The Search For Cheap Stocks By Ricky Schmidt

Dear Fellow-Investor.

Whenever the stock markets have consolidated and broken down significantly, thousands of bargain hunters are on their way to try and find the one dirt cheap stock in the hope of cashing in large profits once it goes up again!

But when exactly is a stock cheap? For many investors a stock is only cheap when the price-earnings ratio (P/E ratio) is low. So the lower the price-earnings ratio the better it is for them on speculations that it will go to where it was before the stock dropped, if it goes up again.

To recap. A price-earnings ratio shows the multiple of earnings at which a stock sells. Determined by dividing current stock price by current earnings per share (adjusted for stock splits). A higher multiple means investors have higher expectations for future growth, and have bid up the stock's price.

The thing about P/E ratios is that conservative investors should avoid stocks with a high P/E ratio because if these corporations disappoint with their earnings and don’t meet market expectations, the stock will drop dramatically like Whole Foods did dropping more than $20 at the beginning of November 2006.

If a stock has a low P/E ratio, where expectations aren’t that high, the reaction is far less dramatic if earnings and performance expectations aren’t met.

But if trading and investing in the stock market was that easy, everybody would just buy stocks with a low P/E ratio. To bad so sad that no one would have then had Starbucks in their portfoilo. A stock that shot up sky high in the past. A low P/E ratio doesn’t exist in Starbucks vocabulary!

If you disregard individual stocks that have dropped sharply and take a look at the broad market, you’ll surprisingly notice that a P/E ratio tells you absolutely nothing about whether a stock is going to go up or down in the future! Not only stocks with a high P/E ratio can drop, but also stocks with a lower one can.

A good example of the above is the following:

Within the last 4 years the Dutch financial company ING, having a low P/E ratio, climbed to the skies from $10 to over $40. That’s over 300% profits, whereas AIG (American International Group), also having a low P/E ratio, was virtually dead in comparison.

On the other hand, Starbucks and the German cosmetic company Beiersdorf kept on going up although both companies had a high P/E ratio whereas Whole Foods, also having a high P/E ratio, dropped from $80 all the way down to $40 in 2006, and EMC² is still hovering around $15 and hasn’t recovered yet since 2000 where the stock was trading at just over $100.

So as you can see, there are no rules whether a stock with a high or low P/E ratio is good or bad!

Why doesn’t this strategy work?

The problems already start at the very beginning. Which earnings should one take into account? The reported earnings from the previous year; the expected ones for the current year or even the forecasted earnings for the next year?

Because the stock market mainly looks at future performance and earnings, the future P/E ratio plays a more important role. But even the expected earnings of the current year can only be estimated let alone the one for next year. It all boils down to estimation and speculation which is quite common in the stock market. But if these estimates are wrong and market expectations aren’t met, investors are then commonly very disappointed and the stock or even the whole market goes down. And this happens every year somewhere along the line.

And this is not the only reason why a P/E ratio is not a good formula for success. The furure performance of a corporation depends on so many factors. A future stock price doesn’t only depend on earnings from the current year or the next. It also depends largely on how well the management does it’s job, whether the company has a strong product line or which possible problems the company may face.

An example of this is Apple (AAPL). When CEO Steve Jobs introduced the iPhone in Jan. 07, AAPL shot up by over $10 in two days. But then Cisco Systems (CSCO) claimed that they had the rights to the name iPhone and were contemplating to sue AAPL if they were to continue using the name iPhone. Well. Guess what happened? AAPL went down the following days losing it’s entire $10 gain.

So once again you can see that a P/E ratio, whether high or low, says way too little to base an investment decision on!

Conclusion

At the end of the day, P/E ratios or any other ratios are absolutely irrelevant. What matters most importantly in the long run are earnings and the overall performance and future outlook of a company! Short-term factors like oil prices, political turmoil etc. can influence the markets and they will more often than not! But in the end these factors are secondary and negledgible for long-term investments.

Yours In Successful Trading!

Ricky Schmidt

Resource: http://www.isnare.com/?aid=122529&ca=Finances

Affordable Health Insurance In Tennessee By Elizabeth Newberry

Affordable health insurance in Tennessee can be obtained through Cover Tennessee, a volunteer health insurance in Tennessee which is not only affordable to the state, but is also affordable to participants of Cover Tennessee. Cover Tennessee is designed to provide affordable and obtainable health care coverage for Tennessee residents who are without health insurance because they can not afford to purchase a health plan, or because they can afford to purchase a health plan but are continually turned down for health coverage due to a pre-existing health condition or severe ill health.

