What Is the CVV on a Credit Card?

What Is the CVV on a Credit Card?

If you’ve made a purchase online or over the phone, you’re probably familiar with the three sets of credit card numbers you have to hand over. These numbers include the credit card number, the expiration date and the CVV. If you’re an online shopping pro, you’ll know where to find the CVV. But what exactly is the CVV on a credit card?

What Is the CVV on a Credit Card?

A credit card’s CVV acts as another line of security against fraud. The CVV, or card verification value, can also be referred to as the CSC, or card security code. These numbers serve as one of the most important anti-fraud measures for a credit (or debit) card, especially with the rise of virtual transactions. So when you make a purchase online or over the phone, giving the CVV assures a merchant that the purchase is legitimate and authorized.

When you use your card in person, retailers can check your ID to make sure you’re the cardholder. But merchants can’t do the same when you make an online purchase. Instead, the CVV serves a substitute for personal identification. Plus, your card carrier can verify your card’s unique CVV in the event verification is needed.

Not all merchants require you to enter your CVV when making a purchase. This doesn’t make a merchant illegitimate, however. In any case, you always want to make sure you’re handing over your credit card information to a merchant you trust.

Where to Find Your Card’s CVV

Card carriers print their CVVs in different places on their cards, so it’s important to know where the CVV is on your card(s). If you have a Visa, Mastercard or Discover card, you can find the three-digit CVV on the back of your card to the right of the signature strip. The number may also be adjacent to either your full credit card number, or just the last four digits of it.

However, if you have an American Express card, you can find the CVV on the front, right side of your card. Also note that Amex calls this number a card identification number (CID). An Amex CID is also four digits instead of three.

What Is the CVV on a Credit Card?

How a CVV Protects You

A card’s CVV comes in handy mostly for online purchases. Again, it acts as another line of defense against fraud. So even if a hacker gains access to your credit card number, expiration date and full name, they still need your CVV to complete the transaction. Luckily, CVVs aren’t as easily obtainable as your other credit card information.

This is due to the Payment Card Industry’s Data Security Standard (PCI DDS). This was created by Amex, Discover, Mastercard, Visa and other credit card leaders to establish standard rules for credit card information storage. One of its main stipulations states that merchants cannot store your CVV after you make a purchase. However, there’s nothing preventing merchants from storing the rest of your card’s information, like the credit card number. This makes it harder for criminals to find the CVV attached to your credit card number.

The CVV also works in tandem with a credit card’s magnetic strip and the newer EMV chip technology. The printed CVV on your card is embedded in the card’s magnetic strip. The chip has a digital CVV equivalent called the Integrated Chip Card Card Verification Value (iCVV). So when you use your card in person, whether you swipe or insert the chip, your CVV will still be confirmed.

Limitations of a CVV

What Is a CVV on a Credit Card?

Typically, the issues that arise with CVVs are often self-inflicted by the cardholder. Since it’s hard for fraudsters to obtain your CVV through a credit card database, they turn to other illegal means. This includes phishing and physically stealing your cards.

These scams occur as the occasional email or pop-up on your computer, enticing you to make an online purchase. Some scams are easy to spot, due to misspelling or other obvious errors. However, because online merchants so often ask you to enter your CVV, hackers can also include that requirement on their fraudulent page. If you enter your credit card information, including the CVV, the hackers have easily gained access to your account.

Of course, there is always the possibility of getting your credit card physically stolen. In this case, the thieves don’t need to hack anything since all your information is there on the card. Your best bet is to cancel your card as soon as possible, request a new card from your issuer and dispute any unauthorized charges made to the account.

Final Word

What Is a CVV on a Credit Card?

While in-person purchases aren’t entirely foolproof, online transactions put you and your information more at risk of fraud. To combat this, credit card providers created CVVs and their associated regulations to help keep your personal credit information safe. You can help protect yourself, too, by only entering your card information on websites you trust.

Tips for Keeping Your Card’s Info Safe

  • It’s important to research and find the right credit card for you. When you’re looking through a card’s features, you should look at its security features. Make sure you’re comfortable with its limits.
  • Never engage with any emails, ads or websites that you don’t immediately recognize as legitimate. This includes not clicking on suspicious links and not entering your credit card’s account number, expiration date and especially the CVV.
  • Be sure to look for a “Secure” tag to the left of the web address of any site you’re making an online purchase through. Only encrypted sites feature these tags, so you can feel confident your card’s information will be safe in these transactions.

