Tech Update: The Future of the ATM, With or Without Cards

There are so many ways to shop these days, so many ways to pay for stuff, so many ways for other people to get their hands on our money. Credit cards, debit cards, store cards, contactless cards, pre-loaded cash cards for foreign travel, mobile phones and apps, online shopping, and God forbid, if all else fails, cheques. We can shop online; we can buy stuff from internet or TV shopping auctions using our cards or PayPal accounts. But, let’s face it, in spite of all this new-fangled technology, where would we be with good old-fashioned cash? How long could we survive in the urban jungle without some actual money in our pockets?  And where do we get that cash from? Yep, that’s right, from that wonderful and ubiquitous invention of John Shepherd-Barron, the ATM or cashpoint machine.  Click here to read the story of its origins.

We are so molly-coddled in our safe and comfortable 21st Century western society! We expect to have constantly available channels of communication via text, email and phone.  We always have our smartphones and GPS at the ready to keep in touch with work, family and friends, to tell us where we are and what is happening. Heaven help us if we stray too far from civilisation and can’t get a broadband connection. We might actually have to talk to a real person! We might have to put up with being alone with our own thoughts for an hour or two! 

 Is it just me, or is it really annoying that some people can’t do a bit of simple grocery shopping without help from their phone? Can they not just make a simple decision about which brand of baked bean to purchase without consulting their partner?  How do these people manage when they have to make a major life choice about where to live, what job to do or which house to buy? Their brains must be going into meltdown at moments of real stress, poor souls!  How I long for the days when you could go on holiday for a couple of weeks and survive perfectly well without any recourse to the telephone, TV, laptop, tablet or facebook.  As a student in the 70s, nobody would bat an eyelid if I went travelling in the summer holidays and did not contact my friends or family for a couple of months. They just assumed I would be fine, and I was.

But I digress.  As I already mentioned, the ATM is now ubiquitous. Back in the early days, you had to go into a bank to access a cash machine, or at least loiter outside one.  Now they are part of the furniture of every street, shopping mall and railway station. And very useful they are too.  There are lots of clever people working for the banks and tech companies who are constantly thinking up ways to make it even quicker and easier for us to get our hands on our dosh, move it around, or send it to other people, not to mention to spend it even more quickly then ever before, a cynic might say.

Since we are now habituated to having easy access to all those ATMs, we may as well use them to the max. So why not use them as a method of transferring cash abroad? Why not set them up so we can get money out via an app on our smartphone? Or just by tapping in a code, with or without a plastic card or a phone? Or by fingerprint or iris recognition? The potential benefits are clearly increased speed and convenience, but the potential drawbacks need to be considered too. 

Security is always the main concern.  Hackers and skimmers are resourceful people, and they are good at sabotaging ATMs by attaching cleverly-disguised bits of hardware to capture your PIN number. This can be done by the simple expedience of filming your hands on the keypad with a hidden webcam.  The security risk is clear: if it is possible to get at your cash using a code alone, without the need for using it in tandem with a card, hackers and criminals can get at it more easily too.

As things stand, I can’t see why anyone would want to move to a completely cardless ATM system, but it could be useful in certain ‘one-off’ special situations, for example:-

Emergency Cash

Some banks now offer a handy ‘Emergency Cash’ service.  To access this facility you usually have to phone up and report your card lost or stolen.  You will then be given an emergency code number which you key into the ATM,  enabling you to withdraw cash without using a card.  What a great idea: it means you no longer have to wait till the replacement card arrives to get some cash.

To Transfer Money Abroad

You make arrangements with your bank to send cash to a friend or business partner in a different country. By setting a special access code, they can withdraw an agreed sum of money from your bank account, and pick it up at a convenient cash machine without the need for a debit card, simply by using the special code or alternatively, using biometrics.

With or without a plastic card, in addition to cash withdrawal, ATMs are also already being deployed to offer a range of other customer services, such as mobile phone top-up, bill payment and charitable donations.

Obviously, banks and ATM providers are well aware of the rise and rise of the smartphone, and are keen to incorporate it into the ATM network. There are already plenty of mobile apps around which effectively replace the plastic debit card and enable you to make a payment or withdraw cash form an ATM. Future apps are planned to make use of the data about the customer’s location and spending habits to present them with tailored and targeted special offers from local shops.

