Credit Card Alternatives

When some of my bankruptcy clients learn that they have to disclose all of their creditors on their petition, they become concerned about the one or two credit cards they want to keep. I usually recommend that they get rid of all credit cards so they can get a complete fresh start. Without credit cards, how can one order plane tickets or reserve hotel rooms? There are some non-credit card options available for people who need to make travel reservations and online purchases.

Bill Me Later: There are a lot of stores and travel providers that offer the option to order a product or service and pay for it later through Bill Me Later. Instead of issuing a credit line, the company extends credit for each transaction. Typically, full payment must be made within 90 days in order to avoid finance charges. This is a safe way to shop online and is a good option when you don’t want use a credit card.

Visa Check Card: Most banks offer Visa check cards with their checking accounts. You can use it like a regular credit card. The only difference is that the money is deducted from your checking account. Like regular credit cards, you are protected from unauthorized charges. The merchant doesn’t need to know that it’s attached to your checking account. When making reservations or purchases, you just provide your account number and tell them your paying with a Visa card.

Paypal: Paypal offers a secure way to shop without exposing your financial information. Money can be deducted from your bank account or credit card without providing account information to the merchant. You can even use Paypal to transfer money to a friend or family member’s bank account. You are protected from unauthorized payments transferred from your account.

Prepaid Credit Card: This is used like a Visa check card, but is an option if you don’t have checking account. You deposit money on the card and can use it until the money runs out. Unlike the Visa check card, there are typically fees for making deposits.

Bankruptcy Myths

Here is an informative video about common bankruptcy myths:

Scamming Lawyers

There are so many variations of the same scam. Someone sends someone a check to deposit into a bank account and a portion of the funds is sent to the scam artist. Several weeks ago, I was surprised to receive an email from someone stating that he was looking for an attorney to collect on some delinquent accounts for his company. I immediately searched the internet for the name of the company and discovered that some lawyers have fallen victim to a scam by agreeing to represent the company and accepting a retainer.

Apparently, the retainer was large and required the attorney to refund a portion of the money. Another variation was when the attorney received a check after supposedly collecting on the bad debt. The attorney was to deduct his fees out of the check and send the remaining money to the client. In either case, the check was ultimately discovered to be no good.

Although some attorneys discovered the scam before it was too late, I was surprised to learn that at least one did actually lose money as a result of it. As attorneys, we often try to be careful about who we represent and we inform our clients to read everything they sign. So, I was surprised that an attorney would agree to represent a foreign client without verifying everything. The scam artists are becoming craftier; they have even started using the names of legitimate businesses. However, a huge red flag needs to go up anytime someone asks you to deposit money into an account and send some of the money back to him or her. This is especially true when dealing with large sums of money.

Many people don’t realize that a bad check can clear temporarily. If it takes a bank a month to discover that a check was forged, then you will have to return any of the funds that you spent. There are also fake money orders and cashier’s checks so you still have to be careful with those also. It’s better to just avoid that seems like a scam whether it’s someone trying to transfer a relatives money, a Western Union secret shopping job, or an foreign client with a large retainer.