Monday, 30 June 2014

Loan Application Rejected – What’s Next?

Have you ever applied for an auto loan, a home loan or a personal loan? What if the loan application got rejected? What to do next? Rejection of any kind is one of the greatest fears that lie within us. But there is also a way to address this. Put on your thinking cap to understand what you should do next when your loan application gets rejected.
 
Know and understand: Check with the credit institution to know the reason for the rejection. Try and understand the reason. According to the Reserve Bank of India, "A bank cannot reject your loan application without furnishing valid reason(s) for the same."
 
Has the rejection happened due to a low credit score? Does it point to poor payment history? Are those reasons reflecting in your credit history? It's time to check your credit report to know the specific reason or if there is any other reason behind it.
 
Recheck your credit score: A low credit score could be one of the reasons why the credit institution rejected the loan application. There are several credit scoring models that different credit institutions follow - it could be its in-house scoring model or a credit score obtained from a credit bureau. It is advisable to check your credit score with one of the credit bureaus in the country to know how credit healthy you are.
 
Do an error check: A credit report contains your demographic details, credit account details and payment history. Do a check whether there are errors on your credit report related to your personal details or account details. If you find some information that is not related to you, it needs to be rectified and updated by the respective credit institution and then at the credit bureau.
 
Seek help: Do you need help to understand your credit report? Do you find it difficult to read your credit report? Credit counsellors can guide you in understanding and reviewing your credit report. They can also suggest ways to improve your credit score. Seek the guidance of these experts.
 
Rejections are always a learning experience. So stop worrying and be a little more alert, a little more prudent, a little more assertive and a little more proactive. Just be disciplined and a window will open again.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: Business Insider

'Stop Cyber-crime Army' To Be Set Up In Kerala Schools

Kochi: The higher education department in Kerala Monday launched a cyber safety awareness campaign as part of which a "Stop Cyber-Crime Army" will be formed in all schools in the state, officials said. 
 
State-owned IT venture Infopark is playing host to the cyber safety awareness campaign.
 
"Infopark will always be at the forefront to promote anti-cyber crime initiatives. In this digital age, it is a matter of concern that cyber crimes are increasing at an alarming rate in our country," said Infopark chief executive Hrishikesh Nair.
 
"The best way to counter them is by educating the society of the risks and vulnerabilities involved in our increased dependency on the internet," he said. 
 
The "Stop Cyber Crime Army", comprising volunteers of the National Service Scheme (NSS), is the brainchild of the higher education department. 
 
The campaign is supported by Orgpeople India Foundation, the official educational partner of Kerala Education Department, and Avanzo Cyber Security Solutions Pvt Ltd. 
 
One lakh students are being targeted under the campaign.
 
NSS volunteers in Kerala will be provided special training to conduct cyber safety awareness classes in banks, clubs, libraries and resident associations in their areas. 
 
Raycast Technologies, a company being incubated at the NRI-Technology Business Incubator at Infopark, has developed a computer game application for the campaign. 
 
"The 'Stop Cyber Crime' game application is aimed at creating awareness about cyber security among all sectors of the society," said Abhishek Mohan, CEO of Raycast Technologies.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Zee News

Thursday, 26 June 2014

India Second In Terms Of Debit Card Frauds

A global fraud study of more than 6,100 consumers across 20 countries revealed that one in four consumers is a victim of card fraud in the last five years. India stands second in terms of debit card fraud rate at 32%, as opposed to 21% in 2012.
 
Card fraud is comprised of unauthorized activity on three types of payment cards-debit, credit and prepaid. Cardholders experience fraud at very different rates around the globe, and each type of card has unique fraud challenges.
 
About 41% of respondents in India have experienced card fraud in the past five years, as opposed to 37% in 2012. The study conducted by ACI Worldwide and Aite Group, also highlighted that the highest rate of fraud on prepaid cards is experienced by consumers in India at 18%.
 
According to the study, UAE tops the list of countries with highest rate of fraud overall, followed by China, India and the US.
 
