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The Importance of Back-ups

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Sherri left a comment yesterday about an experience she had. I thought it brought up a great point, so I’m posting it here for everyone to see…

This is unrelated to your post, but I wanted to pass this information on to you. I’ll try and keep it short!

My credit card information was compromised via US Mail approximately 1 week ago. I immediately called my credit card company, they froze my account, and issued me a new card. I am fortunate that no fraudulent charges went through. However, I would not receive my new card for 7-10 business days (I wasn’t willing to pay an express shipping charge).

I use my credit card for all purchases and pay it off each month. Without my credit card, I was left with the only “liquid” money I had, which was in my brick-and-mortar bank account, and I could access it with my debit card. I don’t keep very much money in there since I transfer much of my salary into my ING Savings account. Luckily the amount of money in my brick-and-mortar bank account was plenty to cover several unexpected expenses that occurred the past week, but it easily might not have! It was an eye-opener for me that I either need to keep more money in my brick-and-mortar bank account (can be accessed virtually immediately), or I need to have a back-up credit card!

Just thought I’d share my experience in case it might help you or someone else reading this!

Sherri is right. It is important to not have all of your eggs in one basket, so to speak. Thanks for sharing your experience and glad to hear there were no fraudulent charges! 🙂


3 Comments

  • Reply CanadianKate |

    In Canada we have a virtual bank, PC Bank, which offers regular savings accounts that pay and investment savings accounts that pay . It takes 1 day to transfer money from deep savings to regular account (over midnight will do!)

    My daughter puts her salary into her PC investment account at just over 3% (the same as ING pays in Canada) but she can transfer money using the internet so it allows her to keep debit card accessible account very low and max out her interest. She figures she can always wait one day for money.

    One thing we discovered is that we need to have bank accounts at two banks in case one bank card gets compromised. While we were on a 30 day trip to Europe, our son’s card was compromised. He caught it immediately, because he was online checking his account and saw fraudulent activity from an hour before, called and canceled the card. But it was a joint account with me, so my accounts (including the joint accounts with my husband) were all locked as well.

    Luckily it was the end of the trip and we were able to get the accounts reactivated once we were home. Had it been at the beginning of the trip, I would have had no access to my online accounts (therefore no way to pay the bills that were coming due) and no access to money in those accounts from foreign bank machines (we don’t travel with cash, we withdraw money when we get to each country.)

    We do have accounts at two banks and so have some backup but it has us rethinking our joint accounts with the kids since it exposes us to our accounts being frozen even when it had nothing to do with our debit cards.

  • Reply Sherri |

    Yep, I’ve decided to increase the amount I keep in my brick-and-mortar bank account to $2K (up from $1500). I may slowly increase this to 3K or more in the future. Transfers from ING just take too long to count on it in a pinch! I’ve also applied for an additional credit card, although with the financial crisis, I’m afraid I might get declined even with a good credit rating…we’ll see.

So, what do you think ?