Tag Archives: Visa

Visa Hackers & Free Banking

Researchers at Newcastle University found that criminals can hack your Visa card in less than 10 seconds. All they have is your card number and what they’re missing is the three digit security code and the expiry date.

With just a laptop and a simple computer program, they run all the possible combinations of your security code and the expiry. In just a few seconds they have all the information they need to start shopping online.

It only works with Visa who doesn’t have a blocking system when multiple tries are made with your card. MasterCard and Amex block the criminal after just a few incorrect attempts. Now don’t panic. You’re never liable if your card is misused – ever! But wouldn’t you think Visa would care about absorbing millions of dollars in fraudulent charges?

If you’re turning 60 or 65 this year, write a note on your calendar: You’ll be able to get much of your banking service charges stopped! Credit unions are at age 60, but you’ll have to check with your specific bank if they’re at 60 or 65. I do know the Royal is now age 65 as they just changed it. Ah, how to legally rip off tens of thousands of seniors for millions of dollars…it’s detailed in the Money Tools book in the banking chapter.

Walmart Wants to Stop Taking Your Visa?

Walmart, the worlds’ largest retailer announced last week that they’re kicking out Visa in Canada. But I doubt that’ll happen.

Walmart claims they pay over $100 million in merchant discount fees. Those are the fees charged by credit card issuers when you use your credit card for payment. These amount of these fees depends on how much business a retailer does on credit cards. With MasterCard, for example, it’s as low as 1.26% when there’s $3 billion in business a year. Mine, on the tiny business side is 2.75% with Square.

There are over 72 million Visa and MasterCards in Canada, according to the Canadian Bankers Association. Ballpark, 60% are Visa cards, so I doubt this will come to pass. I just can’t see it happening. The average credit card charge in Canada is $103 and the typical Walmart customer isn’t likely to just switch to using their debit card, instead. The “no more Visa” plan is supposed to start rolling out July 18th in Thunder Bay. OK, they didn’t exactly pick the city with the largest volume business in the country. And they made it effective six weeks out. That means we’ll just have to see who blinks first: Visa in lowering the fees for Walmart, or the retailer in realizing this isn’t a winning idea.

Moving From Dot-Com to Not-Com

That was the headline in a really interesting recent Business Week story. Some of the biggest frauds happen by crooks sending spam email called phishing pretending they’re the Royal Bank, Paypal, investment brokers, and other trusted companies. In the last week alone, I received over a dozen. The common one is that there’s been unusual activity in my Bank of Montreal account. Click here and verify it wasn’t you. Well, I don’t deal there, but the crooks are sending millions of emails and lots of people do deal with them. The address shows something like Bank of Montreal fraud alert.com.

Everybody knows the dot-com addresses. The Bank of Montreal owns it. So when people see the bank name – or whoever – they think it’s legitimate. But some crook spent ten bucks registering something similar that’s not the real Bank of Montreal site.

Anyone can buy anything not already used ending in dot-com. That’s about to change: For almost $200,000 companies can now buy their name after the dot – instead of before. So you’ll soon see dot-bank of montreal or dot-Walmart. That makes it impossible for crooks to spoof the site and buy something to pretend they’re your bank, or whoever. It’ll be weird to type in accounts dot bank of montreal but it’ll totally protect companies from anyone else creating pages to imitate them.

These so-called self-branded domains have been sold to thousands of companies already. The first one has already converted: Barclays Bank shut down their Barclays.com and moved to home.barclays. Now customers will know they’re dealing with the real company.

And a moment of silence for some sad news: Visa and MasterCard aren’t happy…he says sarcastically.

Both Visa and MasterCard thought they’d experience a huge increase in business and profits with the drop of gas prices in North America. The logic from them, and from analysts, was that consumers paying a lot less for gas would get them to spend the savings on a ton of other stuff…on credit cards of course – massively increasing their profits.

It turns out that’s not happening at all. People are still charging at the pump. But lower gas prices equates to a lot lower amount for card issuers. That’s a lot lower amount for credit card issuers. However, the savings aren’t being spent! I think that’s great…the card companies don’t. MasterCard says it’s cost them 2% in total card spending and Visa says it’s had “a significant negative impact” on their business and profits. On the upside, the average chequing account balance for Americans is now over $5,700. They’re saving the money instead of heading for the mall!

