Look Out for Credit Cards that Are “Yours” but Aren’t With You

Recently I got an automated email from Citibank letting me know that my credit card “statement is ready to view.” It was not spam and contained the email security zone, which states my name, the last 5 digits of my account, and since when I’ve had the card. The problem? I don’t have a card with those last 5 digits.

I called Citibank to check whether there was a glitch in their automated system, but the customer service representative (CSR) confirmed that there was in fact a card open in my name with those last 5 digits. Luckily, there were no charges to it, but apparently it had been open for a year now. I asked for him to securely close that account, and, since I already had him on the phone, asked to make sure that there were only 2 cards to my Citibank account – the two cards I actually own. He found those and two more. There were three cards to my name that I never actually had!

None of the three cards had any charges to them, but because I do not actually have any of them their very existence was enough to scare me. The CSR was able to securely close two of them but had to write out a manual close request for the third, so I will call in a couple of weeks to check up on that.

But this is what I’ve learned from this experience:

  • Read your credit card emails. Just because you get them every month doesn’t mean they are always the same. For some reason the card that triggered the notification had been open for a year but I never received any notification about it other than this one. Nonetheless, I opened and read through it because it came to a different email address than the one I use for my credit cards. Had it been sent to my other email, I might’ve never found out about it at all.
  • People worry about the impact that opening too many credit cards or closing a card might have on their credit score, but there’s something a lot worse: open credit cards that you don’t physically have. I am less worried about the ding on my score that the inquirer(s) may have caused by opening the card or the dent I may have made by closing all three cards at once than about the possibility that someone could’ve actually used the cards. I do not understand how the card application happened, and why someone would have a card on my name and not use it for a whole year, but I think I’m lucky. If any of the cards had been charged, my score and I would be in much bigger trouble.
  • Call your credit card company just to check what they have on file. You should definitely do that when you get a strange notification like I did, but I would recommend also calling every year or so just to make sure. Even though my “statement notification” email came from Citibank, I am calling Discover as well to verify that they really only have one card on file for me. You never know what you’ll find out – I only got the notification for one Citibank card, but once I had the representative on the line and asked him to check, he found 2 more.

I was lucky that nothing had been charged to any of the three cards I had never opened, and I hope that you are even luckier than I am and don’t have any fraudulent activity to your name at all. But with credit cards, better safe than sorry is the rule. Even if you think you’re lucky, it’s better to call and check than find out the hard way.

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Check Again: A Look at Current Checking Account Options

After finishing a harrowing first year of graduate school, I finally have time to pick up Money Under Your Futon again. Kathy and I both had crazy (academic) years, but we are glad to be back here, learning and writing about personal finance tips for people with entry-level jobs (or stipends) who want to live the good life.

Kathy posted her “I am back” post a few weeks ago, in response to some of the craze going on over TLC’s Extreme Couponing show. As for myself, this is my “welcome back” post.

I reviewed some checking accounts a long while back and, given all of the regulatory changes in the banking system over the last year or two, I think it is time for an update. Here is a summary of the most basic checking accounts offered by some of the largest brick-and-mortar banks. While banks warned that the recent and ongoing regulatory changes might translate into the end of free checking accounts, not all of them have actually banished free checking yet. Some, such as Chase, HSBC, and Wells Fargo, have certainly delivered on the warning, putting stringent requirements on customers, who otherwise must pay up a monthly fee for their accounts. Other banks, however, have come out on top. PNC’s Free Checking does not have any monthly fees at all, while Bank of America makes it fairly easy to avoid its maintenance fee.

