How David Pomeranz got out of credit card debt

MANILA – About 7 million credit card holders are still allergic to credit cards, according to Alex Ilagan, executive director of the Credit Card Association of the Philippines.

Ilagan said apart from prudence, experiences with bad debt have caused Filipinos to shy away from credit cards, thus slowing the industry’s growth at 5 percent per year.

American singer and songwriter David Pomeranz, who is frequently in the Philippines to hold concerts, said he had his share of bad credit card debt at one point in his life.

He said it took him months to pay his credit card debt while on tour.

How was he able to turn his spending habits around?

“Always make more money than you spend, that’s kind of it. Isn’t that silly? But it actually works like crazy,” Pomeranz told ANC’s “On The Money.”

“If I make more money than I spend, I do very well, and when I make more money than I spend, I can invest in my own career, my family, and expanding my business,” he added.

Pomeranz said keeping track of finances may require an accountant is who ethical, organized, knowledgeable of laws and regulations, and trustworthy.

He noted that the most important thing is knowing your bottomline, and being conscious of how goals will contribute to more success.

“I always recommend that the money is in sight, that it’s been earned. When I’m spending the money that I do have, it should contribute to the betterment of the organization, that it will further my goals, and further my dreams,” he said.

source: www.abs-cbnnews.com

What to do if your credit card bill has errors

MANILA, Philippines -- The first thing you should do when you get your credit card statement is to carefully check it against your records.

But what do you do when you find a "charge" that you didn't make?

ANC On The Money's resident financial adviser Salve Duplito said to contest your credit card billing, just call your bank's hotline and make a complaint.

The bank will investigate your complaint by looking at the signature used in the transaction. If the investigation showed there was indeed a fraudulent transaction or a system error, the bank will reverse the charges.

Alex Ilagan, executive director of the Credit Card Association of the Philippines, said most banks would temporarily reverse the charges as soon as you complain. This would mean you will not incur any interest and penalties while the investigation ins on-going.

Banks' investigations usually take some time. One possibility is another bank processed the transaction, which means your bank would need to coordinate with the other bank.

Duplito said the process can also become more complicated if the charges were incurred overseas.

She also reminded cardholders not to delay their complaints, or else the window where they can contest the charges will close.

"You must call the bank within 2 weeks after the statement date. Most cardholders get their billing statement a week after the statement date, so you only have effectively around a week to make sure your statement is accurate," she said.

Duplito said she did an informal survey and found most people don't check their credit card billing statements.

"What's alarming about this is the anecdotal increase in credit card fraud recently. If you were victimized by fraudsters and you didn't check your billing, you just keep on paying for their shopping sprees and not know it," she said.

Ilagan said it is every cardholder's responsibility to double check their bills and correct tghem if there are any errors.

He said the most common problem of cardholders is failing to recognize the company name on credit card bills. Some merchants use a different company name in billing statements, which add to the confusion.

Duplito suggested cardholders create a "budget tracking system" to keep track of their expenses, including credit card transactions. This will make it easy to double-check the accuracy of your billing statement at the end of the month.

However, it's a different case if you lose your credit card and charges were made before you discovered this and reported it to the credit card company.

"Card companies must simply waive charges for all errors and fraudulent transactions even before a card is reported as stolen. After all, they reversecharges from a card victimized via skimming. That's almost teh same as somebody stealing your card from you physically," Duplito said.

Most of these problems are likely to lessen when credit card companies shift to a chip-based or EMV cards, but this will happend in 2017.

She noted hybrid-EMV cards are still be vulnerable to fraud, so the only way to go is purely EMV cards.

"Closely watch which banks and merchants truly walk the talk of valuing their customers. Those are the companies that will put their money where their mouths are and be the first to shift to a purely chip-based card," she said.

source: www.abs-cbnnews.com

How to repair your bad credit record

MANILA, Philippines – A certification of full payment from all creditors is necessary to repair a bad credit record.

Credit Card Association of the Philippines executive director Alex Ilagan said this is the only way to fix your credit record today in the absence of a central credit database.

Ilagan said that because most credit card holders are still careless about due dates and payment history, more education is needed to remind them to take care of credit history and profile because it’s going to affect borrowing plans in the future.

“Most people would really not understand that if they default on something today, that could affect their ability to borrow money in the future, that’s not very clear right now. That’s why there has to be a lot of education that has to be done,” he said on ANC’s “On The Money.”



Financial adviser Salve Duplito, meanwhile, said that because there is no central database to monitor credit, consumers themselves should take the initiative to gather their own records.

“Going back to each company, requesting for certification, calling everyday to follow up is not something that any consumer would jump up to do. But anybody who defaulted in credit payment in the past should have this on his to-do list today,” said Duplito.

She said the absence of a unified database also makes lending very risky and limits the market of lenders.



Ilagan said that once a unified database is set up, it may bring down interest.

“The cost of credit is actually reflective of the amount of risk that banks will have to take on. The risk is there because there is a lot of unknown about the borrower, hopefully that’s what will be eliminated,” he said.

Jaime Garchitorena, president and chief executive of the Credit Information Corporation, said this will also help borrowers looking to tap other banks in ASEAN countries.

He added that a credit database will also be helpful because it can also indicate positive data, which will help improve a borrower’s credit profile.

“In the universe of data, the more data the better, and when we talk about bringing down the cost of borrowing or assessing an individual for risk then that’s where we start bringing in utility payments or any other type of positive and or negative data that may exist out there,” he said.

 source: www.abs-cbnnews.com

Why credit cards shouldn't be 'double-swiped'

MANILA, Philippines - "Don't double-swipe credit cards" -- this is the message of the Credit Card Association of the Philippines to commercial establishments and retailers.

CCAP spokesperson Alan German said the practice of "double-swiping" is being discouraged since this may compromise the data security of credit cardholders.

Double-swiping is the act of merchants completing a second swipe of the card at the Point-of-Sale (POS) system, even after the transaction has been approved.

The CCAP said any credit, debit or prepaid card should only be swiped using a POS terminal issued by the bank, not the establishment's own POS system.

German said criminal groups are now targeting establishments' own POS systems, stealing payment card data and PINs of customers.

"In many cases, the second swipe results in the credit card’s full data to be retained by the merchant in its own system. Effectively, this unnecessary practice increases the merchant's vulnerability to potential data compromise... This loose data, so to speak, can then be used to create counterfeit cards, engage in identity theft, and perpetrate fraud,” he said.

The CCAP spokesperson urged merchants to use other record-keeping methods for their retail operations, instead of double-swiping the cards.

"More often than not, the second swipe is unrelated to authorization or transaction settlements. Instead, it is used to create a secondary record to support the merchant's accounting, reporting or customer-relationship management programs," German said.

"Instead of using customers’ payment cards, merchants can explore alternatives such as loyalty account numbers, transaction IDs, or truncated primary account numbers to track customer activity, if necessary."

German said card issuers and merchants should understand the risks in double-swiping the card, and should undertake measures to protect their businesses.

He said CCAP is committed to increasing data security awareness to ensure that all stakeholders are aware of potential vulnerabilities and associated risks.

source: www.abs-cbnnews.com