Find the Top 3 Financial Advisors for You

Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with top fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by Smartasset and is legally bound to act in your best interests. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

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What Are Mutual Funds? Understanding The Basics

If you’re one of those investors with very little time to research and invest in individual stocks, it might be a good idea to look into investing in mutual funds.

Whether your goal is to save money for retirement, or for a down payment to buy a house, mutual funds are low-cost and effective way to invest your money.

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What is a mutual fund?

A mutual fund is an investment vehicle in which investors, like you ad me, pool their money together. They use the money to invest in securities such as stocks and bonds. A professional manages the funds.

In addition, mutual funds are cost efficient. They offer diversification to your portfolio. They have low minimum investment requirements.

These factors make mutual funds among the best investment vehicles to use. If you’re a beginner investor, you should consider investing in mutual funds or index funds.

Investing in the stock market in general, can be intimidating. If you are just starting out and don’t feel confident in your investing knowledge, you may value the advice of a financial advisor.

Types of mutual funds

There are different types of mutual funds. They are stock funds, bond funds, and money market funds.

Which funds you choose depends on your risk tolerance. While mutual funds in general are less risky than investing in individual stocks, some funds are riskier than others.

However, you can choose a combination of these three types of funds to diversify your portfolio.

  • Stock funds: a stock fund is a fund that invests heavily in stocks. However, that does not mean stock funds do not have other securities, i.e., bonds. It’s just that the majority of the money invested is in stocks.
  • Bond funds: if you don’t want your portfolio to fluctuate in value as stocks do, then you should consider bond funds.
  • Money market funds: money market funds are funds that you invest in if you tend to tap into your investment in the short term.
  • Sector funds. As the name suggests, sector funds are funds that invests in one particular sector or industry. For example, a fund that invests only in the health care industry is a sector fund. These mutual funds lack diversification. Therefore, you should avoid them or use them in conjunction to another mutual fund.

Additional funds

  • Index funds. Index funds seek to track the performance of a particular index, such as the Standard & Poor’s 500 index of 500 large U.S. company stocks or the CRSP US Small Cap Index. When you invest in the Vanguard S&P 500 Index fund, you’re essentially buying a piece of the 500 largest publicly traded US companies. Index funds don’t jump around. They stay invested in the market. 
  • Income funds: These funds focus invest primarily in corporate bonds. They also invest in some high-dividend stocks.
  • Balance funds: The portfolio of these funds have a mixed of stocks and bonds. Those funds enjoy capital growth and income dividend.

Related Article: 3 Ways to Protect Your Portfolio from the Volatile Stock Market

The advantages of mutual funds

Diversification. You’ve probably heard the popular saying “don’t put all of your eggs in one basket.” Well, it applies to mutual funds. Mutual funds invest in stocks or bonds from dozens of companies in several industries.

Thus, your risk is spread. If a stock of a company is not doing well, a stock from another company can balance it out. While most funds are diversified, some are not.

For example, sector funds which invest in a specific industry such as real estate can be risky if that industry is not doing well.

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Professional Management.

Mutual funds are professionally managed. These fund managers are well educated and experienced. Their job is to analyze data, research companies and find the best investments for the fund.

Thus, investing in mutual funds can be a huge time saver for those who have very little time and those who lack expertise in the matter.

Cost Efficiency. The operating expenses and the cost that you pay to sell or buy a fund are cheaper than trading in individual securities on your own. For example, the best Vanguard mutual funds have operating expenses as low as 0.04%. So by keeping expenses low, these funds can help boost your returns.

Low or Reasonable Minimum Investment. The majority of mutual funds, Vanguard mutual funds, for example, have a reasonable minimum requirement. Some funds even have a minimum of $1,000 and provide a monthly investment plan where you can start with as little as $50 a month.

Related Article: 7 Secrets Smart Professionals Use to Choose Financial Advisors

The disadvantage of mutual funds.

While there are several benefits to investing in mutual funds, there are some disadvantages as well. 

Active Fund Management. Mutual funds are actively managed. That means fund mangers are always on the look out for the best securities to purchase. That also means they can easily make mistakes.

Cost/expenses. While cost and expenses of investing in individual stocks are significantly higher than mutual funds, cost of a mutual fund can nonetheless be significant.

