may have bank accounts, medical bills, credit cards, even a mortgage fraudulently opened in your name but there are easy and affordable options to correct these issues (maybe not the mortgage. WOW).
Level 1: Credit Monitoring
Credit Monitoring is a powerful tool for alerts and notifications regarding your credit. We personally like IdenityIQ. The reports are easy to read, they have easy to understand notifications, and they notify you if something suspicious or adverse happens on your credit. IDIQ is also one of the leaders in Identity Theft protection, so you have professionals on your side in case of an identity attack.
Level 2: Credit Repair
The second level of protection against identity theft is credit repair. Mistakes, errors, and data breaches are going to happen. When they do credit repair is an easy and affordable option to have a credit expert review the accounts and correct your credit reports.
Level 3: IdentityTheft.gov
Lastly, if we can’t help, utilizing the services of the FTC on identitytheft.gov is your next step for assistance. Here you can report identity theft and get a recovery plan straight from the Federal Trade Commission and help expedite any issues that may be lingering.
It’s Going to Be Alright!
If you have something reporting on your credit that you believe shouldn’t be there, we can handle the dispute process for you. We have helped thousands of consumers repair their health and accuracy of their credit reports by disputing errors with TransUnion, Experian, Equifax, and creditors.
If your identity is attacked and hackers come after your personal assets there are safeguards in place for you. Be smart with your purchases and feel free to contact Illinois Credit Services if you have any questions or feel that you may be a victim of identity theft.
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