All of this technology is still very much in its infancy or even still in development, and most banks and ATM providers have yet to fully work out a long-term strategy for implementing cardless ATM systems.  I guess there’s just a lot more stuff available to spend our money on these days too, more temptation than ever before. There were no smartphones, tablets, computer games back in the 60s and 70s. We were happy enough with just a space hopper and a yo-yo, and if our parents could stretch to it, a chopper bike. Blue Smarties hadn't even been thought of! 

Now it seems we need specialist assistance to spend fast and get hold of those high-tech goodies in double-quick time! OK, I know, it’s not for me to say if it’s good or bad to live like this; I am just an old techie turned credit card blogger, but I can’t help having these cynical Luddite thoughts. I’d be really interested to hear from any readers who are working on this technology right now, or anyone with positive or negative experiences of using mobile banking apps.

Frozen!

RBS Customers Locked out Of Their Bank Accounts Again, 

Just in time for Christmas!

You may not have noticed yet, but it’s nearly Christmas. There are just a few days to go before Black Friday, the most important day of the year for retailers. The shops are jam-packed with festive goodies, decorations and toys, and customers are on the starting blocks to get all their shopping done in time for the big day.  This year the must-have accessory for the under-12s is the Frozen doll - Anna, Elsa, Kristoff, or Olaf – from the 2013 Disney movie that has become the highest-grossing animated film of all time. I for one am beginning to panic a bit, as I haven’t even ordered the turkey yet, never mind sorted out any gifts.

The characters from Frozen

Even if you are much better-organised than I am,  if you live in the UK, last Friday morning you may have struggled in vain to buy anything at all from your Christmas present list.  Customers of the Royal Bank of Scotland, Ulster Bank and NatWest found they were temporarily unable to make cash point withdrawals or debit and credit card payments for a short period on the morning of Friday November 21.

This was yet another bitterly embarrassing systems failure for the RBS banking group, made even worse by occurring JUST ONE DAY AFTER it received record-breaking fines totalling £56 million from British financial regulators.   The Financial Conduct Authority (FCA ) fined the bank £42 million, and the Prudential Regulation Authority (PRA) fined them an additional £14 million, after a joint investigation into IT failures dating back to June 2012, when as many as 6.5 million customers were frozen out of their accounts for several weeks. 

After the fiasco of 2012 RBS continued to experience severe IT problems, including having its services disrupted on the biggest shopping day of the year in 2013.  A spokesperson for the bank was quick to point out that this latest incident was just a glitch, lasted no more than 90 minutes, and was put right very quickly.  It happened between 7.45am and 9.15am and mainly affected customers trying to make large transactions or payments abroad. 

Need Christmas spending money? Too bad!

Hmm, a nifty piece of PR perhaps, but that still sounds pretty serious to me, and it must have been beyond embarrassing for the bank, especially for Chief Administration Officer Simon McNamara, who, in response to the announcement of the fines on Thursday, optimistically declared

I can pretty much guarantee that incident will not happen again because of the actions we've taken.

Famous last words, Mr. McNamara! To be fair though, he has been doing his best. The 2012 failure was the result of decades of under-investment in technology at RBS, and since then it has ploughed hundreds of millions of pounds into IT systems designed to minimize risk of failure.

It’s not just RBS who are at fault. Andy Haldane, Director for Financial Stability at the Bank of England, told lawmakers last year that all the banks needed to transform their IT because they had not invested enough during the boom years. Mr. Haldane said 70-80 percent of big banks' IT spending was on maintaining legacy systems rather than investing in improvements. 

To put it in layman's terms, our banks are still relying on old and creaking computer systems  created decades ago. These systems were written in arcane computer languages fully understood only by the IT specialists who wrote them, and who have long since moved on, retired or died, leaving very little in the way of maintenance instructions for the hapless IT staff who followed them.  All of the programs have been patched up and amended hundreds of times since they were originally commissioned. 

Surely the time is ripe for a major overhaul and re-development of those ancient systems. Out with the old and in with new, or,in the words of Elsa from frozen:-

 Let it go!

It's time to see what I can do
To test the limits and break through
Let the storm rage on.

            Let it go!

Tech Update

Are You Ready to Ditch Your Plastic Yet?

It's the Future!

