As coronavirus cases continue to break records in the U.S., you may feel extra generous this year, assuming you haven’t lost your job. The holidays are, after all, the time of year we love on each other through gift-giving.
Because your heart may overrule your head, I typically issue a warning about watching your spending, especially if you’re battling debt. It should be about your presence, not the presents, I urge every year.
This year, amid a pandemic that has left millions unemployed and facing eviction, the advice to stick to a holiday budget may not be needed for those who don’t have money to spend. And a much-needed second stimulus payment any time soon is as likely as a Santa sighting with his eight tiny reindeer on Christmas Eve.
A Gallup poll last month found that 28 percent of Americans plan on spending less on holiday gifts this year than in 2019. Makes sense as the economy is still reeling from a covid-19-related recession.
Still, the pandemic has divided the country into the haves and have-nots with the former still able to shop till they drop — except it’s their typing fingers that may get exhausted.
Online shopping is slated to surge because of covid-19. This year you may not be — nor should you be given the spread of the coronavirus — traveling or gathering to hand out presents. So, let’s talk about the cons that are lurking in your email inbox and online.
Scammers and identity thieves continue to get better at tricking people to give up personal information or steal their money. Many of the scams are the same, the crooks just switch to current events to victimize people, says Tony Anscombe, global cybersecurity expert and chief security evangelist at ESET, an IT security software and services company.
Here are six tips to protect yourself during this holiday shopping season.
— Don’t use your debit card. Understandably, you don’t want to be tempted by using credit, but in this case, online, you will want to dump the debit card. Using a debit card is like sitting in coach on an airplane — you don’t get first-class accommodations.
A debit card does not have the same high-level of protection as a credit card, warns Colleen Tressler, consumer education specialist at the Federal Trade Commission (FTC). “Our advice to consumers is that you want to use a secure form of payment like a credit card,” Tressler said.
When you pay with a credit card for goods, you have certain protections. If your credit card is used without your permission, you can only be held liable for up to $50. And even then, most banks won’t try to collect that from you.
With a debit card, there is not much of a delay from the time of your purchase until the funds are withdrawn from your bank account. This means fraudulent transactions can quickly do a lot of damage. And you may not get a refund soon enough to cover any bills you have coming due.
The reason not to use your debit card is that it gives direct gives access to your bank account, Anscombe said. “If somebody empties your bank account, you might not be able to actually live that month,” he points out. “If your bank account has overdraft protection, potentially they can run through your savings as well.”
If you don’t have a credit card, Anscombe recommends getting a prepaid debit card to shop online.
Here’s another tip from Anscombe and Tressler: Pick one credit card to shop with online, preferably one with a relatively low credit line.
— Don’t be fooled because of your frugality.Don’t let your desire for a discount make you a phishing victim. If you receive an email for a $50 Amazon gift card, a 20 percent discount or a $10 reward, assume it’s a lie. Don’t click on any links. Instead go to the retail site directly to determine if the offer is legitimate.
Also, be careful of phishing emails about scheduled deliveries. The best protection is to suspect everything. If you’re expecting a package and get an email about a delivery, read the subject line and then go directly to the online site to track your purchase.
Anscombe also recommended creating a “burner” email, one that you use only when shopping online.
— Don’t be so loyal. You give up private information and your privacy — not that we have much privacy anymore — when you sign up for a loyalty program. Unless you truly plan on being a frequent customer, don’t sign up for a program that requires disclosure of information that could end up being part of a data breach.
— Don’t store credit card information online. The ease of payment could make you an easy target, Tressler said. The best practice is to use a third-party payment application such as Apple Pay or PayPal, recommends Mike Litt, consumer campaign director for U.S. PIRG, the Public Interest Research Group.
— Check out as a guest. The less information you provide about yourself the better. If you need to create an account to snag a sale, delete it after your purchase, Anscombe said.
— Check out the merchant’s history. Tressler said the FTC has seen an increase in complaints from people who have ordered things online but never received the goods. Some of this is a result of covid-19 and supply chain issues. But in other instances, it’s the result of fraudulent retail websites.
Identity thieves and scammers are extremely skilled at setting up fake websites luring people to them with deep discount deals. If, while searching online you see an item that is significantly less expensive than at other major retailers, that’s often a huge red flag, Tressler said. Don’t just click and buy. Search for the company name adding “complaints” and “scam,” she added.
It’s not safe out there, so shop with caution.
Reader Question of the Week
If you have a personal finance or retirement question send it to email@example.com. In the subject line put “Question of the Week.” Please note that questions may be edited for clarity.
Q: I have filed tax returns for the last two years and should be eligible for the $1,200 stimulus payment. I have still never gotten it. What can I do?
A: There’s still a chance you may get the money you’re eligible for under the Coronavirus Aid, Relief, and Economic Security (Cares) Act. The IRS has until Dec. 31 to issue stimulus payments this year.
However, if you don’t get the payment by year-end, you’ll have to claim it next year when you file your 2020 federal return. It will be called the “Recovery Rebate Credit.”
Retirement Rants and Raves
I’m interested in your experiences or concerns about retirement or aging. You can rant or rave. Send your comments to firstname.lastname@example.org. Please include your name, city and state. In the subject line put “Retirement Rants and Raves.”
Edie L. from Poulsbo, Wash., expressed the same anxiety a lot of retirees have.
“My husband and I are approaching 60 and have begun the process of planning for retirement. I don’t know that there’s a good answer to this, but the part I find most confounding is guesstimating how long we will live.
“My folks lived into their mid-80s; his folks will soon be 85, and doing reasonably well,” she wrote. “We hear of more and more people living into their 90s. The mom of a friend will be 100 in a couple of weeks! I don’t want to run out of money, of course, but also hate the idea of not fully enjoying and using the funds we’ve saved, for fear of running out.”
Here are a few columns that you should read if you too are worried about your money not lasting in retirement.
— Retirement planning is a guessing game. Guess wrong, and you could lose a lot.
— Could you be saving so much for retirement that you’re missing out on living your best life now?
— Rich retirees can’t switch off their savings mode
— Early or late: One senior says ignore the conventional wisdom of waiting to take Social Security. Take it at 62.
— The great Social Security benefits debate: Take it early or wait?
If you want a rough estimate of your life expectancy and that of your spouse, try the Social Security Administration’s Life Expectancy Calculator.