3 Ways Your…
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3 Ways Your Brain Tricks You Into Using the Wrong Credit Cards (And What You Can Do About It).
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Keeping the wrong credit card at the top of your wallet is like being in a bad relationship: You’re stuck giving more than you get, making the most of the terrible terms and defending your choices to your family and friends. But it can be hard to make a change, even when your card’s a flop.
“We’re all cognitively lazy,” says Brad Klontz, a certified financial planner and associate professor of financial psychology at Creighton University. “Our natural tendency is to stay exactly where we are.”
Mental inertia can cause us to make irrational decisions in all kinds of day-to-day dealings, with long-term costs in well-being. With credit cards, though, the costs are literal. About 1 in 5 cardholders have a card with fees and rewards that are not aligned with their spending habits, according to a recent study from J.D. Power. For many, sticking with the wrong credit card can be incredibly expensive.
Here are three big ways in which your brain snookers you into using the wrong credit card and what you can do about them.
1. The sunk-cost fallacy
What it is: The impulse to invest more resources — time, money, energy — into a situation because you’ve already made an investment and you don’t want it to “go to waste.”
How it tricks you: Suppose you can redeem your credit card miles only for flights with an airline you no longer fly with. You’ve already paid the annual fee for the year, so you feel like you should keep using your card for all of your purchases, even though the miles are now semi-worthless. In trying to “get your money’s worth,” you’re throwing good money after bad, because whether you continue to use the card or not, that fee has been paid, and you’re not getting it back. It’s a sunk cost.
“[People] make up reasons to continue to stick with the thing they’ve already invested in,” says JoNell Strough, a professor of psychology at West Virginia University. “They say, ‘This card has a good reputation.’ Or ‘There must be some reason I paid that $95 fee.’”
Younger people are especially susceptible to this kind of thinking, according to a 2008 study co-authored by Strough. “Young adults have a bias toward imagining that sticking with a bad choice is going to turn out OK,” she says.
(Info continues from: https://www.nerdwallet.com/blog/credit-cards/3-ways-your-brain-tricks-you-into-using-the-wrong-credit-cards/)
A KrebsOnSecurity story last month about credit card skimmers found in self-checkout lanes at some Walmart locations got picked up by quite a few publications. Since then I’ve heard from several readers who work at retailers that use hundreds of thousands of these Ingenico credit card terminals across their stores, and all wanted to know the same thing: How could they tell if their self-checkout lanes were compromised? This post provides a few pointers.
Happily, just days before my story point-of-sale vendor Ingenico produced a tutorial on how to spot a skimmer on self checkout lanes powered by Ingenico iSC250 card terminals. Unfortunately, it doesn’t appear that this report was widely disseminated, because I’m still getting questions from readers at retailers that use these devices.
“In order for the overlay to fit atop the POS [point-of-sale] terminal, it must be longer and wider than the target device,” reads a May 16, 2016 security bulletin obtained by KrebsOnSecurity. “For this reason, the case overlay will appear noticeably larger than the actual POS terminal. This is the primary identifying characteristic of the skimming device. A skimmer overlay of the iSC250 is over 6 inches wide and 7 inches tall while the iSC250 itself is 5 9/16 inch wide and 6 1⁄2 inches tall.”
In addition, the skimming device that thieves can attach in the blink of an eye on top of the Ingenico self-checkout card reader blocks the backlight from coming through the fake PIN pad overlay.
What’s more, the skimming overlay devices currently block the green LED light that is illuminated during contactless card reads like Apple Pay.
The overlay skimming devices pictured here include their own tiny magnetic read heads to snarf card data from the magnetic stripe when customers swipe their cards. Consequently, those tiny readers often interfere with the legitimate magnetic card reader on the underlying device, meaning compromised self-checkout lines may move a bit slower than others.
“The overlay design appears to occasionally interfere with the magnetic stripe reads, leading to greater numbers of read failures,” Ingenico wrote.
(Info continues from: https://krebsonsecurity.com/2016/06/how-to-spot-ingenico-self-checkout-skimmers/)