The study called 'Global Consumers: Losing Confidence in the Battle Against Fraud', stated that there has been a significant rise in the number of fraudulent activities in the financial services space. It is observed that more than 1 in 10 have experienced fraud multiple times during the past five years.
 
"Given this latest data, financial institutions have their work cut out for them, both in terms of educational and preventative measures," said Shirley Inscoe, senior analyst, Aite Group. "Consumers lack confidence in their bank's ability to protect them from fraud, so banks must remain vigilant in their fraud migration efforts or face increased customer attrition."
 
About 28% of Indian consumers said that their financial institution sent a new debit, credit, or prepaid card to them only once during the past year because of a data breach or fraudulent activity.
 
With 1,367 confirmed data breaches in 2013 alone, the security of the financial services value chain is top-of-mind. As organized fraud rings relentlessly develop new methods of stealing funds and identities, consumers are increasingly losing confidence that there is anything that can be done to reverse this downward spiral.
 
"Consumers are increasingly concerned about fraud, and are losing confidence on a variety of levels," said Subhashish Bose, senior fraud consultant, Payments Risk Management Solutions, ACI Worldwide. "They are unsure that their financial institutions can protect them against fraud; they use replacement cards less often due to a loss of confidence in the card or card issuer, after experiencing fraud; and post-fraud, they often change providers or their cards go to back of wallet. This has immediate and long-term implications on customer loyalty, revenue and fee income."
 
The survey stated that 34% of Indian consumers said that they are 'somewhat unhappy 'with the treatment from the financial institution while experiencing a card fraud, due to which 58% of Indian consumers changed their financial institutions.
 
Consumers in India have the most confidence that their financial institution can protect them against fraud-43% feel absolute confidence in such protection, and an additional 46% feel the financial institution is doing all it can to protect them.
 
ACI Worldwide conducted online quantitative market research via a March 2014 survey of 6,159 consumers; approximately 300 consumers, divided equally between men and women, participated in each of the 20 countries. Of the total, 6,041 own one or more type of payment card (i.e., credit card, debit card, prepaid card).

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Business Standard

Wednesday, 25 June 2014

Can’t Do Much If Banks Give Us Incomplete Data

The Credit Information Bureau of India (Cibil) collects and maintains records of individuals’ payments pertaining to loans and credit cards. These records, submitted by banks and other lenders on a monthly basis, are used to create credit scores of individuals, showing their risk quotient, which, in turn, banks take into account while advancing credit. 
 
The RBI had last month recommended that credit information companies give customers a free copy of their credit score to promote financial discipline. In an interview with Shayan Ghosh, Cibil managing director Arun Thukral says this will not help customers. Excerpts
 
RBI deputy governor KC Chakrabarty recently voiced concerns about the accuracy of Cibil’s data. What are the challenges in this respect?
 
When we launched the bureau in 2004, we started with a database of 4 million borrowers and, today, we have over 300 million customers. It’s not that evolution has not taken place. Earlier, out of 100 enquiries, we could return only 30 reports. However, as our database has grown, on an average, we can deliver 70-75% of the reports across all product categories. Finally, we are also dependent on the respective credit granters and, if they give us data of borrowers that doesn’t have any pan number, date of birth or voters identification number, I cannot alter them as the ownership of the data lies with the banks.
 
There was a time when acceptability of public sector bank data was 30% and, today, it is 70%. So, it’s a gradual process, we can do our job, but, if we don't get the correct data, we can at the most analyse and send back the data. It has to be a two-way process; it cannot be done in isolation. In this regard, we are working with the Indian Banks' Association (IBA) and the banks individually too.
 
How does secured and unsecured loan fare when it comes to credit score?
 
Secured lending like housing loans already contain a collateral and, thus, banks are safer. In case of a credit card, if the customer does not pay, the bank cannot do much; there is nothing as back-up. However, using a credit card does not bring down your credit score.
 