Plastic cards have been apart of our lives for so long now that we trust them and use them every day without much thought. The credit card has been around since the early years of the 20th Century. It’s not just credit and debit cards: these days most of us also routinely use store cards, loyalty cards, Oyster Cards and pre-loadable cash cards for foreign travel. We expect every transaction to happen quickly and smoothly; we expect to be rewarded every time we use them with Air Miles or Loyalty Points; and we expect our personal account data to be kept safe and secure from would-be fraudsters and hackers. That’s a lot of expectation, innovation and technology; all contained in the space of an 85.60 × 53.98 mm plastic card.

But do we even need that small bit of plastic any more? After all, we have our trusty phones now. Even the Luddites and doubters, who, like me, fifteen years ago, swore they would NEVER bother with such a new-fangled, unnecessary, time-wasting and expensive contrivance, have now succumbed. I must admit that, as a grumpy older person, it still annoys me to hear people on the train, in cafes and bars or on the street, bellowing their personal business into their phones for all to hear.  

Why are some people incapable of buying so much as a tin of baked beans without checking over the phone first with the wife?  I have even heard people discussing their impending court cases with their lawyers, maybe nothing to be ashamed of, but usually nothing to be proud of either, on the bus! Why can’t they spend five minutes quietly on their own without phoning or texting? As far as I am concerned, bus and train journeys used to be blessed interludes of peace and quiet and inactivity, a time for staring into the middle-distance, day-dreaming, thinking, or just for a bit of rest and relaxation. Sometimes people even used to have a nice conversation with the person actually sitting next to them. Now these short journeys are just another opportunity for using the phone and conducting business: what a shame!

OK that’s got that personal gripe off my chest, but I suppose now we have mobile phones and smart phones, we may as well use them to the full extent. If you are going to carry your beloved phone with you everywhere, 24/7, and you already use it for social networking and as a camera, why not use it as a handy payment method too? In some parts of the world many thousands of people have enthusiastically embraced the concept of the mobile wallet, plunging straight into digital banking without ever having used a plastic credit or debit card.

In Kenya, for example, millions of people have embraced the mobile wallet technology offered by a Vodafone service called M-Pesa. That’s M for Mobile, and ‘pesa’ is Swahili for money.  In such a vast country with limited access to a transportation network, I imagine that the ability to transfer money to friends and family hundreds of miles away must be a godsend.  Mobile wallet services have also been available in Japan for a number of years now.   Osaifu-Keitai, literally "Wallet Mobile", is actually a trademark of a company called NTT DoCoMo, which developed the system. Osaifu-Keitai services include electronic money, identity cards, loyalty cards, and payment of public transport fares.

For those of you still reluctant to use your phone for banking purposes, I bet the main reason is concern about security.  There are plenty of stories in the news about the security problems with mobile phones. The practice of hacking into celebrity mobile accounts by unscrupulous journalists has been a huge story in the UK, and famously brought about the demise of long-running newspaper the News of the World.  If criminals can do that, you would think that fraudsters can get into our mobile wallets too, right? In fact digital banking and mobile wallets may actually be more secure than a traditional credit card, as they are protected by Chip & PIN security technology, unlike most American credit cards which still reply on the stripe and swipe system.

Simfonie, provided by the New Zealand based payment systems provider GFG Group, is a good example of a state-of the-art mobile banking service.  It now has 135 million subscribers who can use their phones for a complete range of mobile banking services including paying bills and person-to-person transactions, with all the in-built security features you would expect from any reputable bank. Old habits die hard though, and I suspect that most of us will require  some time to get used to the new card-free system, possibly by starting off with using it initially solely for low-value transactions, for example. It is still early days for the mobile wallet and there are some technical issues and limitations to be sorted out with near field technology, I-beacons and blue-tooth, but nevertheless it is definitely coming.

Biometrics: the Next Big Thing

After we have all chucked out our plastic card collection in favour of using our smart phones to pay, the next step in the payment technology revolution will probably be biometrics. Biometrics uses natural, unique human characteristics for identification purposes.   This technology has been around for a long time (think of fingerprinting for crime-solving, iris-recognition at border controls), but is still something new in the digital banking world. One example is Quixter, a palm touch system invented by a high-tech start-up company in Sweden. The Quixter system uses vein-scanning technology to identify an individual  based on the unique vein-pattern in their palm, deducting payment from their previously linked bank account.

So thanks to biometrics, not only can we ditch our walletful of plastic cards, we can chuck out all those pesky mobile phones too!  The downside of this state-of-the-art technology is that in the future, instead of stealing our wallets, plastic cards or phones, thieves and fraudsters will be forced to chop off our hands and use them to get at our money. Something to look forward to...