  • Bank of America’s eBanking account: this account is great for young, internet-savvy customers with uncomplicated finances. There is no monthly fee nor minimum balance as long as you don’t use a teller for any of your transactions. And BofA has one of the best ATMs that I know of, since the machines actually count your cash and scan your checks when you make a deposit, and the amount posts to your account immediately. If the range of your checking needs is usually limited to withdrawals and deposits, this is a great option for you. And when you do need a teller, the monthly fee is $8.95.
  • Chase Total Checking and Chase’s College Checking: the Chase Total Checking account has a monthly fee of $10 which is waived only with (a) a direct deposit for $500 or more, (b) a minimum daily balance of $1,500, or (c) an average daily balance of $5000 or more in all of your Chase deposit and investment accounts. Personally, I think this is a pretty bad deal given other options. Even if you can satisfy the requirements now, consider the worst case scenario – you don’t want to lose your job, have to deplete your account, and then also get hit with a fee. If you’re in college or grad school though, you can avoid that through the College Checking account. With this account, the $6 monthly fee is waived for 5 years while you’re in school, though after graduation you’ll need to set up a monthly direct deposit to continue the fee waiver.
  • Citibank’s Basic Checking account: there’s no minimum balance for this account, but you have to jump some hoops to avoid the $8 monthly fee. The fee is waived for every month you have 5 transactions in the account, including direct deposit, ATM withdrawals, debit card payments, and automatic payments. This may seem like an easy set of hoops to jump, since any 5 transactions in a month count, be it 5 ATM withdrawals, 2 direct deposit and 3 debit card payments, or any other combination of transactions. However, keep in mind that while on a day-to-day basis it may be easy to satisfy this requirement, it might not be the case when you go on vacation. If you travel abroad and don’t use ATMs or your debit card in a given month, you may easily come back to find a fee on your account. But perhaps $8 isn’t all that bad.
  • HSBC’s Choice Checking and Basic Banking: HSBC’s Choice Checking is a less strict version of the Chase Total Checking, also with a slightly lower fee. The $8 monthly fee can be avoided with (a) a monthly direct deposit, (b) at least $1500 in personal deposit or investment balances, or (c) at least $5000 in broader total monthly balances, which includes personal deposits, investments, and certain credit balances. On the other hand, if you don’t want to bother with the requirements or can’t meet them, HSBC also offers a Basic Banking account. With this account, you are always charged a $3 monthly fee, but at least there are (almost) no other surprises. That is, as long as you write less than 8 checks per month. If you go over that, there’s another $0.35 fee per check you write.
  • PNC’s Free Checking: this is a truly free checking account, with no minimum balance or transaction requirements. Although PNC does not have as many ATMs as other big banks, it makes up for that by reimbursing ATM fees when you use a non-PNC ATMs as long as you maintain a balance of at least $2000. As I see it, this is a great deal. If you’re going to meet a minimum daily balance, instead of just doing that to avoid a monthly fee, you might as well get something out of it. Here, PNC rewards you by making every convenient ATM a free one too.
  • U.S. Bank’s Easy Checking and Student Checking: there are two ways to avoid the $6.95 monthly fee on the Easy Checking account: (a) having direct deposits with a combined value of at least $500, or (b) maintaining an average daily balance of $1500 in the account. This is a pretty standard, middle-of-the-road account nowadays, with average requirements and an average fee as well. You could do better – but you could certainly also do worse. If you are a college or grad student, though, you may also want to look into U.S. Bank’s Student Checking account. There is no minimum balance or transaction requirement for this account, and you get reimbursed for up to 4 ATM fees a month when using a non-U.S. Bank ATM.
  • Wells Fargo Value Checking: to avoid the $5 monthly fee on this account, you must either (a) have a direct deposit of at least $250 a month, or (b) maintain an average daily balance of at least $1500. While I think one should avoid any account that requires direct deposit or minimum balances since these are the first to go when your finances go under, this checking account does have the one of the lowest monthly fees out of those reviewed here. So if you find you are going to be inevitably hit with a fee, then this might be a good option for you.

When I reviewed checking account options 2 years ago, I had PNC’S Free Checking in a close second place after a Bank of America account. This time, it’s a tie, and the breaker really depends on convenience. If BofA ATMs are convenient for you and you can’t remember the last time you actually stepped into a bank, you can’t go wrong with the eBanking account. On the other hand, if you have a PNC ATM close by or are planning to maintain a balance over $2000, PNC’s truly Free Checking is a great option – not having to ever worry about ATM fees certainly pushes it ahead.

And if you don’t have BofA or PNC ATMs nearby and cannot maintain a balance of at least $2000, think carefully before just choosing the bank closest to you. If you are just starting out and your job isn’t stable – and most aren’t nowadays – it is best to avoid accounts that have minimum balances or direct deposit requirements. The last thing you need is a bank working against you, using fees to chip away the balance you do have. Check your local banks and credit unions as well. As this review shows, despite all warnings, there are still free or almost free checking accounts out there.

