Part four — This is the last in the series on credit cards in BermudaCredit/debit cards for Bermuda residents: the question arises — do you really need them? And if you do, how should you manage them to your best ability? Why would I ask these questions?And before you consider the answer, as you sip your morning coffee or tea, consider this. Identity theft, hacking and financial scams, including credit/debit card theft, are so prevalent now as to be commonplace, with the most recent firm in the news, Home Depot, appearing to have hacking issues. In two very recent and informative, but discouraging articles — relative to the prior, massive 1.2 billion individual user name and password hacker theft discovered by Hold Security in Milwaukee — written in The New York Times, August 5 and 6, 2014,** (see below for detailed sources) the final comment is that there is no real solution.Thus it is up to you, as the consumer, to be constantly vigilant in protecting your financial interests. I don’t pretend to have all the answers, but here are some suggestions. Embrace your electronic age. If you have the time to play internet games, then whether you can afford a computer, or a Smart Phone becomes irrelevant. You must make the time and allocate some savings to owning an internet connected device. No longer can you afford to rely upon once-a-month paper statements. You absolutely must check your balances in your bank accounts every single day, particularly the accounts directly linked to your credit cards.Here is why:1. Checking your bank balances every day, then verifying your legitimate transactions, allows you to spot any irregularity immediately. Consumers are not always aware that timely notification to your bank (and credit card vendor) is incredibly important. Failure to notify them of a theft can leave you holding the liability payment for all false charges scammed through your account.2. Know the loss coverage terms and conditions of each of your cards — credit and debit — and your bank accounts. Each bank or credit card vendor handles theft differently. Debit card loss coverage tends to be skimpier and is contingent upon immediate notification of the theft. You must do your homework, meaning that you must dig out those terms and conditions and read every single line. The United States Federal Trade Commission (FTC)*** posted some valuable hints, as well. They emphasise timelines for reporting unauthorised charges (losses and theft). They are:[naviga:ul][naviga:li]Zero loss if you report a card stolen, ATM withdrawal or other type of card theft before charges are made[/naviga:li][naviga:li]$50 loss — if reported within two business days after you realise a theft has occurred.[/naviga:li][naviga:li]$500 loss — if your report is more than two business days, but less than 60 calendar days after statement is sent. [/naviga:li][naviga:li]After 60 days, you are out of luck! You are responsible for all money taken from your ATM/debit account and possible more, if the debit accounts are linked to bank account that have been emptied.[/naviga:li][/naviga:ul]3. Never throw away your charge/debit receipts until you have reviewed your account and are sure the charges are recorded legitimately and have cleared your account. Scammers are also good at adulterating charge slips with a different larger number. 4. Never accept, act, or respond to phone calls, snail mail, or faxes purporting to represent a credit card company, the US Internal Revenue Service or any other Government agency. They do not conduct business in that manner. Hang up. Then call your bank, credit card company, or your tax accountant to have them to ascertain the truth. If the alert is real, they will work with you to get it resolved, as well as reporting the scam to the authorities. 5. Ditto. Never accept, act, or respond to an e-mail purporting to represent a credit card company, your bank, the US Internal Revenue Service or any other Government agency. They do not conduct business in that manner. Forward the email to your card company or bank, report the email as phishing to the United States Computer Emergency Readiness Team US-CERT (part of US Homeland Security) https://www.us-cert.gov/report-phishing, then save the email as a PDF for your records and DELETE the actual e-mail. 6. Make sure you keep copies of your actual cards, PIN numbers, bank account information separately in another file — even consider a real, metal file cabinet, instead of another computer or the cloud. And, this includes passports, too. Try replacing a stolen passport when you cannot remember the number or what it actually looks like. 7. Chip Cards are now being issued across the board. I am not sure where Bermuda is in the equation, but request to have your cards reissued in CHIP format.8. Be a cynic — like me. Trust no one with your personal data. 9. Finally, enough with the excuses. Stop resisting. Get into the electronic age as quickly as you can — to protect yourself. Substance and formWill cards always be plastic? Or will smart phones — used substantially now — instead of cards for payments, airline tickets, and other items, completely replace plastic? And if this new innovation accomplishes the goal, will the consumer be more exposed to: a) releasing personal data online — into the cloud and the like, only to have hackers scoop it up, and, b) crippling the ability to conduct personal financial business without the use of electronics? I don’t know the answer to this, but certainly, we have entered a precarious and precocious age where mere mention of one’s name, likes, friends, and pictures can identify you as identity theft material. Recent nude photos of celebrities hacked from various clouds have raised further serious concerns. Ah no, not about the nudity, although that could be classified as stupidity. Naturally, we average people wonder why you’d photograph yourself/loved ones nude then post them up at all! These are personal choices, and besides the protests of invasion of privacy, one still has to speculate about the ulterior publicity motives.However, the overwhelming concern is, if not pictures, what about financial data? Hackers invaded the cloud. Loading your data to some website’s cloud has been touted aggressively as the mantra for all personal filing solutions. Send up your data to the blessed heavens and it is populated across all of your devices, no matter where you are. Most people, one wagers, have no idea just how much of their personal data is out there, nor have they fully considered the inherent dangers.So, the answer as to whether you need a credit card. Well, that depends.If you were born, grew up, retired, and plan to die in Bermuda and have no plans to do any of the following, through the end of your life:? travel abroad? pay for a child’s education? order items from abroad? purchase anything local with a local debit or credit card? accept a job abroad? have medical care abroad, then you do not need a credit or a debit card. Pay cash, write checks and carry on — until your local bank in some future year — not too far off — informs you that they will no longer accept checks or real cash for deposit or expenses.Further, you will now need to use a Smart Phone or a card for all of your transactions. It could happen, sooner than you think.This is our world now.Sources: *New York Times: Russian Hackers Amass Over A Billion internet Passwords By Nicole Perlroth And David Gelles, August 5, 2014http://www.nytimes.com/2014/08/06/technology/russian-gang-said-to-amass-more-than-a-billion-stolen-internet-credentials.html?_r=0*8New York Times: How to Keep Data Out of Hackers’ Hands By Molly Wood, Updated August 6, 2014http://www.nytimes.com/interactive/2014/08/05/technology/what-you-need-to-know-with-russian-hack.html*** US Federal Trade Commission. http://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cardsMartha Harris Myron CPA CFP JSM Masters of Law: International Tax and Financial Services,Appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, SwitzerlandPresident: The Pondstraddler* Life™ Consultancy: international financial planning, publications, presentations for the challenging lifestyles of multinational individuals and their families residing, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle. Specific focus for residents of Bermuda, the premier international finance centre. Contact: martha@pondstraddler.com * Pondstraddler. A person with one foot on each shore whose heart resides in both countries*