What happens to those slips of paper bearing your name, signature and partial credit card number after you leave the cash register?
The question from a reader is probably one that many people have asked themselves. When the meal is over or the bar tab is rung up, you pluck the receipt that says “customer copy” from the pile on the table — hoping those other copies don’t help some ID thief breach your account.
“I was wondering if there is any regulation that states credit card receipts with either partial of full credit card number and also the person’s signature has to be shredded,” Janet asked in an email to CreditCards.com. “I know of a company that throws these receipts in the dumpster every month. If there is a regulation whom do I report them to?”
Good questions. The answer, at least at the federal level, doesn’t seem entirely satisfying.
Rules for credit card receipts are spelled out by the Fair and Accurate Credit Transactions Act. That’s the 2003 law better known for giving you the right to obtain a free copy of your credit reports once a year.
A lesser-known provision of FACTA sets out disposal requirements for credit report information. “Reasonable” methods like shredding are required to keep the information from falling into the wrong hands.
How to dispose of credit card receipts, however, isn’t covered. What the law does say is that credit card receipts should not include the full account number — no more than five digits are allowed — or expiration date.
But there is an exception: Manually written or imprinted receipts are not subject to the number truncation rule, when that is the only way of recording the credit card number.
The Federal Trade Commission says that it encourages any business that handles sensitive consumer information to follow the same standards for disposal that are set out in FACTA for credit report information. Of course, there’s a big difference between a suggestion and a legal requirement.
Financial companies are subject to a higher standard for protecting your information under the Gramm-Leach-Bliley Act. But for bars, dry cleaners, restaurants and other merchants, the dumpster or recycling bin is fair game. And while old zip-zap machines and credit card carbon pack slips are a rarity, they may still be used in situations where electricity and data connections are unavailable — although smartphone applications are making such off-the-grid moments less and less common.
Is there a gap in protection waiting for ID thieves to find and exploit? Or is that moment of anxiety unfounded when you leave receipts lying on the table?
As the Federal Reserve announced today, consumer credit card debt fell by an annualized rate of 4.08% between September and August, a difference of nearly $ 3 billion. At the same time, total debt – such as mortgages and student loans – rose by an impressive $ 11.6 billion.
By NerdWallet estimates, the average household’s debt fell by an annualized rate of 4.9%.
Here are the latest credit card debt statistics from the Federal Reserve:
|Total Credit Card Debt||Average Household Credit Card Debt*||Average Indebted Household Debt*|
|September 2012 (August 2012)||$ 852.0 billion ($ 854.9 billion)||$ 7,150
|Change from August 2012||-0.34%||-0.41%||-0.41%|
|Change from September 2011||0.51%||-0.31%||0.31%|
|Change from August 2012 (annualized)||-4.08%||-4.90%||-4.90%|
|Change from September 2011 (annualized)||6.09%||-3.77%||-3.77%|
*NerdWallet estimates, see methodology for details.
- Average household credit card fell just slightly between September and August, meaning that the average indebted household is still deeply underwater.
- While the absolute amount of credit card debt rose year over year, when you account for population growth, debt per household actually fell.
What does this mean? Credit card debt is on the rise – but whether or not that’s a good thing is up for debate. On the one hand, higher consumer spending puts the economy on a positive track. Higher spending leads to more jobs and higher incomes, which in turn lead to higher spending. However, if wages and employment are improving at this sluggish pace, this might well be an indication that families are borrowing to make ends meet rather than a reflection of a well-founded increase in consumer confidence.
Overall consumer debt
|Total Outstanding Debt||Average Household Debt*|
|$ 2.737 trillion
($ 2.726 trillion)
|Change from August 2012||0.42%||0.35%|
|Change from September 2011||5.54%||4.20%|
|Change from August 2012 (annualized)||5.02%||4.68%|
|Change from September 2011 (annualized)||66.47%||56.11%|
*NerdWallet estimates, see methodology for details.
- The growth of overall debt has been dramatic. The main increase is in non-revolving debt – student and auto loans, mortgages – that are repaid in installments rather than flexible lines of credit.
- Again, the per-household year-over-year numbers are less dramatic than they initially appear, due to population growth.
- That said, the increase is still significant, signaling the growing debt burden.
For historical debt statistics, methodology and a more in-depth discussion of debt and the American household, please see our analysis of US consumer debt.
NerdWallet asked small business owners to share their stories of banking: Have they switched banks? What is frustrating about small business banking? What is their advice for other small business owners?
Learn from their knowledge! We compiled their answers below.
1. Doing your business banking where you do your personal banking is convenient, but fees are sometimes lower at other financial institutions
Ann Marie Landry, Owner of As The Music Plays
“I appreciate the ability to view my company account in the same online account as my personal checking. It keeps everything separate, of course, but being able to have one banking login makes life that much easier.”
Abi Cowell, Owner of Promote Community
“For simplicity’s sake, I opened a small business checking account at Chase, the same bank I use for personal checking. This allows me to transfer funds easily and quickly. In addition, their mobile iPhone app, with the ability to deposit a check, whether I’m at my desk, in my car or at the airport comes in very handy.”
Jon Payne, President of Ephricon Web Marketing
“One feature I like is linking my accounts together online so I can transfer funds easily, and schedule transfers. I suspect most banks offer this now, but I can’t see not having it. As a small business, time is money – and having to call into a phone system or (gasp) actually stop by the bank to transfer between accounts would be crushing.”