A New Tim Horton Visa Card

Affinity cards are regular Visa, MasterCard or American Express cards, but they’re issued in conjunction with a company or organization. You can get a University of Vancouver MasterCard, a Target Stores Visa, a Shoppers Drug Mart card, or even a Justin Bieber pre-paid credit card…with a ton of fees. The Kim Kardashian card was pulled off the market as lawsuits started with all the fee traps…but I digress…

As of last week, there is now a Tim Horton CIBC Visa card. With 3,500 locations, the marketing for this card is all over their stores – inside and out. If you’re one of the 5.3 million visits a day, you’ve probably already seen it. CIBC needs the business as they lost half a million cardholders to the TD last year, and Tim Horton will get a big kickback on every charge made.

Yes, I actually read the 12-page disclosure because you aren’t going to…you’re welcome. This is a normal Visa card with a 20% interest rate and no annual fee that you can use everywhere Visa is accepted. The perk, or reward, on this card is that 1% of your purchases can be redeemed at Tim Horton for coffee, or anything else. Since Tim Horton sells over 2 billion coffees a year, I’m sure they can afford some freebies.

After a year of work and research, it’s the first credit card with a blinking light. If that excites you – I’m not sure why. One light will blink if you’re using it as a regular credit card and a second light blinks if you’re using it at Tim’s to redeem your rewards.

Who should consider getting this card? That depends on whether you want to get free coffee, regular price coffee or pay around double the price for your coffee:

If you run a credit card balance: You need (not want) a low interest rate card. There are a half dozen in Canada, including the Scotia Value Visa. You’re way ahead of the game at a 12% rate versus 20%. If you don’t, your so-called free coffee reward will actually cost you double with the extra interest you pay.

If you charge a lot but always pay off your card, you want a reward card with 1.5% to 2% perks. You can get 50% to double the rewards with other cards if you shop around. A listener e mailed me last week. She runs $55,000 on her card a year and pays it off monthly. She shouldn’t chase $550 of free coffee when she can get $1100 of other rewards.

If you charge maybe $500 to $1000 or so a month, and pay off your card, you’re not likely to reach any huge rewards with another card. If you like Tim Horton, this card may be for you. At least you’re getting some return for your spending.

Two more quick things:

As with any credit card, you’re playing with fire and one day you will get burned – it’s just a matter of when, and not if.

One day, I want to issue a new Visa card. It’ll have audio with it, and not just a blinking light. When you use the card it’ll say: Your balance is already $3485.00 are you sure you want to make another charge that you won’t be able to pay off anytime soon?

Visa And MasterCard Win Again

Some time ago, the Retail Council of Canada had gone to the Government Competition Bureau to fight the fact that credit card issuers force them to take every credit card offered, no matter what their discount fee. It’s about the $5 to $6 billion a year in fees for Visa and MasterCard. But they’ve now got a ton of higher-end cards with more perks. Well, guess who pays for those perks? Merchants through much higher credit card fees. And the Competition Bureau just ruled that’s just fine – and their reasoning is confidential. Two and a half years to make a decision and…can’t tell you why…

It made my head explode. Are you kidding me? Now, they claim it’s a regulatory issue for the government and….the Finance Department says they’ll study it. What that likely means is, we’ll stall until it dies off. What was the response from the card issuers? We’re please that we can continue to protect consumers from unfair charges. Hmmm…pleased to help consumers or pleased to protect $6 billion of income? Nice try.

Since we’re on the credit card theme, I received an e mail last week from someone pretty mad. Their credit card issuers dinged them for a $20 inactivity fee. Yup – it’s legal and can happen if they’ve disclosed it on the original application – and it’s getting more common. If you don’t use your card for a year, you may get hit for $10 to $25. Even worse, you may have your account closed out from under you. That’ll have a huge impact on your credit score – your credit rating. It’s another reason to always have two cards from two different issuers. One may get lost or stolen while you’re traveling and you’ll be stranded or one may turn on you and close the account.

To keep your credit card active and part of your credit score, you should use it twice a year. It doesn’t have to anything beyond $20 but it needs to stay alive and any activity will do that.

If you’re looking for a credit card or just want to compare your fees and/or perks to others, there’s a great interactive site at the Financial Consumer Agency of Canada. Here’s the link for it:


By the way: If you search by rate, there are currently 12 credit cards with interest rates under 10%! If you often carry a balance, that’s the only factor, along with no annual fee, you should input and decide on.