States across America are struggling to help their residents find affordable health insurance. Some Americans can not afford health insurance at all, while some can afford health insurance but can not obtain it because it seems that all health insurance companies they consult deem them “uninsurable.” Tennessee recognizes that children and adults alike are in need of affordable health insurance as well as coverage for prescription medication; therefore Tennessee has developed Cover Tennessee, a program similar to other health insurance and health care programs developed by other states throughout America.

Cover Tennessee is actually comparable to a gigantic umbrella, housing the five different “parts” of the Cover Tennessee health insurance coverage: CoverTN, CoverKids, CoverRx, AccessTN, and ProjectDiabetes. Thanks to each of these Cover Tennessee components, uninsured individuals, including children, can obtain adequate and affordable health insurance in Tennessee as well as coverage for prescription medication. Also, school-aged children learn about healthy eating habits to prevent diabetes and obesity through ProjectDiabetes.

To find out more information about Cover Tennessee and its various health insurance coverage programs, visit Tennessee’s Department of Commerce and Insurance Web site or give them a call. You can also visit the official Cover Tennessee Web site at http://CoverTN.org or call them at 866-CoverTN.

Everyone deserves affordable health insurance, and the Cover Tennessee program is working toward making it possible for Tennessee residents to obtain it.

Resource: http://www.isnare.com/?aid=122955&ca=Finances

Debt Termination Plan By Dallas Kelso

How do you feel when your bills arrive each month? Do you get that dreaded feeling where it feels like your heart is sitting in your throat, or do you see that you owe little of no money on your bills? Sound like a dream? Its not!

Let me explain in more detail. After reading a book many years ago from an author called John Burley, he referred to a program called Debt Termination Plan. In simple terms, this plan took a look at all your outgoing expenses, and looked at the minimum amount required to pay each month and divided by the debt for each of those items. This would then produce a ratio and give you the order in which to pay off those debts, and if performed correctly, it meant you could eliminate your debt in seven years or less!

One of the problems that we come across on a regular basis with our prospective home buyers, is that they do earn enough money to afford to pay off their own home, but they have not got the right formula to eliminate their debt in a way that makes them feel they are making steady progress. To address this problem, we came up with a more automated way of processing a Debt Termination Plan that was interactive with our clients. At the We Buy Homes web site, we have made a page that helps its visitors anywhere in the world to work our a Debt Termination Plan that is just right for each person.

Once you establish a plan, you have something to work with to measure and track your success. However, its not just your debts that need to be serviced and eliminated. You still have the monthly, quarterly and yearly bills that will arrive whether you like it or not. We have found the following method to be most helpful to achieving better financial health:

1. Look at your regular bills and what they cost on average per pay cycle. By this we mean, if you get paid monthly, then average these expenses out monthly.

2. Find out how you can setup an automatic payment immediately after you get paid, to deposit this average monthly amount to the companies who regularly send you a bill (phone, power etc).

3. Monitor these payments from month to month, just to be sure you are not paying too much. While you want your bills to have little or no money owing on them when you receive them, it does not make any sense to be in major credit either.

When you learn to follow these three simple steps above combined with the Debt Termination Plan, you will be amazed at how quickly you will get control of your finances, and work towards a better future.

So what are you waiting for? Get started to stress free money management today. You will be glad you did.

Resource: http://www.isnare.com/?aid=122677&ca=Finances

Joint Loan Application Tips By Peter Kenny

If you are living with a partner or family member and you need some money but don't have the means, then you should think about applying for a joint loan. Joint loans can help you and a partner or family member both get their hands on more money than you could individually, whilst sharing the burden of repayment. If you want to know more about joint loans and how to apply for them, then here is some useful information that might help.

Who can I get a joint loan with?

Joint loans are not available for all types of relationship, but are in fact limited to certain partnerships. Married couples are the most common joint loan applicants, although unmarried couples are not eligible. Some companies will allow applications during engagement, but the loan will not be given until after marriage. Also accepted are applications from a parent and child. Although some loan companies also consider two brothers, all other sibling and family relations are generally not accepted.

Getting more money

The main reason to jointly apply for a loan is to get a larger amount of cash than you might be able to if you were applying on your own. Married couples or parents and children can include both of their incomes to allow for a larger loan to be taken out. If you have a similar salary, then you can usually double the amount that you can borrow.

