Is it better to use credit cards for recurring bills?: Money Matters

Q: Regarding the letter earlier this month from J.A. in Cleveland, whose online bill payments were misplaced by University Hospitals, I had the same problem involving a bank payment to my internet provider (WOW) from Merrill Lynch.

Everything was working fine for over a year, then WOW claimed they hadn’t received payment. So I called them and made arrangements to have payment made each month using my Visa card instead of through online bank bill payment.

WOW dropped the penalty fee and charged my Visa card at once.

This arrangement has worked out very well.

Do you see any problems in using Visa vs. bank bill pay? After this experience, I am considering using Visa on the rest of my creditors to avoid any future problems. One thing I must do, though, is to advise them when my card is renewed with a new expiration date.

E.A., North Olmsted

A: If paying some of your bills, such as your cellphone service or gym membership, through your credit card works for you, then go for it.

A few things to watch out for:

  1. Don’t be complacent about reviewing your bill. Even if it’s charged to your card automatically, you need to look over your bill thoroughly, particularly if the amount changes unexpectedly.
  2. Make sure the creditor doesn’t charge a fee if you pay by credit card. Many companies do charge a small percentage or flat fee for paying with a credit card, because the companies themselves have to pay a merchant fee to the credit card.
  3. Obviously, you should set aside the money in a separate account or at least in your mind to pay the credit card bill when it comes due.

Q: Like another reader you wrote about this summer, I got a phone call and the Caller ID said it was from Chase. I don’t have any accounts from Chase. I refused to provide any information to the person who claimed to be from Chase’s fraud department.

What is going on with calls like this?

T.P., Lakewood

A: The fraudster who called you apparently spoofed Chase’s a customer service phone number, said Chase spokesman Jeff Lyttle. So even though your Caller ID said it was Chase calling, it wasn’t. It was a con artist who likely was calling trying to get you to give up personal information, such as your Social Security number, account password or something like that.

Lyttle said fraudsters can easily mimic a phone number through products like Spoofcard.

With Spoofcard, users can pay for the ability to spoof a number. A user inputs the number he wants to call, and inputs what number he wants displayed to the person on the other end of the call. This creates an untraceable call that seems to come from a legitimate company, but it’s really coming from a would-be thief.

“You’ve given this advice before, and it applies again to this situation,” Lyttle said. “When you’re dealing with an unknown caller claiming to be from a financial institution, and they’re seeking personal information, hang up and call the bank with which you have a relationship. The appropriate number to call can be found on the back of your debit or credit card.”  

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