Mike Wolfe, President of WAM Enterprises
“When I first started my business, I was banking with Bank of America. I didn’t do any research and already had a personal account with them. Weighing convenience vs. fees, etc. Eventually I decided it was best if we switched to a local bank.
Our current local bank offers small business checking with no fees. No requirements for my debit card (BOA required me to use it monthly) and when I call, a person answers rather than making me go through an automated voice system. I’m happy with our choice to stick to a local bank rather than a national chain.”
2. Credit unions and community banks often have better customer service and lower fees
Sterling Morris, Co-Founder of PoliticIt
“PoliticIt.com banks with America First Credit Union. We’ve found that customer service with a credit union is excellent and checking account fees, if any, are reasonable and flexible to support a small business’ needs. Even when we’re on the road in our 34-foot bus meeting with politicians in different states, we have access to ATMs through the credit union’s network.”
Jeff Kear, Owner of Planning Pod
“We went from a large, national bank that has millions of individual and business accounts to a regional bank that focuses more on business accounts. We moved for two primary reasons:
1. We didn’t have a dedicated point of contact at the large national bank whom we could talk to when we had questions or an issue.
2. The large national bank wasn’t easy to work with when it came to loans and lines of credit; they were very inflexible in the application process as well as in modifying the products they had to meet our needs.
We found that the smaller, regional bank was hungrier for our business and was willing to be more flexible to meet our needs. They didn’t seem to want to sell us products but instead wanted to know what our needs were and customize products and services that met them. With our new bank, I have been very pleased with both their support as well as their ability to be flexible.”
Ron Wood, Ron Wood Public Relations, Ltd.
“We have switched to a credit union (Bethpage Federal Credit Union) that has no minimum balance requirement and even pays interest on our balance, plus gives us free checks. They also offer online access to our account just like banks do and it seems to me that the staff are more courteous. To us, regardless of the state of the economy, every dollar counts.
Tips: You can let your fingers do the walking on the Internet to find a credit union that you qualify for. Check their rates against banks.”
Jim Angleton, President of AEGIS Financial Services Corp.
“Go online to a local community bank that is well rated, regarded in the community and are proactive towards small business and trade business.”
Jeremy Schaedler, President of Jeremy Schaedler Insurance
“We’ve banked with Bank of America for several years now and while we’ve
been very happy with the level of service, the account maintenance fees can
be very high, especially for accounts that we have to have. We’ll probably look at credit unions as an alternative because other major banks such as Wells Fargo seem to have
similar fees and guidelines as BofA.”
3. Think about future financing and loans before you choose a bank
David Handmaker, CEO of Next Day Flyers
“Over the course of our 14+ years we have switched our small business checking account. We learned it’s in our best interest to form a banking relationship that we can keep long term and the number one criteria for us is to know that financing can be available down the road. When evaluating the potential for borrowing, small business owners should ask potential banks the following questions:
1. Are lines of credit offered?
2. What is needed to be eligible for a line of credit?
3. When would the small business become eligible?
4. What types of terms are associated with the line of credit?
5. What documentation is needed to proceed?
Companies should consider the appetite for risk of the banks in their consideration set. Community banks are often friendlier with more personalized service, however they are generally more conservative in their lending practices. This will require small companies to put up more cash for loans.”
4. Look for technology that will make running your business easier
Chris Anderson, Co-founder of Breezi
“We’ve used HSBC for our business banking for the past 3 years. My biggest frustration is the lack of mobile banking options, or even better online banking options. Whenever we have checks to deposit, I have to physically drive to one of the locations – which is terribly inconvenient.
Several banks now give you the ability to deposit checks from a mobile app, but sadly HSBC is a bit behind on this. This seems like such an obvious solution to implement, especially given the fact that their locations are not convenient to get to in many cases.”
Nate Lipton, Owner of GrowersHouse.com
“I have about two credit cards, two bank accounts, and a PayPal account. Rectifying all these accounts by hand was the task of all tasks. I then found out about Quickbooks Online and their module that pulls information directly from your banks. With a little setup, it will basically do your accounting for you. Has been the single biggest
difference in making this small business owner’s life easier in terms of
5. Communicate with your bank or credit union
Erik MacKinnon, Gravytrain
“It really pays to sit down with your business banker to explain your financial transaction model and your cash flow situation so that they are aware of what’s going on. As a fully online business, we’ve had a couple of nightmares with our new checking account. The first is that as a new customer it might seem suspicious to your bank when you start receiving deposits only from online sources. It really paid off to have a conversation with the bank to share the business model and inform them that large deposits would be randomly showing up in the account.
The second issue is that sometimes the bank looks at a large or unusual deposit and places a long hold on it. Again, for a small business having a huge chunk of cash tied up can be pretty tough, especially in the early stages. This is another item that was cleared up by having an upfront conversation with the bank to inform them that a different-than-normal transaction was coming and that the funds are needed for operations. After the first hold, the bank was fine with not holding future amounts as they saw that we had a good track record.”
Robin A. Driscoll, Photographer and Owner of RD Photo
“Every small business owner has their own reasons for switching, but if they had helpful branch advisors to help them find the best account or service there may be no reason to change. I would suggest small business owners start by having a conversation with their local bank business advisor to address any shortfalls they feel their banks aren’t addressing.”
Melissa Chelist, Owner of StorkGifts
“The only thing I think I am missing is a personal banker. I do plan on going into my local branch to attempt to form a relationship with one of the bankers. You never know what you may need in the future.”
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