If a customer is using only an unsecured product like a credit card, the risk profile will be very different from another customer who also has a housing loan. But if a customer is paying the credit card bills on time, the credit score is not going to be affected. However, a first product that any youngster who comes into the credit market is a credit card while secured loans come much later in life.
 
The RBI has recommended providing free credit score to all customers. What is Cibil doing on this front?
 
As of today, we are the only credit bureau delivering credit reports to customers. So, let the market mature and, over a period of time, we will look into it. Anyway, I do not think giving one report free will help the customers. Normally, people look into a credit report or a credit score when they are trying to apply for a loan. Otherwise, they don't even bother about it. However, I feel it should rather be an ongoing process and there should be a subscription model as is prevalent globally through which you can monitor your credit score on a regular basis. With more than 1 billion population and the government unable to educate even an iota of Indians, how do it expect us to give free credit report?
 
Since your data comes primarily from banks, do you plan to include microfinance institutions too?
 
Almost five years back, we were almost getting into it collecting data from MFIs, when the Andhra Pradesh microfinance crisis happened and since 80% of the MFI business came from Andhra, we did not know what would happen to our investments. However, today as the microfinance sector matures, this is definitely something we are looking at and, in the very near future, we would be taking their data too.
 
Cibil has completed 10 years of existence; how do you see competition from newer players?
 
I think that, as of today, there is not much of completion in this market as other players are there for just 3-4 years and the market is not as mature as it is in the developed nations where credit information has been present for close to 100 years.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: Financial Express

India Third Most Online Banking Malware Affected Country: Trend Micro

COIMBATORE: India is the third most affected country by online banking malware, according to a Trend Micro Q1, 2014 threat roundup. India slowly rose to the top 3 due to a spike in the number of online bankers in the country, which could be attributed to a vastly improved banking industry. 
 
"The number of online bankers in the India has improved the overall industry but has resulted in significant rise in malicious activities," said Dhanya Thakkar, managing director, Trend Micro (India & SEA). "The mobile banking transaction volume grew along with the number of online money transfers-a-top-ranking secondary means of making inward remittances in India in Q1, 2014," he said. 
 
Online banking malware creators updated their portfolios yet again with the addition of new routines to their usual weapons of choice, Trend Micro, a leading player in internet content security software, has said. 
 
"Case in point: We found a ZeuS/ZBOT variant that had a 64-bit version, used Tor to hide C&C communications, and evaded anti-malware detection," it stated. "We also saw a ZeuS/ZBOT spam attachment run only on a specific date but crashed on any other." 
 
Though they sported new routines, online banking malware retained their core. They continued to be widespread in the same countries -- the US (23%), Japan (10%), and India (9%) -- and grow in number amid the steady rise of the number of internet users and online transactions. In fact, the online banking malware volume showed a 3% increase to 116,000 this quarter from 113,000 in the first quarter of 2013. 
 
Since law enforcement activities against online theft are slowly being ramped up, cyber criminals are starting to add more layers to ensure anonymity in order to protect their identities and avoid getting arrested. 
 
"Using Tor as a C&C channel allowed them a little more anonymity and gave them some degree of additional resilience against security software detection and takedown," Trend Micro said.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Times of India

Monday, 23 June 2014

Some Relief: No Late Fees On Credit Card Dues For A Month

MUMBAI: In a move that will bring relief to credit card holders, RBI has told banks that they can charge late fees only in the next billing cycle following a missed payment. At present, card issuing banks charge a late fee for any payment made after the due date. 
 
The late fee imposed by card issuers ranges between Rs 100 and Rs 700, depending on the outstanding amount. For amounts above Rs 20,000, most banks charge a late fee of between Rs 600 and Rs 700. Most utility providers like electricity and telecom companies charge customers if they miss the due date. However, in the case of credit card payment the issuers charge interest for the delayed payment and in addition to this they charge a late fee payment.
 
This had led to a lot of heartburn among customers as they ended up paying both late fee and the interest even if they made the payment before the next bill was due. 
 