Foot note

 In 2015, the US will adopt Chip and Pin and Europay, MasterCard and Visa (EMV) smart cards as the standard payment protocol. This means all shops will be forced to invest in new hardware, and the new equipment will come ready-equipped with NFC (Near Field Communications) capability as standard. That will be a huge factor in speeding up the take-up and acceptance of the mobile wallet.

Le Tour de Yorkshire is all Set to Boost Local Economy

We beat off competition from the likes of Barcelona, Berlin, Edinburgh and Florence for the right to stage the greatest event in the global cycling calendar, and now, after two years of anticipation and hype, it is almost upon us.  I am talking about the Grand Depart of the Tour de France, which in summer 2014 is taking place in the most beautiful place on Earth: yes, that’s right, Yorkshire.  OK,  I may be a bit biased because I have lived in Yorkshire and loved it for most of my adult life, and for anyone not already aware, Leeds is also the great location of Arcturus Global Systems HQ.

Those of us lucky enough to live in God’s Own County are already well aware of the impending excitement generated by the Tour.  Mile after mile of the race route has been festooned with cycling-themed decorations, including wicker bike and   rider sculptures, bicycles mounted on dry stone walls, bicycles trimmed with flowers stuck half way up the outside of local hostelries in lieu of pub signs, and mile upon mile of bunting.  The many ‘Field of Vision’ giant land art installations that have sprung up, like  this ‘One Man and His Dog’ work in the fields above Haworth,are so huge they can probably be seen from outer space. 

One Man and His Dog, by Simon Manfield

Even those of us not actually interested in cycling per se are swept up in the frenzy of excitement, and are enjoying the 100-day cultural festival, the first such event in the 111 year history of the tour. Highlights include music, dance, sculpture and a unique multi-media event known as the Ghost Peleton.

With two successive British Tour de France champions, Sir Bradley Wiggins and Chris Froome, in the space of 2 short years, cycle mania is now at fever pitch in the UK. The first stage of the tour route is very special, encompassing some of the finest scenery in Yorkshire, including the spectacular Buttertubs Pass, York Minster, Knaresborough viaduct, Leeds Town Hall, Harewood House and Aysgarth Falls to name but a few.

Well the main point of it all is the local Yorkshire economy. £27m of public money has been invested in gearing up for the Grand Depart, so let's hope it is all worth it. Several years after the Credit Crunch the economy of the North of England is still pretty much in the doldrums, and we have not yet experienced the much-vaunted property boom that is now happening down in London. So fingers crossed this wonderful event is also a great financial success, and brings in the profits that our local hoteliers, shopkeepers, restaurateurs, farmers and campsite owners are hoping for.   Good luck to all of you. My personal contribution to the economy so far is a purchase of a £5.99 ‘Tour de Yorkshire’ tea towel from the Yorkshire Post and a £1 flapjack purchased from charity fundraisers right here in Joseph’s Well : I think that covers it!

Well that’s it from me for now; this has to be a rather brief posting due to time constraints: because of a cycle parade taking place in the city centre and the opening ceremony in Leeds Arena this evening we at Arcturus are already battening down the hatches for road closures and major traffic chaos this afternoon. In a rare gesture of magnanimity the boss has granted us permission to go home early.  He also bought us some cake! So I am off now to sample the many festive delights on offer in the Leeds region this weekend, including a Beer and Music Festival in my local pub.  See you all next week!

Money Lenders Invited into the Temple by the Archbishop of Canterbury

This story first reared its head last summer, (The Archbishop of Canterbury, Jesus, Zacchaeus and Wonga), August 1, 2013.  The Right Reverend Justin Welby had recently been appointed Archbishop of Canterbury, and one of his very first public pronouncements started off as a bit of an unfortunate  PR nightmare for the Church of England. His target was Pay Day Lender Wonga, and he rather  put his foot in it by announcing that it was  his intention to ‘compete it out of existence’ by offering alternative sources of credit to poorer people, completely oblivious of the fact that his own church was itself a major investor in Wonga. Whoops! 

Casting Out the Money Changers by Giotto, 14th century.

Now that was a shame, as I have a lot of respect for Mr Welby, and he is uniquely placed to do some real good for ordinary hard-up struggling people who desperately need some financial assistance. He is definitely not your average Archbishop: with a career history including eleven years in the oil industry and a spell serving on the Parliamentary Commission on Banking Standards, he is possibly better-qualified than most people to comment on ‘sharp’ lending practices. Financial and business ethics have been a long-term interest for him; he has written extensively on the subject, including Explorations in Financial Ethics, and Can Companies Sin?

