It is becoming popular for people to declare that they have bad credit much in the same way people mention that they have a terrible disease or another medical condition. I hear people saying things like, “I would like to a house, but I have bad credit.”  The tone in which they say it is kind of like someone saying “I would love to join you on the ski trip, but I have bad knees.” I have sympathy for the medically challenged, but my heart goes out a lot less so to who cite “bad credit” as if it is some affliction they have no control over.

How Do You Get Bad Credit

There are lots of super complicated formulas that go into your credit score, but one thing has always remained true; People who pay their bills on time have good credit. It is really hard to ruin your credit by paying all of your bills on time. When you take out a loan, you are making an obligation to pay it back. Failing to do so marks you as someone who fails to meet his or her obligations. While I do not believe that credit scores should be used for other purposes they were not intended for, that still doesn’t mean your credit score may not say something about you and your inclination to meeting your commitments.

Some Exceptions

Credit Scores are important, but they are not sacred. I have said before that I would certainly max out my credit and declare bankruptcy, as a last resort, in order to finance lifesaving a medical procedure for myself or a loved one. There are other unusual situations that can involve illness, disaster, or a death in the family where your credit score can suffer though little fault of your own.

Who Has Bad Credit

The people I am talking about who casually volunteer that they have bad credit are not victims of these circumstances, merely people who got in over their heads ing things they couldn’t afford to pay for. They are the people who new cars while they are carrying a balance on their credit cards. They are the people who invite you to expensive concerts or sporting events who don’t like to hear no for an answer when you tell them that you can’t afford it. They are people who do not take the time to figure out who is billing them for what and just decide to ignore some bills. They are the people who go on vacation or even move, without notifying all of their credit cards.

What Can They Do About It

There is so much written about how to get out of debt and improve your credit score, that it might be second only to sex as a search term on the Internet. Again, it all comes down to paying your bills on time, the rest is commentary. Some learn to control their credit card spending, while others may have to go to the extreme of cutting up their credit cards and using cash or debit cards.

In Conclusion

Unless you have been the victim of a tragedy, spare me your sob stories about “having bad credit”.  Your bad credit is a symptom of your bad habits and possibly a spending addiction. Like any bad habit or addiction, you need to take action to fix your problems and fix your credit. Acting as if it is a condition that is out of your control insults us both.

This has been a big week for mobile payment announcements. First, a company called ClearXChange announced that they would be rolling out an electronic payment system in conjunction with Bank of America, Chase, and Wells Fargo. Their press release was long on buzzwords and short on actual payment details. This is not a technology blog, and frankly, I really don’t care what kind of radio communications are used between your phone and the terminal at your merchant. When I read these press releases, all I want to know is how am I going to be charged. There are no specifics here, but they seem to be implying that this system works kind of like a debit card. The banks are running the show, and there is no mention of any credit card network such as Visa, MasterCard, or American Express. If this is the case, you will not have any of the protections that a credit card offers, but at least you will be dealing with your bank.

It Could Be Worse

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– Update – Discover is no longer offering the the card that is mentioned in this post.

Ah Discover, a credit card that the late, great Rodney Dangerfield would have loved as it is the payment network that gets no  respect. Devotees of Discover love the card, while others like myself have never really seen any compelling reason to give it a try. I just recently read up on the Discover VentureRewards Escape card. It is a very similar card to another highly advertised product from Capital One. Like the Venture Rewards card, it offers “double miles” that are really just a stand in for two cents per dollar spent as a cash back reward. With the Capital One product, you must log in and select specific  travel purchases to be reimbursed for.  At least Discover Escape drops that charade by offering cash back in addition to the travel credits.

What Else Is New?

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Whenever I notice an article about credit cards in my local media, I take note. Today, the buzzword was “electronic pickpocketing” on the home page of one of my local television stations here in Denver. When I went back to find the article just a few hours later, it had already been usurped by severe weather and celebrity gossip. A quick search uncovered the identical article at the Sacramento station’s web site. The gist of the article is that about 20% of our credit cards currently contain a chip that will allow someone with the right equipment to read it without physical contact. That equipment could be a credit card reader at your big box store, or an $8 device owned by a hacker. Think of it as a wireless skimmer.

Not The Same As Chip and Pin

For some time now, Americans have felt left behind as our European friends and others around the world had already developed a system of wireless payments. These Chip And Pin systems were much like the current system in place, with one key difference. As the name implies, you not only need to read the chip in the card, but the user must also enter his or her Personal identification Number (PIN). It seems as if our current system only requires proximity in order to read the information one’s credit card.

The Real Problem With Wireless Credit Card Technology

As someone who constantly reads and writes about credit cards, I have found almost no information about the current system embedded in several of my cards. Retailers know even less about this system. I know that Visa, MasterCard, and American Express have extensive websites and massive advertising budgets, yet they have spend zero effort letting anyone know about these systems. Actually, I am shocked that hackers have finally gotten around to learning about this vulnerability, even as they are specialists in finding hidden features to exploit.

Once Again, You Never Have To Be The Victim Of Credit Card Fraud

Hackers can skim my card, read it wirelessly, or even photograph it from space for all I care. As I have said many times before, all the media is doing is scaremongering. Cardholders are never liable for fraudulent charges. We are never the victim of theft, only our banks are. The knowledge that any theft of my card or its numbers will never affect me is one of the key features of this system that make it a superior method of payment. Cash can be stolen, forged checks must be canceled on time, and don’t even get me started on wire fraud and schemes involving cashier’s checks. The only obligation you have to protect yourself from fraud is to notice a fraudulent charge and inform your bank. You even have 90 days from when you notice the charge to file the complaint.

My Favorite Part

The article mentions aluminum wallets as a possible defense against he so-called menace of “Electronic Pickpocketing”.  I would say that the last thing I would ever do is carry such a thing except the alternative sounds even worse. Supposedly, you can wrap your wallet in aluminum foil. I can just imagine having to explain to people every time I pull out my tin foil wrapped wallet that I am not a paranoid, mentally disturbed individual who fears a government campaign to implant microchips in my brain.

When writing about credit card merchant fees, I have frequently used the example of my favorite bagel store here in Denver. They have a very simple approach to business. In fact, they are just called “The Bagel Store”.  For years, they simply did not accept credit cards. If you wanted to indulge in their baked goods, you needed cash or a check. Although I prefer to use my credit card, I thought, “good for them”.  If a small business doesn’t like credit card interchange fees, they always have the choice not to accept credit cards. Generally, purchases are small and it is unlikely that their customers really needed to finance a couple dozen bagels.The owners must have decided that the cost of accepting credit cards was greater than the costs and risks of handling cash. Tellingly, their surveillance cameras were trained on their cash register, not on their exit or their customers.

A New Development

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