High cost can have a negative effect on your investment return. These fees are deducted from your mutual fund’s balance every year. Other fees can apply as well. So always find a company with a low cost. 

How you make money with mutual funds.

You make money with mutual funds the same way you would with individual stocks: dividend, capital gain and appreciation.

Dividend: Dividends are cash distributions from a company to its shareholders. Some companies offer dividends; others do not. And those who do pay out dividends are not obligated to do so. And the amount of dividends can vary from year to year.

As a mutual fund investor, you may receive dividend income on a regular basis.

Mutual funds offer dividend reinvestment plans. This means that instead of receiving a cash payment, you can reinvest your dividend income into buying more shares in the fund.

Capital gain distribution: in addition to receiving dividend income from the fund, you make money with mutual funds when you make a profit by selling a stock. This is called “capital gain.”

Capital gain occurs when the fund manager sells stocks for more he bought them for. The resulting profits can be paid out to the fund’s shareholders. Just as dividend income, you have the choice to reinvest your gains in the fund.

Appreciation: If stocks in your fund have appreciated in value, the price per share of the fund will increase as well. So whether you hold your shares for a short term or long term, you stand to make a profit when the shares rise. 

Best mutual funds.

Now that you know mutual funds make excellent investments, finding the best mutual funds can be overwhelming. 

Vanguard mutual funds.

Vanguard mutual funds are the best out there, because they are relatively cheaper; they are of high quality; a professional manage them; and their operating expenses are relative low. 

Here is a list of the best Vanguard mutual funds that you should invest in:

  • Vanguard Total Stock Market Index Funds
  • Vanguard 500 Index (VFIAX)
  • Total International Stock index Fund
  • Vanguard Health Care Investor

Vanguard Total Stock Market Fund 

If you’re looking for a diversified mutual fund, this Vanguard mutual fund is for you. The Vanguard’s VTSAX provides exposure to the entire U.S. stock market which includes stocks from large, medium and small U.S companies.

The top companies include Microsoft, Apple, Amazon. In addition, the expenses are relatively (0.04%). It has a minimum initial investment of $3,000, making it one of the best vanguard stock funds out there.

Vanguard S&P 500 (VFIAX)

The Vanguard 500 Index fund may be appropriate for you if you prefer a mutual fund that focuses on U.S. equities. This fund tracks the performance of the S&P 500, which means it holds about 500 of the largest U.S. stocks.

The largest U.S. companies included in this fund are Facebook, Alphabet/Google, Apple, and Amazon. This index fund has an expense ration of 0.04% and a reasonable minimum initial investment of $3,000.

Vanguard Total International Stock Market

You should consider the Vanguard International Stock Market fund of you prefer a mutual fund that invests in foreign stocks.

This international stock fund exposes its shareholders to over 6,000 non-U.S. stocks from several countries in both developed markets and emerging markets. The minimum investment is also $3,000 with an expense ratio of 0.11%.

Vanguard Health Care Investor

Sector funds are not usually a good idea, because the lack diversification. Sector funds are funds that invest in a specific industry like real estate or health care. However, if you want a fund to complement your portfolio, the Vanguard Health Care Investor is a good choice.

This Vanguard mutual fund offers investors exposure to U.S. and foreign equities focusing in the health care industry. The expense ration is a little bit higher, 0.34%. However, the minimum initial investment is $3,000, making it one of the cheapest Vanguard mutual funds.

Bottom Line

Mutual funds are great options for beginner investors or investors who have little time to research and invest in individual stocks. When you buy into these low cost investments, you’re essentially buying shares from companies.

Your money are pooled together with those of other investors. If you intend to invest in low cost investment funds, you must know which ones are the best. When it comes to saving money on fees and getting a good return on your investment, Vanguard mutual funds are among the best funds out there.

They provide professional management, diversity, low cost, income and price appreciation.

What’s Next: 5 Mistakes People Make When Hiring A Financial Advisor

Speak with the Right Financial Advisor

  • If you have questions beyond knowing which of the best Vanguard mutual funds to invest, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
  • Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
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The post What Are Mutual Funds? Understanding The Basics appeared first on GrowthRapidly.

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What Is “Accessible Income” on a Credit Card Application?

If you’re applying for a credit card, you might stumble upon this term “accessible income.” In fact, that’s the only situation in which you will come across the term: on a credit card application. So, you need to know what it is.