In his role as Commissioner he gained a reputation for being tough on bankers, famously remarking that the banks served ‘no socially useful purpose'.  He also suggested that senior bank executives were guilty of deliberately avoiding investigating information on shady dealings within their organisations so they could plead ignorance about them later, when the brown stuff finally hit the fan. To be fair, he did temper this by warning against the temptation to act like a lynch mob by naming and shaming individual bankers.

Justin Welby, Archbishop of Canterbury

Nearly a year has passed since ‘Wonga-Gate’, and things have quietened down a bit in the media. The Archbishop has not forgotten his pledge to help the poor: he has been quietly organising and planning and has now put his money where his mouth is, launching a new credit union network from within the church. Starting off by promoting responsible lending in pilots in Southwark, London and Liverpool, the Church Credit Champions Network will train churchgoers and clergy to give advice on debt and other money matters.

The other major player in the new scheme is none other than Sir Hector Sants, ex Barclays boss and former head of the Financial Services Authority. Sants, 58, ran Britain's Financial Services Authority during the financial crisis and joined Barclays at the start of 2013. Suffering from stress, he was placed on sick leave in October that year and left the bank a month later. His new position with the Church Credit Champions Network is unpaid, and will take up about one day a month. Speaking at the launch of the new initiative, he described the Church of England as ‘the best branch network in the country’. ‘A major high street bank has at most 3,000 branches, but the Church of England has 16,000’, he said.

Now, I don't like to boast, but sometimes I amaze even myself. What a flash of inspiration it was, last August, to hark back to the biblical story of Jesus overturning the moneylenders' tables in the temple! I think I must have some psychic powers, because now, in an incredible twist of fate, the Archbishop of Canterbury himself is actually inviting moneylenders into the church!  Who would have believed it?  Don’t worry, Justin Welby hasn’t gone raving mad.  He is inviting them in to help people struggling to make ends meet, not to extort money from them.  Under the new scheme, credit unions are being invited to set up actually inside some churches, but  they will only be offering  savings accounts and small loans to people with low earnings or patchy credit records.   The aim is to build support for community-based financial services and encourage responsible lending and saving. 

In Mr Sants own words: ‘I am confident that the successful implementation of the Church Credit Champions Network will equip churches to be even more relevant to their local communities, and transform the lives of the many people we hope will be served as a result’.

Credit Unions have been around for a while, but account for a tiny fraction of the credit scene in the UK.  They have been steadily growing since the financial crisis, and, who knows, with the full might of the Church of England on their side, we may see a big rise in their influence in the coming months and years.

Beating Card Fraud

Have you ever been annoyed by your credit card company calling up unexpectedly to query a purchase? Of course it can be irritating to be questioned about a perfectly legitimate transaction, and it can be even more annoying when the company is unable to contact you directly, and decides to shut the card down. It’s very inconvenient if this happens in the middle of a trip abroad, for instance, but flagging up and investigating unusual payments is a vital part of the drive to beat card fraud.

Card issuers DO care about fraud as it can cost them an awful lot of money; they ARE doing something about it and they invest valuable time as well as money to fight it. Data monitoring is an important part of the process. Card companies are constantly monitoring your card transaction data looking for patterns and anomalies relating to how much you spend and where and when you use your card. This transaction data is carefully analysed, not by getting someone to laboriously pore over all your card transactions manually, but by using the latest technology to scan through huge amounts of data, quickly, thoroughly and automatically, and to report on anything that looks unusual or suspicious.

For example, if you live in London and normally use your card there, they will notice if you suddenly buy something in Glasgow, and the anti-fraud system will flag it up. That’s why card providers recommend that you inform them when you are travelling abroad. A quick call to your card provider before you travel could save an awful lot of hassle during your trip. If you have a long-established habit of using the card for medium price purchases and suddenly make a splurge on a very expensive item, they will notice that too. The card companies are also aware of geographical fraud hot-spots and will take additional interest in all the transactions occurring there, also of merchants and websites with unusual levels of fraudulent activity.