Speaking to TOI, Pallav Mohapatra, CEO of SBI Cards, confirmed that RBI has asked banks not to impose late payment charges if the cardholder had paid before the next billing but after the due date. "It is possible that the regulator must have felt that since the cardholder is not being considered a delinquent until the next bill is unpaid, the penalty should not be charged," he added when asked about the rationale
 
In December 2013, RBI had directed banks' credit card accounts to be treated as delinquent (a non-performing asset) only if the minimum amount due, as mentioned in the statement, is not paid fully within 90 days from the next statement date. The gap between two statements should not be more than a month. 
 
Before that, some banks took the due date specified in the statement for payment of minimum amount due to determine the overdue status while others used the subsequent billing date to determine the over-due status.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: Times of India

Cyber Thieves Blamed For Bitcoin Heist: Researchers

A gang of cyber criminals using an army of infected computers made off with at least USD 220,000 worth of Bitcoins and other virtual currencies, security researchers have said.
 
The researchers from the security firm Trustwave yesterday said the heist was accomplished by a botnet of computers using malware that has been dubbed "Pony".
 
The Pony botnet has infected an estimated 700,000 people or computers, allowing the criminals to control those accounts.
 
The scheme "collected approximately USD 220,000 worth, at time of writing, of virtual currencies such as Bitcoin, LiteCoin, FeatherCoin and 27 others," said a blog post from researchers Daniel Chechik and Anat Davidi.
 
"According to our data, the cyber gang that was operating this Pony botnet was active between September 2013 and mid-January 2014."
The botnet stole 600,000 website login credentials, 100,000 email account credentials and other secure account information.
 
The news comes amid growing use of virtual currencies such as Bitcoins, which have been developed by cryptographic experts as a way to move money at a lower costs than traditional finance systems.
 
While many uses of Bitcoins are legitimate, the virtual currencies have also been tied to money laundering and drug trafficking as well as underground websites such as Silk Road, the target of a US raid.
 
Earlier this month, the operators of what was purported to be a revived Silk Road website claimed the site was the victim of an attack which wiped out USD 2.7 million stored by the bazaar.
 
"Bitcoins are stored in virtual wallets, which are essentially pairs of private and public keys," the Trustwave researchers said, adding that whoever has those keys can take the currency.
 
"Stealing Bitcoins and exchanging them for another currency, even a regulated one such as US dollars, is much easier than stealing money from a bank."
 
They said that cyber thieves with Bitcoins can use any number of trading websites, to get real cash while maintaining anonymity.
 
Trustwave said the same malware was used last year to steal login information from more than 650,000 accounts including on Facebook, Yahoo and Google.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks

Courtesy: Financial Express

Rebuilding Your Credit History Is A Slow Process

An old colleague called me recently.
 
I knew he had lost his job last year and had gone through a divorce, which had also put a lot of pressure on his finances.
 
Although as a finance professional he understood the value of a good credit standing, circumstances had forced him to start defaulting on his car loan and credit cards after his savings were wiped out to pre-pay the home loan (his ex-wife got the flat) and meet day-to-day expenses.
 
He had just gotten a new job and wanted to make a fresh start. But his defaults were beginning to affect his life. He was aware that he had to repair his credit standing, but was not aware of how to go about it.
 
That rang a bell. I have been asked similar questions by a lot of people who either through circumstances (like my friend) or because of a lack of financial discipline, had defaulted on their financial obligations, and were now looking make amends, but did not know how.
 
First, a crash course on what happens when you default on your financial obligations.
 
Today, every lender is required to share data about the repayment history of their borrowers with at least one credit information company (generically known as Cibil since the company — Credit Information Bureau (India) Ltd — is the largest and the oldest of the four licensed credit information companies).
 
It is a misconception that lenders share repayment data only about customers who default on loans. They are required to share data about the repayment of all their borrowers. So anybody who has taken in a loan (which includes me) and is currently servicing it will find “his or her name in Cibil”.
 
But for most of us, this is extremely useful — if I were in the market for a new loan now, the banks will be happy to lend me at a good rate simply because they will discover that my existing loan repayments have been bang on time and the level of indebtedness is reasonable. The issue, of course, arises if my credit information report shows defaults (current or past).
 
