Q: My wife and I rarely apply for credit -- we have a Discover card for casual use and a Home Depot card for home-maintenance needs. Should we freeze our credit? And if we do, should we also pay for ID-theft protection on each card?
Freezing your credit can be a good idea if you are concerned about becoming a victim of identity theft and you apply for credit infrequently. A credit freeze prevents access to your report and score so that an ID thief cannot obtain credit in your name. It generally costs $10 to place a freeze at each of the three major credit bureaus (which adds up to $60 for a two-person household) and another $10 each time you unfreeze your account.
The good news is that the rate of identity fraud declined by 12% in 2007. Cleaning up in the wake of ID theft can be time-consuming -- the average victim spent 26 hours doing so last year -- but you are unlikely to suffer a monetary loss. Like most card issuers, Discover does not hold its customers liable for fraudulent charges.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Discover sells ID-theft protection, which includes credit monitoring and insurance, for $13 a month. But, says Gail Hillebrand of Consumers Union, such single-purpose insurance is not worth the price. "If it cost $1 a month, it would be a different equation," she says.
Find out whether your homeowners policy includes ID-theft protection, or whether you can add it on. For example, Travelers charges its customers $25 a year for ID-theft coverage.
Your best bet is to focus on prevention, though. Review your monthly statement for unfamiliar charges, and shred all papers that contain personal information. Order a free copy of your credit report from each of the three bureaus at www.annualcreditreport.com, and stagger your requests so you can review a report every four months.
Find More Advice on Credit & Money Management
-
Stocks Slide to Start September: Stock Market TodaySeasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
Here's What You'd Have If You Invested $1,000 Into Sherwin-Williams 20 Years AgoSherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRAs allow you to fund your retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2025 limits and income-based phaseouts.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
-
When Is Amazon Prime Day? Everything We Know, Plus the Best Deals on Apple, Samsung and MoreAmazon Prime Amazon Prime Day is four days this year. Here are the key details you need to know, plus some of our favorite deals to shop during the sale.
-
How to Shop for Life Insurance in 3 Easy Stepsinsurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
-
Five Ways to Shop for a Low Mortgage RateBecoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.