Unequal earnings

Applying for a joint loan doesn't mean you both have to have excellent salaries. Even if one of you doesn't have a salary, but money earnt from a part-time job or other work, this can help you both to get more money. As long as you are both earning and can make a contribution to the repayment it will be in your interests to apply jointly.

Both responsible

Although both of you will get benefits from the loan, it is important to remember that you are also both responsible for the repayment of the loan. Even if you are married and split up, the amount still owed on the loan will need to be paid back by both of you. Of course there is more risk of default than a normal loan, because should one of you stop payments then the other may not be able to keep up and so you will both end up in default. This means you risk having your credit history damaged even if you were not responsible for the debt problem. Make sure that you can definitely afford to pay the loan back, even if you are no longer living with the other applicant.

Who should get joint loans?

Although most married couples are eligible to apply for a joint loan, they are not right for everyone. If one of you has a poor credit history or earns significantly less than the other, a joint loan may not be the right choice for you. Also, try and make sure that any joint loan you take out will benefit both of you. Just because you can get more money does not mean that money will benefit you both. Always use joint loans to fund something that will help you both, so that you can get the most out of your loan.

Resource: http://www.isnare.com/?aid=122727&ca=Finances

Really Cheap Car Insurance - Starts Here By Elizabeth Newberry

The best way to make sure you always get really cheap car insurance, or as cheap as you can get depending on where you live, the type of car you drive, and your car’s safety features, is to start from the very beginning. This means paying close attention to your driving record.

Once you obtain your driver’s license, you will have what is called a driving record. A driving record is sort of like a driver’s report card; however, driving records only record the bad grades. Any driving-related jams you find yourself in over the course of your driving career will be recorded on your driving record in the form of points. The number of points you receive for each traffic violation, infraction, ticket, accident, etc. will depend on the state in which you live because each state has its own driver point system.

Car insurance companies look at a driver’s driving record when considering whether or not to offer the driver a car insurance policy, as well as when determining how expensive or cheap the driver’s car insurance policy will be. Those drivers with stellar driving records are more likely to receive really cheap car insurance quotes than those drivers with several points on their driving records.

By becoming, and remaining, a safe driver from the very beginning, you are increasing your chances of getting a really cheap car insurance quote.

However, if you do develop a blemish on your driving record, you most likely will not be scarred for the rest of your driving life. Most states have systems in which you can lower the points on your driving record. Many states even allow you to choose other options in order to avoid the points altogether, such as taking a defensive driving course. Remember, it is important to take advantage of these point-lowering or point-avoidance options; otherwise, you might find it difficult to get really cheap car insurance.

Resource: http://www.isnare.com/?aid=122385&ca=Finances

A Look At The Billionaires Who Made Their Money Because Of The Internet By Gray Rollins

In today’s economy, with so many companies down-sizing and even going under, you may be wondering what your next move should be in terms of securing employment. Well, the internet is certainly one area of business that keeps growing and growing and growing. And not only are people finding ways to stay in business, they’re actually making real money at running internet-based businesses. Some are even making millions and others billions. Interested in knowing more about these modern-day tycoons? Let’s take look at who they are and how they did it.

Search Engines

Sergey Brin and Larry Page, the owners and creators of Google, were estimated to be worth $43 million in 2004. Since then, their business has continued to grow and these guys are presently two of the richest people in the world. Their internet-based information system, Google, is now worth an estimated $155 billion with a stock purchase price surpassing the $500 mark. One of the reasons Google has continued to grow and succeed is while others tread water or fail is because their service has been disruptive by consistently changing for the better and creating new ways of directing more and more traffic to their site.

David Filo, who was actually working toward obtaining a Ph, D in Electrical Engineering at Stanford University, co-founded and developed Yahoo! in 1994 and is presently estimated to be worth $3.12 billion dollars. And even though competitor sites like Google, AOL and MSN are giving Yahoo! a run for their money, so to speak, it’s managed to remain one of the most powerful and valuable search engines on the internet through joint ventures and other innovative concepts.