This credit report has special significance as it determines the credit worthiness of any individual. The need for credit is an important aspect of modern day life. So if you have defaulted on your payments for any reason, your credit information report will immediately disclose this status to any prospective lender. With a bad credit report, it is unlikely that you can get any loan or credit card from any bank.
 
But all is not lost. You can re-build your credit history.
 
Now that you have been reported a defaulter, and you are burdened with debt, then what should you do? Help comes in the form of specialised credit counselling agencies who can assist you in such a situation. The well-known ones are the ICICI initiated venture Disha Trust (www.dishafc.org) and Bank of India initiated Abhay Credit Counselling (www. abhaycreditcounselling.com).
 
These agencies assist you in negotiating with your existing lenders and re-structuring your debt, which can be both curative and preventive. The service is free and they accept all cases, irrespective of which bank issued you the loan.
 
So all is not lost. If you are considering obtaining a loan in future with low interest rates, you must have a healthy credit score. “Worrying too much about your bad credit history is not going to help, but doing the right things will certainly help,” says Lugani.
 
To start re-building your credit history, begin by paying off the re-structured debts. But remember, it is a slow process. It is a misperception that if you could somehow find the money and pay off all the debt, it will immediately give you a clean slate.
 
What the report will show is that you had defaulted in the past but that you cleared everything off at a particular point of time. That, coupled with some other steps, should help you in slowly rebuilding your credit history.
 
“Customers should not be obsessed about the Cibil credit report. They should first think about the loan, which they have to repay and the need of the hour is how to come out of it; Cibil report is secondary. Once you regularly start paying your debts in time, then with the passage of time, your credit history will improve,” says Nutan Lugani, counsellor of Disha Trust.
 
Cibil keeps your records for 7 years but displays the month-by-month repayment record only for the last 36 months. What this means is if you start maintaining a clean history after re-structuring or paying off your loans, then your credit history will start looking good after 3 years. Cibil also computes a credit score for each individual, which probably is based on the entire 7 years data. However, currently, only a few banks use the Credit score, so it is your visible data for 3 years that has more relevance.
 
Meantime, you can also start adopting measures which enable you to rebuild credit history like taking secured credit cards, which are given against the security of your fixed deposits. These cards may not be your dream cards, but they are often the best option you have since you are unlikely to be eligible for their regular credit cards. Your credit limit may even be raised in future if you have shown good financial behaviour.
 
You can also opt for secured personal loans where an asset is required as collateral. It normally involves bigger sums of money and secured personal loans are preferred by lenders due to the fact that they are secured against your assets such as jewellery, securities such as shares/ mutual fund units, bonds, NSC, KVP, life insurance policies with high surrender value, etc.
 
All these loans (with the sole exception of loan against property, which is unlikely to be available for somebody who has defaulted in the past) are available irrespective of your credit record. 
Lugani offers a word of caution here: Check your expenses and do not increase your credit exposure to immediately repay the present loan to salvage the situation.
 
Service your loans religiously and the disciplined you will also reflect in your repayment history in Cibil records. In fact, after 3 years, the remnants of your bad history may no longer be visible.
 
Next week, we’ll look at how to get mistakes in your credit report corrected.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: DNA

Thursday, 19 June 2014

Children Prey To Cyber-crime; Majority Of Parents Don’t Feel So

52 per cent of the children surveyed in India said they were victims of cyber-crime
 
With easy access to Internet and smart gadgets, a growing number of children in the country today are falling prey to cyber-bullying, security software firm Symantec said on Sunday.
 
However, more disturbing is the fact that a majority of the parents don’t feel their child is being bullied online.
 
According to a report by Norton (a Symantec brand), 52 per cent of the children surveyed in India said they were victims of cyber-crime and/or had online negative situation and about 18 per cent said they had been bullied online.
 
