Are You Ready for the New Credit Card Changes?

Australian Credit Card ChangesThis year is bringing one significant change to the way you currently use your credit cards. Starting 1 August 2014, you will no longer be able to sign for your credit card payments. Instead, you will only be able to use a PIN (Personal Identification Number) when making these types of payments. This change is designed to make the use of your credit card more secure and reduce the risk of credit card theft. However, there are some things you should know about this new rule and how it will affect you.

No More Signatures
This new rule will only effect those purchases made in person, such as at a restaurant or retail store. In addition, it is only for credit cards that are embedded with a smart chip. Card designed without this smart chip will still be able to require signatures when making a purchase. Payments made online or over the telephone will not be effected, although you would not typically sign for these types of payments anyways. It is also important to know that if you are traveling overseas, you may still be required to use a signature depending on the location you are traveling to.

Contact Financial Institution
This 1 August 2014 deadline is fast approaching, so you want to make sure you have a PIN number for each credit or bank card you have. If you have a credit or bank card that does not have an associated PIN number with it, or you have forgotten what your PIN number is, now is the time to contact the credit card company or financial institution. This will ensure that you will still be able to use your credit card, even after the 1 August deadline.

Choosing a Secure PIN Number
When selecting a PIN number to attach to your credit card, it is important that you choose a secure number. Do not use your birthday or any part of your Tax File Number. This information may be in your purse or wallet if it is stolen, giving the thief access to your bank and credit card account. Also, do not use standard numbers like a straight series of numbers like 1234 or all the same number like 1111. Instead, just pick a random PIN number that no one would be able to guess.

Re-evaluate Your Credit Cards
With the new changes in your credit cards taking effect soon, now is the perfect time to re-evaluate all your credit cards. Take a close look at your last statement for all of your cards, paying close attention to the interest rate and your maximum allowance. These rates may have significantly increased since you opened your account, so make sure the rates are still manageable and the maximum amount is not too high. Feel free to contact your credit card company to ask them about your rates or to lower your spending limit.

If you have multiple cards, now is also the perfect time to try to reduce the number of cards you have. You should keep the cards that offer the lowest interest rates or provide the most benefits. Once you have determined which credit cards you want to keep, make a list of how much you owe on each card. Take a look at your household budget and determine how much you have available each month to pay towards you outstanding credit cards. Then slowly start to pay off all your credit cards one-by-one and close out your account once the balance has been paid in full. This can help you get out of debt, while still saving one or two credit cards back for an emergency.

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