Internet-Based Auction

Computer Science graduate and creator of eBay, Pierry Omidyar along with his wife Pam, are estimated to be worth over $10 billion. Originally called ‘Auction Web’ at its actual inception, the eBay site was launched on Labor Day, September 1995 based on Pierry’s curiosity to see what would happen if all people had equal access for trading in a common venue. It has grown by enormous leaps and bounds since then with exceedingly high membership numbers in both the buyer and seller market, in addition to great expansions within their corporation as well.

Merchandising

Founder, President, CEO and Chairman of Amazon, Jeffrey Bezos, launched the site in 1994, after time spent working as financial analyst upon graduating from Princeton University. He was once quoted as saying: 'I'm going to go do this crazy thing. I'm going to start this company selling books online'. Well, if crazy leads to success, here’s to it! Bezos is currently worth $3.6 billion and is ranked number 70 on Forbes’ 2006 list of the world’s wealthiest people.

You don’t have to be a genius or even a college graduate to reach the levels of success these people have. One great idea is all it takes – so follow your dream, work hard and you never know – you could be the next internet billionaire!

Resource: http://www.isnare.com/?aid=121559&ca=Finances

The Perfect Package For Homeowners By Sally R Johnson

A personal loan is a great way to finance improvements on your house. In essence, the loans are used to maintain and often even increase the value of your home. You can use the money for repairs, a new kitchen or bathroom or for an extension, conservatory or loft conversion. Generally, any action that can be considered to increase the value of your property in such a way that it increases the expected sales value of the home can be deemed to be making home improvements so, if you’re really ambitious, this could even mean adding a swimming pool or tennis court to your home.

Unlike some other forms of borrowing used for home improvement purposes, a personal loan is different to home equity release or refinancing your mortgage and it is a form of borrowing which is very popular because of its unique advantages and flexibility in its structure. Depending on the amount you wish to borrow and over what repayment term, you can opt for the unsecured or secured route. The unsecured option is usually chosen for smaller amounts (up to £25k) repaid over a shorter period of time (10 years or less), so if your plans are more costly than that and/or you need longer to repay the loan, then the secured route or some other form of financing will probably apply.

Personal loans are available from banks and private lenders and acquiring one is an easy task these days as you can apply online and can have the loan approved really quickly, especially if it’s an unsecured loan. The speed at which the loan application will be decided will, of course, differ depending on whether or not you opt for a secured or unsecured personal loan.

Unsecured loans come with a higher interest rate than the secured option as there is more risk to the lender with but a reputable broker will be able to offer you advice and establish a quick and easy solution that’s tailored to your needs.

So, for home improvement projects, a personal loan is the perfect package for homeowners.

Resource: http://www.isnare.com/?aid=122706&ca=Finances

The Truth About Bad Credit Loans And Mortgages By Chris Copper Jnr

Many people will have the experience of facing financial difficulties at one time or another for a variety of reasons. Being a little short of money can result in you falling behind with bills, bank loans, credit cards, mortgage repayments and alike.

This in turn can lead to having defaults, County Court Judgements (CCJ’s) and even bankruptcy. Even if the problems are short lived they can still tarnish your credit record and make it difficult for you to obtain finance.

There are no accurate figures on the amount of people that get turned down for a mortgage from a high street lender, but it is widely estimated that it is about 1 in 5. Generally this is due to minor misunderstanding and can often be resolved. But even after this it is estimated that one in eight people will not be able to get a main stream mortgage and have to go to a specialist lender.

Why Do People Get Turned Down For Credit?

There are a number of reasons and situations for which someone will be turned down for a mortgage. It may simply be that the applicant has put down some incorrect details on the application form. Another reason might be that your previous landlord did not bother to confirm that you used to pay the rent on time.

Another more serious reason that people get turned down for a mortgage is that they do not have enough credit points. When you apply for a mortgage the lender will carry out a credit check on you.

You will gain credit points for a number of reasons for example if you have had the same address, job and bank account for a long time. Also people that keep up to date with repayments will gain points as well. But you will lose points if you have defaulted on debts, fallen behind with bills, have CCJs or have been made bankrupt.

What Can You Do If It Happens To You?

If you do get turned down for a mortgage or loan the first thing you should do is find out why. If you did fail a credit score the lender may not tell why, the credit agency that they used will know. It may be a mistake on their part, or an old default that should no longer be on your file.

The best thing to do is to get hold of your credit record from one of the agencies. The three main agencies are Equifax, Experian and Call Credit. If there is some kind of mistake then you can get it sorted.