Rewards in Checking: Citibank

This is Money Under Your Futon’s 101st post!  To celebrate this occasion and thank our readers, we are announcing our new e-mail address: moneyunderyourfuton [at] gmail [dot] com.  Please feel free to send us your money-related questions, and we will try to respond to them in future posts.

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It is hard to make money off your checking account.  With a few exceptions, such as ING’s interest-paying Electric Orange account, most checking accounts give you no more cash than what you have already deposited into them.  And some don’t even offer that, as their maintenance fees slowly chisel through your balance.  But sometimes a bank promotion can transform a regular checking account into part of a relatively generous program.

With Citibank, for example, you can earn ThankYou points every month simply for having a checking account with a debit card and direct deposit.  The ThankYou Network allows for point accumulation through several services and merchants, including Citibank and Expedia, though the fastest way to earn points is usually through one of Citibank’s credit cards tied to the program.  But Citibank also gives its checking customers monthly ThankYou points for coupling the account with at least any two other services, such as having a debit card, direct deposit, or online bill payment.  The monthly points range from 25 to 1,200, depending on the type of checking account and the number of services linked to it (click here for a table detailing the points per account type and number of services).

You can earn even more ThankYou points if you use your Citibank debit card for purchases.  Although the credit card offers tends to be more generous, Citibank has jumped into the bank trend of linking debit cards to reward programs in an attempt to attract more customers dropping credit cards in response to the crisis.  For purchases made with a Citibank debit card, you can earn 1 ThankYou point for every $2 spent on signature purchases (i.e., a purchase that requires your signature on the receipt) and 1 point for every $3 on purchases using your PIN.

If you already have a ThankYou Network account, make sure to get points for your checking and debit card use.  Call customer service (1800-THANKYOU) to link your checking account to the network.  And if you have a Citibank checking account but are still not in the ThankYou Network, consider joining it and reaping rewards, especially if you use the other partners in the network, have a high-end account for which you can get a lot of points per month, or use your Citibank debit card frequently.

With the current low interest rates on savings account, you may find that your checking account gives you more bang for your buck.

Thank You in So Many Ways

I recently applied for the new Citi FORWARD Visa Card, because I will resign from my company in a few months and be forced to relinquish my corporate Diner’s Club MasterCard. The Citi FORWARD is a pretty neat credit card and I will go into more details at a later post. For now, however, I would like to talk about the Thank You Network, which I recently discovered and which serves as the rewards program for all Citi-affiliated credit cards, financial products and services.

A unique feature of the Thank You Network is that you can amass all the points you have collected from various places into one consolidated account. Below are some of the ways to earn points:

  1. Use a Citi credit card, such as the Citi FORWARD.
  2. Link your Citibank account to your Thank You account. If you have a Citibank account (either the Access or Basic Checking), an ATM card, and a direct deposit set up, this will earn you 25 points each month. Think about it – you don’t have to make a single purchase and you still earn 25 points each month.
  3. AND if you do use your ATM card, you get a point for every $2 you spend on purchases with your signature (meaning you click “Credit” at the machine and sign your name) and for every $3 you spend with your pin (meaning you click “Debit” and enter your pin number).
  4. Make purchases through retailers at the Thank You Bonus Center and earn bonus points. For example, currently you can earn 3 points for every dollar you spend at iTunes.
  5. Book hotels, cruises, and vacation packages through Expedia. Of course, you should only do so if you were to come across a good deal. You can also earn points on flights if you book a hotel stay at the same time. In this scenario, you would earn frequent flier miles for the flight and Thank You points for both the flight and hotel.

And I am not even done. Once you are ready to redeem your points, the Thank You Network’s reward collection is akin to an Amazon store. You can redeem points for books, DVDs, music, and electronics, etc.  There is even a sale section, where you can get items at a discounted number of points.  In addition, you can also trade your points for a student loan rebate to pay for your student loans. A $25 rebate will set you back 3,300 points. 

Obviously, I am not advocating that everyone switch to/set up a Citibank account or sign up for a Citi card; I was simply struck by how quickly and easy I can earn points through the Network and the many rewards options I have to redeem my points. If you just graduated and are still wondering which checking account to get and/or for which credit card to apply, I think the Thank You Network presents a pretty compelling case to become a Citi customer.