Here's a New Idea: a Limited Use Credit Card
More and more, credit cards are required to guarantee hotel and rental car reservations. This is where a limited use credit card comes in handy
These days, I think it's a good idea to set up what I think of as a "limited use" credit card account for travel and Internet use. Instead of using your high-limit Visa or MasterCard to reserve a room or pay for World of Warcraft, use a more constrained card that can't be easily hijacked for credit card fraud.
What the heck do I mean? Read on, and I'll tell you.
Get a rope!
Recently, yours truly was reading in a major metropolitan newspaper about a woman who stole people's credit card numbers while booking hotel reservations for Marriott. She ran up more than $34,000 worth of purchases before she got caught.Ironically, she was nabbed not because people reviewed their credit card statements and started wondering about mysterious charges, but because she walked into a car dealership and tried to buy a $26,000 Hummer with one of the stolen card numbers. D'oh!
Just goes to show that you have to keep an eye on your credit card statements...and you should never, ever use a high-limit card to make a hotel reservation.
The alternative
This is an instance where you can get some good use out of all those pre-qualified applications you've been getting. Pick one with a low limit, and once you're approved, ask the credit card company to lower the limit even further: say, to $1,000, or even less.
Then use that card only for things like small online purchases and ensuring hotel reservations or car rentals; you can always pay in person with cash.
That way, you should be fairly safe from financial ruin if a clerk goes off the deep end or if someone hacks into their reservation system and steals your card number. Even if they peg your limit and you're unable to get the charges dismissed, you've only lost up to that amount.
And another thing...
These days, credit card companies will sometimes send you a warning email or phone call if a significant charge is made to your card. That's annoying if you're trying to buy a new computer, but it's great if some unscrupulous idiot has swiped your card. If they don't do it automatically, ask them to; $100 is a good limit.
I'm not one for credit card proliferation, but it's a fact that it's difficult to ensure a hotel or rental car reservation without a credit card these days--even if you don't want to use a credit card. So if you're worried about credit card fraud, give the concept of the limited use credit card some thought.
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