Another reason that you may get declined a mortgage or loan is because you have not built up enough credit history. If this is the case then it might be an idea to take out a couple of good credit cards (there are always good deals to be had). Use them to purchase things and pay them off straight away.

What If You Have Had Serious Credit Problems?

If a high street lender turns you down for a secured loan or mortgage, then you will need to look towards the sub prime or bad credit market place. These specialist lenders have a vast array of bad credit loans to cater for people in a variety of different situations. Whether it is just a defaulted credit card that happened 12 months ago for £300 or a recent CCJ for which you still owe thousands. Whatever your situation is the chances are you will be able to find a lender.

Generally the worse your credit history is the higher the rate of interest you will pay, this is because you pose a higher risk to the lender. For example if you have two CCJs you will pay higher rate than someone who has a single default. The good news is that you have plenty of choice, there are thousands of deals out there for people with credit problems.

The easiest way to find a deal and suitable mortgage or loan product is to use a broker. The broker can carry out a credit search and based on the results they will be able to determine what your best options are. The majority of the bad credit lenders are not household names. Some of these lenders are owned by American companies and others are subsidiaries of high street lenders.

Getting The Best Deal

As previously mentioned the worse your credit history is, the higher the interest will be. If you have a light bad credit history, then as long as you keep up with repayments then you might be able to switch to a mainstream deal after two years.

If you have heavy bad credit history then you may have to wait three years before switching lenders. So for this reason it can be advisable to avoid products that tie you in for long periods.

So when the deal comes to an end, and you have kept up with your repayments you should look to move to a standard deal, possibly with a high street lender. Hopefully by this time your bad credit history will be long behind you.

Resource: http://www.isnare.com/?aid=122754&ca=Finances

The Truth About Bad Credit Loans And Mortgages By Chris Copper Jnr

Many people will have the experience of facing financial difficulties at one time or another for a variety of reasons. Being a little short of money can result in you falling behind with bills, bank loans, credit cards, mortgage repayments and alike.

This in turn can lead to having defaults, County Court Judgements (CCJ’s) and even bankruptcy. Even if the problems are short lived they can still tarnish your credit record and make it difficult for you to obtain finance.

There are no accurate figures on the amount of people that get turned down for a mortgage from a high street lender, but it is widely estimated that it is about 1 in 5. Generally this is due to minor misunderstanding and can often be resolved. But even after this it is estimated that one in eight people will not be able to get a main stream mortgage and have to go to a specialist lender.

Why Do People Get Turned Down For Credit?

There are a number of reasons and situations for which someone will be turned down for a mortgage. It may simply be that the applicant has put down some incorrect details on the application form. Another reason might be that your previous landlord did not bother to confirm that you used to pay the rent on time.

Another more serious reason that people get turned down for a mortgage is that they do not have enough credit points. When you apply for a mortgage the lender will carry out a credit check on you.

You will gain credit points for a number of reasons for example if you have had the same address, job and bank account for a long time. Also people that keep up to date with repayments will gain points as well. But you will lose points if you have defaulted on debts, fallen behind with bills, have CCJs or have been made bankrupt.

What Can You Do If It Happens To You?

If you do get turned down for a mortgage or loan the first thing you should do is find out why. If you did fail a credit score the lender may not tell why, the credit agency that they used will know. It may be a mistake on their part, or an old default that should no longer be on your file.

The best thing to do is to get hold of your credit record from one of the agencies. The three main agencies are Equifax, Experian and Call Credit. If there is some kind of mistake then you can get it sorted.

Another reason that you may get declined a mortgage or loan is because you have not built up enough credit history. If this is the case then it might be an idea to take out a couple of good credit cards (there are always good deals to be had). Use them to purchase things and pay them off straight away.

What If You Have Had Serious Credit Problems?

If a high street lender turns you down for a secured loan or mortgage, then you will need to look towards the sub prime or bad credit market place. These specialist lenders have a vast array of bad credit loans to cater for people in a variety of different situations. Whether it is just a defaulted credit card that happened 12 months ago for £300 or a recent CCJ for which you still owe thousands. Whatever your situation is the chances are you will be able to find a lender.

Generally the worse your credit history is the higher the rate of interest you will pay, this is because you pose a higher risk to the lender. For example if you have two CCJs you will pay higher rate than someone who has a single default. The good news is that you have plenty of choice, there are thousands of deals out there for people with credit problems.