Another important way that card users are protected from fraud is by the microchip technology embedded in the card itself. Chip&PIN or EMV technology is of course already standard across Europe and provides a better level of security for card users there. The system has been mandatory in Europe since 2006, during which time there has been a dramatic reduction in the rate of card fraud.  The Chip&PIN system was introduced to solve the widespread problem of ‘skimming’ scams, where fraudsters illegally scanned the magnetic stripes on old-style cards and then used the skimmed data to create new ‘cloned’ cards. Chip&PIN replaces the old system of magnetic stripes, signatures and swipes with an embedded chip containing the PIN (Personal Identification Number), a four-digit code known only to the cardholder, which cannot be scanned by skimmers.

Although Europe adopted Chip&PIN technology eight years ago, the USA still clings doggedly on to the old magnetic stripe system, and is unlikely to start phasing in the new technology until 2015.  This reluctance to embrace the new system can be explained by two factors: firstly, consider the enormous cost of the change-over to the card issuing companies and to the merchants.  Quite apart from the costs of running the IT projects to change over to EMV, think about the hardware costs. 

A traditional magnetic stripe card costs about $.25 while a chip card can cost $1.25 to $2.50.  Magnetic card readers typically cost about $20 in volume purchases while a chip reader costs about $40; with a PIN keypad, that can rise to about $100.  The second factor is that the US has a history of low card fraud rates compared to the rest of the world. Unfortunately this enviable record is now threatened by the illegal activities of fraudsters and skimmers who know they can’t operate in Europe any more and so now target card users in the US.  The infamous Target security breach of 2013 in which personal data belonging to 70 million of the store’s customers was compromised may also spur the US on to address its outdated technology.

Another factor which will probably speed up the adoption of the Chip&PIN system is a forthcoming change to US law affecting the rules about card fraud liability.  On October, 2015, liability for domestic and cross-border counterfeit fraud card-present POS (Point of Sale) transactions will shift to the acquirer, either the merchant or the card issuer, if they are unable to process an EMV transaction. The liability shift does not extend to transactions generated from automated fuel dispensers for another two years,  to allow more transition time to account for the higher costs of the hardware required to change the equipment at the fuel pump.

The net result of these changes will be a huge incentive to both merchants to and card issuers to adopt Chip&PIN, and they should be making plans NOW to ensure they meet the deadline. After October 2015, if a customer turns up with an EMV card and the merchant does not have an EMV reader, then that merchant, rather than the issuing bank, will have to take the financial hit  if the transaction has any problem caused by fraud. Technology marches on, however, and it is not impossible that the US may by-pass Chip&PIN technology completely and go straight to NFC (Near Field Communication), meaning that the plastic card system would be ditched in favour of payments made by devices such as smart phones.

Footnote: in the meanwhile, here are some simple things you can do right now to make yourself more secure from fraud when using a credit or debit card:-

• Always shield your PIN when making an in store purchase or ATM withdrawal
• Check you are on a secure site when shopping online. You can do this by looking at the http address at the top left of the screen. If the site is secure you will see the locked padlock or unbroken key symbol in your browser window
• Use a credit rather than a debit card for online shopping
• When paying in a restaurant do not allow the waiter to take your card out of your sight
• Report the loss of a card promptly
• Don’t write down passwords and PIN numbers: memorise them instead

