This Week In Your Wallet: Chip And Dip Is Always A Crowd-Pleaser
Next Thursday marks a major milestone (and deadline) in the credit card industry. It’s when merchants are expected to have the technology to accept EMV (short for Europay, Mastercard and Visa) chip cards at checkout counters. If they don’t have the terminals in place, the liability for card-present fraud (i.e. when a card or a duplicate card is used to make an unauthorized transaction in a face-to-face setting) shifts to them.
American Express, Visa, Discover and Mastercard came together to set this new standard with the idea that he who has the oldest technology bears the liability. In other words, credit card companies are responsible for bringing the chips and merchants are responsible for providing the dip. (And FYI: In case of fraud, you — the consumer — are still not liable. The same zero-liability laws that protect you with today’s cards will protect you with chip cards.)
If you haven’t received your chip credit or debit card in recent months, then expect to get it soon. More than 600 million cards will hit the wallets of U.S. consumers by the end of the year, according to estimates from the Smart Card Alliance. In fact, 69% of consumers are either using chip cards already (many are equipped with both the new chips and the older magnetic stripes to make the transition easier), according to new research from Mastercard International. Given the record-breaking numbers of data breaches in recent years, this makes sense.
As I reported for Today.com, EMV cards are safer than magnetic stripes (which trivia buffs might be interested to know use the same technology that powered cassette tapes), because the stripe contains all the info a thief needs to make purchases using your card. That info never changes, so a thief can replicate it and use it over and over again. Your new chip, however, generates a new transaction code every time it’s used – so even if a thief gains access to one, it can’t be used a second time. “It’s kind of like stealing an expired password,” says Matt Schultz, analyst for CreditCards.com.
FAFSAs Are Getting Friendlier
While on the topic of dates and deadlines, there’s a new one in parents’ and students’ favor. As CNNMoney reports, starting next year, students can file the free nationwide financial aid application (aka the FAFSA) as soon as Oct. 1, using last year’s tax data. (For those of you who are unfamiliar with the FAFSA, it’s the filling out of this form that determines whether a student is eligible for federal aid and scholarships, and how much the student is eligible for. Eligibility is based on a family’s income and how much the school costs.)
The federal government bumped up the filing date by three months, and here’s why it’s a big deal: the system in place now requires students to wait until January to file and — when doing so — provide income information that’ll be submitted on their tax forms in April. Confusing, right? Not to mention, students often don’t know how much they’re receiving (if anything) until they receive their acceptance letters in the spring, which gives them little time to plan for funding. The new date aims to lessen the stressful guesswork and readjustments — and also give students and families a better idea of their anticipated financial aid. The potential hitch: Even if a student files in October, it’s still up to the school to notify the student of his/her award. That means you could still be waiting for notification until spring, but the White House says hundreds of colleges have already committed to the earlier timeline.
Bar Talk
“A personal finance journalist and a CFA walk into a bar…” It sounds like the start of a bad joke, I know…. I recently met up with Greg McBride, chief financial analyst for Bankrate.com, to talk personal finance over cocktails (at a very, ‘Mad Men’-esque bar, might I add). No, it’s not your traditional backdrop for a video on personal finance, but one of the many points we’re trying to make is that conversations about money don’t have to be reserved for certain places or certain times. Instead, talking about money can (and should) happen anywhere. In this part of the conversation, we chat about the life skill that leads you to wealth. (Psst it’s financial literacy.) And it wouldn’t be a good bar convo without a little relationship talk. So, here, we cover the concept of “yours, mine and ours” accounts, the importance of financial autonomy in a relationship and how it can lead to fewer fights about money. Cheers to that!
Sleigh Bells Are Already Ringing
We’re 93 days out from Santa’s big day, and some 32 million Americans already have their holiday shopping underway, according to a new survey by CreditCards.com. Too soon? Not necessarily. As USA TODAY reports, two of the driving forces behind these early birds are more flexibility with online shopping and early retail promotions. And — as I’m sure we’ve all experienced — procrastination can cost you, so starting sooner rather than later could be in your wallet’s favor. Just take note of the return policies, because the earlier out you buy, the less forgiving stores might be.
Have a great week,
Jean