The easiest way to find a deal and suitable mortgage or loan product is to use a broker. The broker can carry out a credit search and based on the results they will be able to determine what your best options are. The majority of the bad credit lenders are not household names. Some of these lenders are owned by American companies and others are subsidiaries of high street lenders.

Getting The Best Deal

As previously mentioned the worse your credit history is, the higher the interest will be. If you have a light bad credit history, then as long as you keep up with repayments then you might be able to switch to a mainstream deal after two years.

If you have heavy bad credit history then you may have to wait three years before switching lenders. So for this reason it can be advisable to avoid products that tie you in for long periods.

So when the deal comes to an end, and you have kept up with your repayments you should look to move to a standard deal, possibly with a high street lender. Hopefully by this time your bad credit history will be long behind you.

Resource: http://www.isnare.com/?aid=122754&ca=Finances

What You Need To Know About Online Tax Filing By Robert Shaw

Filing your taxes is easier than ever with eFile, the online tax filing service provided by the IRS. Although there are many people who still file the traditional way by snail mail, as many as 73 million taxpayers filed their taxes online in 2006. In fact, there is little reason to ever mail your taxes in again.

The Benefits of Online Tax Filing

Each year, the benefits of online tax filing gets better and better. For example, in 2007, the IRS has set up “Free File”. This program allows individuals who make less than $52,000 a year to file their taxes online free. In other instances, the price of filing online is as low as $19.95.

Other than the price of online tax filing, you’ll find that filing your taxes on your own is much easier with eFile. You’ll simply have to gather your W2s, 1099’s and other documents and you’re ready to go. Usually, you’ll be using tax filing software or web-based programs online. These programs will walk you through the steps, including the forms you will use, like the 1040A or 1040EZ. And if you need help, all you have to do is click a button. Even individuals who have never filed taxes before can quickly fill in the blanks with the step-by-step instructions given.

If you prefer to file your taxes with an accountant or tax specialist, eFile will come in handy when it comes to receiving withholdings or paying taxes that are due. To use eFile, just tell your tax professional that you’d like to eFile your taxes this year. When you file your taxes online, you have the choice of receiving your refund by direct deposit. Simply fill in your routing number and checking account number when asked. The best part is that your money will arrive in about half the time it normally takes. Plus, you can skip the line at the bank!

What You Need to File Your Taxes Online

If you decide to file your taxes via your home computer, you’ll need internet access, your social security number, W2s and 1099s and documents for your deductions. You should also have last year’s Adjusted Gross Income ready as a security check. Finally, visit the IRS website for a list of sites that offer online tax filing for little or no charge. Once you choose the right place, just fill in the blanks and select “eFile” when asked. If you choose to receive your refund by direct deposit, have a personal check ready so you can type in your routing and account numbers.

If you choose to have your taxes filed by a tax preparer, bring in all the necessary documents such as your W2’s, 1099’s, receipts, checking account information (for direct deposit) and last year’s tax paperwork. Your tax professional will do the rest. Just remind him or her that you’d like to eFile.

The Bottom Line

With the online tax filing programs the IRS has put in place, there is nothing to lose by filing your taxes online. There is no risk of mail getting lost and never reaching its destination. Step-by-step instructions will help you avoid mistakes and help is available instantly. In addition, paying taxes is much easier and receiving a refund is much quicker. You’ll save yourself a lot of time and hassle, especially if you usually file taxes on your own. Simply put, online tax filing is the new standard for filing your income taxes!

Resource: http://www.isnare.com/?aid=122259&ca=Finances

Keeping Your Credit Card Safe And Avoiding Fraud By Tracey Morgan

Credit card companies and their customers all have to think about and face up to the possibility of fraud. Both sides have a responsibility to take steps to try and reduce the risk of becoming a victim of this type of crime.

Credit card customers are not usually liable if their account is involved in fraud, unless they have been negligent. Negligence could include for example disclosing a PIN number or keeping a PIN number with their card. Credit card companies will take note of any unusual transaction on the account and contact customers to check the spending is genuine (this will not affect your credit rating).

In order to avoid fraud it helps to be aware of the methods used by fraudsters to obtain and misuse credit cards.

What is credit card fraud?

Counterfeit fraud – this is the most common type of card fraud. The data on the magnetic strip on a credit card can be copied electronically onto another card in a process called skimming. This is most likely to happen at cashpoint machines, shops, bars, restaurants and petrol stations. The card holder will be unaware that skimming has occurred. It is hoped that skimming will be reduced now that the more secure chip and pin system has been introduced.