However, 84 per cent of the parents surveyed in India said they did not feel that their child was being bullied online, The Norton Report: Family Edition said.
 
Cyber-bullying refers to people using electronic communication like emailing, social networking and texting to harm others.
Interestingly, 34 per cent of children surveyed in India admitted to creating negative online experience for others.
 
Negative online experience refers to experience someone posting private/intimate content without permission, being approached online in an unwanted sexual way, online stalking or harassment, receiving SMS text messages from unknown people asking to click on an embedded link or receiving adult content.
 
“Going online is a daily affair for many of us, not just adults but children too as they tackle schoolwork and indulge in playtime on the Internet. With social media and the online world continuing to infiltrate our lives and that of children, cyber-bullying remains a very real online danger due to the damaging effect on people’s mental health,” Ritesh Chopra, Country Manager (India) for Norton by Symantec told.
 
Also, with more and more people using their mobile devices, there is more direct impact.
 
“Unlike offline forms of communication, these chats and messages are being digitally stored and can be forwarded to someone other than the original recipient, edited to distort the communication, and be published to different places,” he said.
 
Once the communication is “out there,” the person has lost control of it, Chopra added.
 
About 54 per cent of the girls surveyed said they were victims of cyber-crime or a negative online situation.
Also, 58 per cent girls said they were bullied online during school year compared to 28 per cent boys who said they were bullied in school year.
 
The study, commissioned annually by Symantec, surveyed 13,022 adults (aged 18 to 64) from 24 countries in 2014.This includes Australia, Brazil, Canada, China, India, Italy,Japan, the UAE, the UK and the US.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Indian Express

How Important Are Your Credit Scores?

Still wondering why that home loan you applied got rejected recently? Then you must be of that ignorant lot who still has no clue about credit scores in India or more commonly known as CIBIL scores. Does that ring a bell in your ears? Well, yes credit scores are no more a concept of the UK or the US. It is a concept which has spread its wings in India since 2000 with the inception of the Credit Bureau of India Limited (CIBIL). 
In the 21st century, your credit scores can make or break your financial standing among the loan and credit scenario. Hence, sooner you gain knowledge on this aspect the better for your financial future.
 
Our lives are more and more getting dependant on home loans, car loans, personal loans or even credit cards. You tend to get lured with the various credit choices offered by the different financial institutions, but you are left clueless when you apply and get rejected outright!  We are left wondering, why the heck was it offered at the first place when you had to be declined? It is indeed an embarrassing experience for many as we do not understand the concept behind. The lenders have become stringent about the credit rules in the current scenario and let’s see why.
 
What is CIBIL?
 
Did you miss your credit card payment last month? Well to your surprise, that got reported to big daddy that is the Credit Bureau of India Limited. And to add to your woes, it will only reduce your credit scores which constitute 35% of your report!
 
This collated information (CIR- Credit Information Report), is further supplied to the lenders which helps them to analyze the loan or credit eligibility of the borrower. The amount sanctioned or whether he/she is eligible at all is based on their credit history.
 
Credit Score Vs Credit Report
 
What confuses many of is the distinction between credit score and credit report.
 
A credit score is a range of three digit numbers anywhere between 300 and 900. The higher the rating more is your chances of getting approved for loan or credit. Credit scores are the initial parameter that a lender focuses on and the most preferred figure is a score above 700.
 
Therefore, a bad performance in any of the above categories can affect your credit score thereby affecting your loan eligibility. And, it’s not only about a loan or a credit card; your credit history also affects your insurance premiums or even your new job. The scores are now being evaluated by the insurance providers and even the employers in certain organizations.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: Indian Republic

Tuesday, 17 June 2014

Credit Cards: Virtually Foolproof

Online shopping is all the rage these days as it gives you access to top brands and innumerable products from both India and abroad. You can now buy virtually anything from electronics, clothing and grocery to fruit and vegetables on the internet. However, you must remember that not all shopping portals are safe and when you enter your credit card details, including the CVV number, you expose your entire credit limit to frauds. Be wary of online transactions where there are chances of your credit card details being exposed.
 