The Top Ten Reasons For Choosing a Credit Card

	Why You Really Should…	…and Why You Actually Do
1	For Online Shopping It is a little-known fact that you actually have MORE rights as a consumer when you buy online. If you buy in-store you only have the right to return goods if they are faulty.  Buy online and, under the distance-selling regs, you have the right to return goods for a full refund, even if they are not faulty.	For Online Shopping Such is the allure of surfing the net and buying goods at the click of a mouse, all from the comfort of your own home, that many people admit to getting a credit card solely to enable them to participate in this spending extravaganza.  For some people it is all just TOO easy, and the temptation to forget the budget and overspend is irresistible.
2	Protecting Your Purchases Buying goods or services on your credit card gives you extra legal protection compared with paying by cash or cheque. Under Section 75 of the Consumer Credit Act if you have a problem with your purchase you can claim back your money from the card issuer, even if the company who sold you the goods goes bust.	For Free Insurance That extra peace of mind that comes courtesy of Section 75 on the Consumer Credit Act is great, but don't assume that EVERYTHING that comes with your card is free, let alone right for you. Until recently, card and identity theft protection insurance were routinely marketed to card customers, and thousands of consumers were mis-sold this unnecessary product.
3	To Pay off Debt with a Balance Transfer Shifting debt from a high-interest rate to a 0% or low-rate balance transfer deal is a great idea, but YOU MUST MAKE SURE YOU PAY OFF THE DEBT BEFORE THE CHEAP RATE ON THE NEW CARD ENDS!  Otherwise you will probably find the interest rate sky-rockets to over 15% APR interest. If you really cannot manage to pay off the debt; shift it again to another card!	To Pay off Debt with a Balance Transfer That’s right; we rack up debt on one card, and then take out another one to shift the debt and get the card provider off our back. Until we stack up another pile of debts on the new card, that is…
4	Travelling Book your flight and holiday on your card and you are protected in the event of the travel company going bust, or having to cancel your holiday.  Some card issuers will also offer travel insurance as part of the package. Think twice before using your card while you are abroad though as you may be stung with foreign commission fees and charges. Look for a credit card specifically designed for overseas spending: there are a few on the market which don’t charge             commission fees or for overseas ATM withdrawals.  Another option would be to go for a prepaid card instead.	To Buy a Holiday Your friends are all signing up for expensive foreign holidays, and though you can’t really afford it, you don’t want to be the odd one out.  So you bung it on your credit card.  Not recommended.
5	Building Credit History At some point in your life you will certainly need to access serious amounts of credit, say to buy a house or a car. Lenders use your credit history, also known as your credit profile, as a way of judging how you will handle credit in the future – essentially they want to be as certain as possible you will handle credit, and your repayments, responsibly. If you have a poor credit history and a poor credit rating, or have never used credit and therefore have no credit history, then your options are going to be severely restricted.	To Make a Major Purchase You can’t afford it, you don’t have the cash in your current account and you can’t be bothered to arrange finance for that must-have item, so you get a card and stick all the debt on there. Well you can’t rock up at a fancy car showroom with a wad of banknotes now, can you?  What you SHOULD be doing (see left hand column) is building a good credit history so that you have access to a good credit deal when you really need it. Or you could just save up...
6	Emergencies Not only does a card provide a useful source of funds when you are faced with an unexpected expense, but it can help in other ways too. Many card issuers include additional insurance cover, including travel insurance, medical emergency cover  and ID fraud protection.	Emergencies They are indeed useful for emergencies and unforeseen expenses, but many of you keep a credit card solely for this purpose and may be missing out on some good deals and benefits.  Don’t forget that using a credit card for cash withdrawal whilst travelling abroad should only be used as a last resort, as it will incur fees.
7	Rewards A tempting offer: spend on your credit card and get rewarded with all sorts of goodies including cash back, air-miles, discounts, and Nectar points.  We all like to get something for nothing, but don’t forget that the rewards are offered to encourage you to spend.  Get drawn into spending more than you can afford on a rewards card and you may be hit with high interest rates.  Be sensible, pick a card that offers the right reward for you, and always make sure you pay it off in full at the end of the month.	Rewards When you apply for a card with a tempting one-off introductory offer, make sure that you DO actually get the bargain deal you are after.  Remember that the card issuer will carry out a credit check on you, and usually it is only the customers with the best credit scores who will be eligible for the best deals. Sometimes you will be accepted for the card, but NOT with the headline offer.
8	Convenience It is important to have access to a credit and/or debit card for use in unforeseen emergencies.  Consider also that there are going to times when you will not be able to pay by cash, for example, on some transport systems.	Convenience They are undeniably flexible, but make sure you are using your plastic appropriately.  With a plastic card in your wallet you are always in a position to pay for most types of purchase, but sometimes you really should stop and consider the best way to handle a major purchase.
9	Budgeting and Expense Tracking I know, I know, this is boring old-fashioned commonsense, but we all need to face up to reality at some point and sort out our personal finances.  A credit card can help with this as it will automatically give you a clear monthly record of all your spending.	Reluctance to Embrace New Technology Using credit and debit cards is one way to avoid the security risks that come with carrying large amounts of cash, but do not assume that they are the ONLY alternative.  Lots of new options are now available, and some of them may suit you better than a plastic card.  Look at PayPay, or payment via smart phone, for example.
10	Because You Did Your Research and Found the Best Deal  Congratulations, you are a savvy customer. Don’t feel too smug though: times change, deals come and go, and the card you signed up for three years ago may no longer offer you the best deal.	Because You were Offered One by Your Bank and it was Easy to Apply  It sounds too simple and obvious to be true, but most of us just say 'yes' to whatever card deal our current account provider offers us.