Loss or theft of cards – if you lose your card or it is stolen it is most likely to be used in the first few hours. Therefore it is important to report the loss immediately to the company and the police.

Interceptions in the post – new cards and cheque books can be intercepted while in the postal system. If you are expecting a card/cheque book and it is not delivered then you should inform the bank.

Theft of account details – it is recommended that any paperwork which shows account details should be shredded. This could include statements, receipts and store cards. Details obtained from rubbish bins can then be used where the cardholder is not present, for example mail order and internet transactions. The cardholder may be unaware of any problem until their statement arrives.

Identity fraud – Personal documents and other items such as utility bills can be stolen and used to take over your identity. You should therefore be careful about how you discard unwanted items. It is best to destroy personal documentation. Be warned that your credit rating can be affected if you are a victim of identity fraud. Credit reference agencies can provide a copy of you annual credit report if you are concerned about this possibility. You will then be able to see if accounts have been opened using your name.

Cashpoint fraud – cards are often stolen along with their PIN number. When using a cashpoint machine make sure that nobody can see you entering the PIN number. Put your card and cash away safely before leaving the cashpoint and keep any printed items to discard safely later. If you suspect the machine has been tampered with or the machine does not return your card, then contact the bank immediately.

Steps you can take to protect yourself from fraud

There is a lot you can do to keep your card safe and reduce the risk of fraud.

Firstly don’t carry your cards in a pocket or on the top inside a bag where they can be stolen more easily.

You should never tell anyone your PIN number even if they claim to be the card issuer or police. Also never write the PIN number down and carry it with you.

When using a cash machine be aware of anyone talking to you and possibly trying to distract you as they may be watching out for your PIN number.

Keep your card company’s lost and stolen contact number to hand so that you can report any loss or theft immediately. Also remember to take the telephone number with you if you travel abroad.

Do not lose sight of your card or leave it where details could be copied. For example in a restaurant the waiter should bring the terminal to the table or you should go to the till.

Always check your statement when it arrives and report any unknown transactions to the card company. If you keep your details with the company up to date then they will be able to contact you immediately if they suspect any misuse of your card.

Is it safe to use credit cards online?

Millions of people in the UK now use the internet to shop regularly online but many also wonder how secure the internet is. As long as you are careful and take some simple precautions, shopping on the internet can be safe as well as convenient.

Firstly only use websites you know you can trust because they are well known or have been recommended. Make sure you know who the seller is by asking for a telephone number and postal address but do not accept a mobile number or a post office box number. It is unusual for credit card fraud to be the result of computer hackers breaking into a system and stealing card details. As with phone and mail order fraud, internet fraud mostly happens because a credit card has been lost or stolen so the most important thing is to keep your card safe. Remember you should still sign the signature strip on the back of the card even though most now use the chip and PIN system. Never be tricked into revealing your PIN number or passwords to online accounts. It can be easy to respond to unsolicited emails, phone calls or cold callers without realising that the real reason for the call is to obtain information useful to criminals.

When you are shopping online you may well be given the chance to use a scheme involving use of a password. For example Verified by Visa (www.visaeurope.com/verified) or MasterCard SecureCode (www.mastercard.co.uk/securecode). You should accept the offer to sign up to one of these schemes. If a fraudster does not know your password they will not be able to use your card details on any internet shopping sites participating in the scheme.

You should also take care to only use secure websites for shopping. Your browser window should display a security icon at the bottom of the screen before you enter any credit card information. When you submit an order using a secure connection the beginning of the website address will change from “http” to “https”.

It is vital to protect your computer and ensure it is secure. Simple steps such as using a start up password rather than an automatic login feature all help. You can disable any browser option that remembers your username and password and also file sharing software. This will mean that only you have access to your computer and the data stored on it. Make sure your computer has the latest anti-virus software and a firewall installed and set your browser to the highest level of security notification and monitoring. When you install your computer these safety options may not be the default. The most widely used browsers have websites with the latest version available to download.

When shopping online it is a good idea to print out your order and also to keep copies of terms and conditions, returns policy and so on. If there is a problem with the order you will then have all the relevant information to hand when contacting your card company. This is particularly important if you are buying from abroad as it can be more difficult to sort out any problems.

Resource: http://www.isnare.com/?aid=122748&ca=Finances