Though there are safety measures that can be adopted to ensure transaction security, sometimes payments have to be made on sites that are non-secure. To address such dilemmas, banks have launched virtual credit cards, which are a one-time transaction, limited-period cards.
 
What they are
 
Virtual credit cards are, as the name suggests, online cards that are not issued physically. It is a free service offered by banks to customers who wish to make an online payment using their credit card. The major products offered under this facility in India are SBI-Virtual Card, ICICI VCC, Axis Bank e-wallet card, HDFC NetSafe and Kotak netc@rd.
 
Although each bank has named the product differently, the principle remains the same. You can use this facility by accessing netbanking and providing your card details. Thereafter, the bank will provide you a virtual credit card with a 16-digit card number, expiry date and CVV number. You can top up the virtual card with whatever amount you need to make a payment for and the requisite amount is credited by the bank from your account.
 
Safeguards
 
There are certain important features that make virtual credit cards safe and useful if used correctly. A customer is allowed a minimum credit limit of R100 and a maximum credit limit of R50,000 per transaction per day. The virtual credit card is valid for 24-48 hours, though ICICI bank allows a longer expiry date. You can make only one payment with the virtual card wherein you can exhaust the credited balance or a part of it. If there is any balance left, it is credited back to your account.
This facility is available to the primary cardholder only and not to the secondary cardholder.
 
In transactions where you may have to show the credit card the payment was made with, virtual credit cards cannot be used. For instance, if you book an e-ticket, the credit card has to be shown at the airport — the virtual credit card will not be valid in this case. Since a virtual credit card does not have a physical existence, it cannot be cloned, making it highly secure for all transaction purposes.
 
Only online?
 
For all practical purposes, virtual credit cards can only be used online and are the perfect solution for online shopping. There may be instances where transactions can be carried out over the phone; in such cases, a virtual credit card is useful only if the sales executive undertaking the transaction is using the online payment channel on behalf of the customer.
 
Don’t own a credit card?
 
A virtual card can be generated with your debit card as well. In this case, the amount topped up into the virtual card is debited from your savings bank account. Another good option is the e-wallet, which is generated and set up against your savings bank account. These options come with the same provisions and limitations as that of a virtual credit card. The only difference is that in this case the balance amount on the card is transferred back to your savings bank account and deducted immediately from your bank account. It is not billed against your card.
 
Apart from the banks mentioned above, the virtual card facility is offered by many private websites too. Since for topping up a virtual credit card, you have to provide your credit card details, it is important to ensure that the private site is secured too. The biggest benefit of a virtual credit card is that it is completely controlled by you in terms of validity, credit limit and usage. Therefore, you need not worry about losing it or its misuse.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Financial Express

Monday, 16 June 2014

Use Credit Only When Benefits Outweigh Costs

While most of us cannot be lenders, we are bound to be borrowers because of the system we live with.
 
Polonius, a character in Shakespeare’s play Hamlet, advises his son, “Neither a lender nor a borrower be.” With due respect to Polonius and his genius, credit has become a part and parcel of our life. While most of us cannot be lenders, we are bound to be borrowers because of the system we live with.
 
Consumer credit is a scheme to receive goods and services today in lieu of the payments made in future. When you use electricity, water or post-paid telephone services, you are using credit, as the payment for these services will be paid later. These credits are not harmful, but we have to be careful about the most used consumer credit options, i.e. credit cards, buying consumer goods on credit and easy financing, etc.
 
Uses and misuses of credit
Credit can be a great help in times of need but it can also destroy your finances if used carelessly. Using credit has two facets; it gives you immediate benefits in terms of increased productivity, conveniences, or just simple satisfaction to vanity; it also exerts financial and psychological costs. Use the credit only when the advantages outweigh the costs.
 
The uses of credit are humongous ranging from medical emergencies, education needs, and travel emergencies. Credit cards are usually very handy in most of these situations. There are times when shopping stores such as Pantaloon and Big Bazaar issue credit cards jointly with a bank and provide 5%-10% cash back or discount. If you are a regular visitor to these stores, you should make use of this option. The only problem with this is that you end up shopping for things you do not need.
 