Accessible income is not just income you earn from your regular job. Rather, it includes much more than that. It includes income from a wide variety of sources, like retirement savings accounts, social security payments, trust funds, just to name a few.

Accessible income can work in your favor because not only you can list income from your job, but also all types of other money you receive in a given year. This in turn will increase your chance of getting approved for the credit card, simply because you can list a higher income.

It also can get you approved for a higher credit limit, which in turn can help your credit score and allow you more spending freedom. In this article, I will explain what accessible income is and the types of income you need to include in your credit card application. Before you start applying for too many credit cards, consult with a financial advisor who can help you develop a plan.

What is accessible income?

Accessible income means all of the money that you have accessed to if you are 21 years old or older. According to the Credit Card Accountability Responsibility and Disclosure Act, lenders are required to offer you credit if you are able to pay your bill. If you do not make enough money and do not receive enough income from other sources and cannot make payments, they can reject your application. That is why they ask for your accessible income.

If you are between the age of 18 and 20, your accessible income is limited to income for your job, scholarships, grants and money from your parents or other people.

However, if you are 21 and older, your accessible income involves way more than that. It includes income from the following sources:

  • Income paychecks
  • Tips
  • Bank checking accounts
  • Savings accounts
  • Income of a spouse
  • Grants, scholarships, and other forms of financial aid
  • Investments income
  • Retirement funds
  • Trust funds
  • Passive income
  • Checks from child support and spousal maintenance
  • Allowances from your parents or grandparents
  • Social security payments or SSI Disability payments

To report that accessible income, just add them all up to arrive at a total and submit it. The credit card companies will not ask you to provide the specific source of each income

What does not count as accessible income

Loans including personal loans, mortgage, auto loans do not count as accessible income simply because they are borrowed money. So, do not list them when submitting your credit card application.

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Accessible income on the credit card application

Accessible income is only associated with credit card applications. In other words, you’re only asked that when you’re applying for credit cards. When applying for a credit card, you should take advantage of all sources of income and not just the income from your job.

So, you should make sure to gather all of the money you have accessed to that year. Not doing so means that you’re leaving other income that is just as important. As mentioned above, you should not include loans or any borrowed money.

When reporting your accessible income, be as accurate and truthful as possible. While some credit card companies may take your word for it, others may ask you to verify your income. In that case, you will need to provide hard proof like pay stubs, bank statements, statement from your investments accounts, etc…

Why providing accessible income important?

Your credit score is the most important factor credit card companies rely on to decide whether to offer you a credit card. However, your income is also important. The higher your income, the better.

A high income means that you’re able to cover debt that you may accumulate on your credit card. And the higher your chance is that they will approve you. The opposite is true. If you have a low income, some credit card companies may not approve you even if you have a good credit score. So, in order to increase your chance, you should take advantage of accessible income.

The bottom line

The only situation where you will find “accessible income” is on a credit card application. Accessible income is all income you have access to in any given year. That includes much more than your paychecks from your regular jobs.

But it also includes all types of money including checks from child support or alimony, allowances from your parents or grandparents, money in your retirement and investment accounts, etc. So, you should take advantage of it when applying for a credit card.

Speak with the Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

The post What Is “Accessible Income” on a Credit Card Application? appeared first on GrowthRapidly.

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Fiduciary Bonds: Definition, Types, Costs

Couple considers a fiduciary bond

A fiduciary bond, otherwise known as a probate bond, is a protective court bond that ensures a fiduciary will honor the expectations placed on them according to the law. The fiduciary bond upholds the interests and protection of the estate or trust owner. To understand who needs a fiduciary bond, how it works and the costs involved, here’s what you need to know.

What Is a Fiduciary Bond?

Fiduciary bonds are legal instruments that act as insurance to protect heirs, beneficiaries or other creditors when a fiduciary commits acts of fraud, embezzlement or other forms of dishonesty. To prevent damage, as a result, the court may require anyone with a fiduciary responsibility to another party to get a fiduciary bond.

Generally speaking, a fiduciary is an individual responsible for safeguarding the interest of another party. Fiduciaries may include trustees, guardians, financial professionals or another party with control over someone’s assets or property. Typically, a fiduciary will take control of someone’s assets when they are no longer able to manage them independently.

For example, a will may name a fiduciary to maintain the decedent’s assets. However, in the absence of a will, the spouse or children may take control, followed by relatives.

