[Noozhawk's note: This column is part of a continuing series.]
Examining your finances takes fortitude. What are your goals and dreams? What can you afford? Here is another question I’ve heard in my financial advisory practice:
Dear Karen: Yikes! My bank informed me that my credit card was breached. I wish I could say it was the Niemen Marcus one, but it was plain old Target. I was really stressed out until I got my next statement. But there was nothing odd about it — no weird names, no unexpected charges. Am I in the clear? What about next time?
Dear Targeted: For the current breach, the most important action item would be to cancel any card you might have used at Target during the time of the breach — Nov. 27-Dec. 15, 2013. Then you can re-establish new account numbers.
It may be less likely that your information will be abused as time goes by, but I’d use this warning to take positive steps in managing your financial security. Reassess which cards you really need, and reduce them to the minimum needed for transacting your life. One caveat: reducing your credit may marginally affect your credit score, but just consider the trade-offs.
I was glad to see your follow-up question about next time, as these breaches are becoming increasingly common. If you still plan to use credit and debit cards (it is hard to get by in today’s society without them!), I recommend these ways to protect yourself against the effects of hacking:
» 1. For your debit cards, set a very low amount that can be removed in cash. I set mine for $50. That way, if someone steals your card, they can’t get away with much. Depending on the company, there is a limit to your liability, but we are looking to reduce the hassle as well as the cost.
» 2. Check your credit card balance frequently — like every other day. You can generally do this by automated phone call, but even easier is checking online.
» 3. Change your passwords frequently. That doesn’t mean you have to change every password every week. Your local library access and accounts that aren’t attached to any financial account are not a big deal. But for any account which is tied to financial institutions, or ones that store your social security number, make it a practice to change every month or so. That way, if a list of passwords is stolen, a break-in attempt on your account will more likely fail.
» 4. Finally, check your credit report a few times per year. By law you can access three in a year without cost. There are three main companies (Experion, Equifax, and Transunion), so you can, for instance apply for the Experion score in January, Equifax in May, and Transunion in September.
If you’re checking your credit reports, you’ll find out if someone has stolen your identity early on, before too much damage is done. My sister-in-law’s identity was stolen years ago, before it became commonplace. It took her hundreds of hours over five years to clear her name.
Your credit report likely wasn’t compromised with this Target break-in, since this account-opening information apparently was not the subject of the Target breach. On that score, you’re lucky — this time. Please continue to check!
— Karen Telleen-Lawton’s column is a mélange of observations spanning sustainability from the environment to finance, economics and justice issues. She is a fee-only financial advisor (www.DecisivePath.com) and a freelance writer (www.CanyonVoices.com). Click here to read previous columns. The opinions expressed are her own.