In today’s world, a credit card comes handy to make reservation in airlines, trains or hotels. While credit helps in many cases where it increases productivity, helps in medical emergency or builds future growth as in higher education, its misuse can ruin the finances, make you bankrupt and dilute your creditworthiness.
 
Just because the credit card has a bigger limit, people tend to overspend. This is best avoided along with taking up 0% loans on consumer goods.
 
In addition to these habits, people have a tendency to pay just the minimum amount required. The liability becomes huge after some time.
 
Managing your credit capacity
It is important to build a good credit capacity (or rating) by judiciously using the credit options available to us. You need to consciously build a good credit score that will enable you to get higher credit in case of an emergency. Instead of driving yourselves into a situation that would require external help like that of a credit counselling agency, try to nip the evil in the bud and figure ways to manage your finances effectively. Using credit does allow you to spend more on goods and services now. But it also reduces the money you have for future needs as a part of your future income will be used to pay for the services or goods you are buying now.
 
Taking inspiration from what Benjamin Graham said, credit has become a reality of life as certain as death and taxes. To manage credit better, we have to follow a few rules. 
Here are a few beginners’ tips that can prove useful:
 
 Pay the credit card bills on time. No exception.
 
 Mind your credit scores. If you feel your card details have been compromised, take it up immediately with the bank, which has issued you the card.
 
 Pay your EMI regularly. Any default will damage your credit score and hence creditworthiness.
 
 Do not use too many credit cards.
 
 Avoid treating credit cards as easy money. This is the money you have to pay back with high interest if you make it a habit to pay only the minimum amount due every month.
 
 Do not buy unnecessary items just because it is available on zero credit and low EMI. Remember it is money spent!
 
Always try to increase your down payment when you take up a loan so that your monthly liability doesn’t eat into your savings.

Finally, credit doesn’t increase your purchasing power. It just brings future purchasing power to the present and gives you a false impression that it has increased.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

Courtesy: DNA

Efficient Policing Is The Best Way To Check Cyber Crimes

Social media sites are gaining popularity in India at an exponential pace and attracting people from every sphere of life — among them are also those with nefarious designs.
 
Cyberspace, for long, has been misused for various forms of crime — from hacking into government sites to spreading hatred and terror.
 
The vast and immediate reach of social media platforms has made it the preferred vehicle for miscreants to spread lies and communal hatred. While terrorists and anti-social elements have been quick to misuse the Internet to their advantage, the government has woken up very late to the danger.
 
The unrest that erupted in Pune over the last fortnight, after derogatory pictures of Chhatrapati Shivaji and Bal Thackeray were uploaded on a social media website, saw a Muslim techie brutally killed. Tension again rose when distorted pictures of BR Ambedkar were uploaded on the Internet.
 
This is not the first time a social media platform has been used to fan disharmony. In both these cases the police have been able to block the offensive posts but not before the damage was done.
 
Many cyber cells, like the Social Media Lab of the Mumbai Police, are doing a commendable job of detecting derogatory posts and blocking them before they lead to unrest. But often it is a case of shutting the stable door after the horse has bolted.
 
Moreover, rather than going after people who ‘like’ a post — like the Nanded Police — the focus should be on tracing its source and taking necessary action. This is difficult given that Internet companies often refuse to part with user information and also such messages are uploaded using proxy servers.
 
This is where the challenge lies and it is here that the police should focus. In its eagerness to stop people from sharing or liking a post the real culprits should not escape.
 
The police cyber cells around the country need to pull up their socks.
To tackle these crimes the police should first understand social media and its contours.
 
It’s a thin line that separates freedom of speech and State-imposed censorship. The easiest — and definitely not the most effective — way to tackle such crimes is to block websites and use Section 66(a) of the IT Act (punishment for sending offensive messages through communication service, etc) against innocent Internet users.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Hindu Businessline