A fiduciary bond can range in price and ultimately depends on the value of the estate, as well as a few other factors. It may only be required to pay a portion to fund the bond, rather than the entire amount. For instance, if the fiduciary bond is $100,000, you may only need to pay about $400 to $600, depending on whether you receive approval.

Example of a Fiduciary Bond

Let’s say that John Smith is an elderly man who can no longer manage his property and assets. He didn’t appoint anyone to manage his finances, so the court appoints his daughter, Sally, to manage them in his place. To protect these assets, she may need to secure a fiduciary bond to guarantee she will meet her role’s duties and responsibilities.

The bond will help ensure that Sally won’t sell her father’s estate or embezzle money from him. If someone thinks Sally is not fulfilling the role of a fiduciary, they can make a claim against her. The company that issued the bond will then step in and fulfill the claim.

The company would likely reimburse John Smith for any money lost and then pursue Sally for the reimbursement of funds. If Sally no longer wants to be the estate’s fiduciary, she must find a suitable replacement and get approval from the court to resign. Until she does so, she is accountable for the duties and responsibilities of the fiduciary.

Who Needs a Fiduciary Bond?

A fiduciary bond isn’t always required. If it is mandatory, the fiduciary will receive a notification from the court.

In some cases, beneficiaries or creditors may request a fiduciary bond if they have concerns about the integrity of the fiduciary.

Usually, when banks, trusts or other corporate fiduciaries are in the mix, the courts don’t require a fiduciary bond. This is because there is less of a risk that a corporate fiduciary will compromise the payout.

Fiduciary Bond Types, Costs

Some of the common types of fiduciary bonds include:

  • Personal Representative Bond – This bond reassures the parties invested and connected to an estate that the fiduciary will manage the estate affairs in a responsible and ethical manner. The latter will also comply with local, state and federal laws and duties.
  • Executor Bond – This bond reassures the beneficiaries of an estate that even if the fiduciary doesn’t fulfill their duties, the bond will protect them and they will also receive compensation.
  • Guardianship Bond – This bond protects an individual who is receiving day-to-day care from a guardian. If the guardian fails to perform his or her obligations, someone can make a claim against the person.
  • Trustee Bond – It’s the trustee’s duty and responsibility to handle the trust’s property and assets. This bond ensures that the trustee fulfills his duties appropriately.
  • Administrator Bond – This bond ensures that the administrator of an estate distributes the estate assets according to local, state and federal laws.
  • Conservatorship Bond – A conservator handles the monetary matters of someone who needs to be cared for by a guardian. This type of bond ensures that the conservator upholds the duties and responsibilities of the role.

A fiduciary bond can range in price and ultimately depends on the value of the estate, as well as a few other factors. It may only be required to pay a portion to fund the bond, rather than the entire amount. For instance, if the fiduciary bond is $100,000, you may only need to pay about $400 to $600, depending on whether you receive approval.

Duties and Obligations of a Fiduciary

Financial advisor talks to clientsThere are many different types of fiduciaries; therefore, their duties and obligations vary. For example, an executor’s duties include taking control of a decedent’s property, collecting debts and arranging appraisals of assets. On the other hand, a trustee may have duties such as directing audits, challenging improper claims and determining claimants. In comparison, guardians and conservators may have the extra responsibility to care for an incapacitated individual or minor.

When fulfilling the role of a fiduciary, the individual must have a high level of loyalty since it’s one of the highest standards of care by either equity or law.

It’s important to note that anyone who gives financial advice or handles funds is also a fiduciary. However, if they work for a company, the company is required to obtain a fidelity bond, which differs from a fiduciary bond.

The Takeaway

Two men shake hands

A fiduciary bond protects individuals who have their estate or trust managed and handled by a fiduciary. While the court may not always require a fiduciary bond, there are some instances where it may make sense to protect an individual’s assets. A fiduciary bond is a crucial protection to aid those who may not have other forms of recourse. Bonded fiduciaries are often members of a person’s immediate family.

Estate Planning Tips

  • Consider talking to a financial advisor experienced in estate planning. Finding one doesn’t have to be hard. SmartAsset’s advisor matching tool can set you up with three personalized financial advisor options in just minutes. If you’re ready, get started now.
  • If you have a sizable estate, estate taxes on either the state or federal level could be hefty. However, you can easily plan ahead for taxes to maximize your loved ones’ inheritances. For example, you can gift portions of your estate in advance to heirs or even set up a trust.

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