MONEY everyday money

The Scary Link Between Credit Card Debt and Depression

woman holding fan of credit cards
Peter Muller—Getty Images

There's a significant relationship between depressive symptoms and short-term debt, according to a new study of 8500 consumers

A recently released study shows that people with credit card debt and overdue bills are much more likely to experience symptoms of depression than those who don’t have such debts, particularly if they are near retirement, unmarried or less educated. The more short-term debt a person had, the more frequently they reported feeling those symptoms.

The research, published May 1, comes from the Institute for Research on Poverty and the Center for Financial Security at the University of Wisconsin-Madison. It is based on interviews with 8,500 people between 1987 and 1989 and again between 1992 and 1994 — periods during which unsecured debt grew quickly in the U.S. — through the National Survey of Families and Households. NSFH survey respondents were asked to say how many days of the week they felt each of the 12 depressive symptoms used in the Center for Epidemiologic Studies Depression Scale. Researchers analyzed those responses and how they related to the responders’ self-reported debt profiles.

With that information (and some complex algorithms), the researchers found a significant relationship between depressive symptoms and short-term debt, defined as credit card debt and overdue bills (bills on which someone has owed a sum for more than two months). However, mid-term debt (like personal loans or auto loans) and long-term debt (mortgages and education debt) didn’t translate into frequent experiences with depressive symptoms among people who held it.

A few things to note about these findings: “Depressive symptoms” is not synonymous with clinical depression. Additionally, the data was collected well before the mortgage crisis and following recession, when long-term debt was the cause of many people’s financial hardships. Student loan debt has also grown significantly in the past 20 years. Since the financial crisis, lenders have restricted credit access, though credit is beginning to open up again.

Still, the implication that credit card debt and overdue bills correlate to depressive symptoms is something many people today can probably relate to. Not only can such debt be extremely expensive, by way of high interest rates and fees, but it can also seriously damage your credit standing, adding to the stress of the situation. Getting in control of your debt is crucial to improving your financial well-being, and it can be an emotionally rewarding accomplishment, too. You can use a free credit card payoff calculator to help you plan your way out of the dumps, and it helps to see how your credit fares along the way. You can get a free credit report summary every 30 days on Credit.com to track your progress.

More from Credit.com:

MONEY credit cards

8 Credit Card Tricks Every Shopper Should Know

towering pyramid of credit cards
Walker and Walker—Getty Images

Pro tips for getting the most out of your credit card

We’re getting smarter about our credit cards: According to new Gallup research, more Americans are relying less on them. In fact, credit card ownership is at an all-time low, with 64 percent of those surveyed paying off their balances in full each month, the highest percentage Gallup has recorded.

Still, we can get even more clever with credit, especially since there’s power in wielding plastic as long as you do it the right way. Want to know how to beat the banks at their own rules? Read on for eight great tips.

Ask for a Lower Interest Rate

First, the good news: Two out of three credit card holders who ask for a lower interest rate get their request honored. A bank won’t lower your interest unless you ask, so consider calling if you’ve had an account for a long time and show a good payment history.

Now the iffy part: Sometimes, a bank may consider this new deal as a request for new credit, which activates a new credit check that can take a toll on your credit score. Make an anonymous inquiry to your credit card company first to find out their policy on altering interest rates. If they do it with ease, then it’s time to bank on the savings.

Consider a Limit Increase

Do you find that your balance is moving too close to your credit limit — even if you pay it off in full each month?

“Many love to use their credit card for just about everything so they can earn rewards,” says Gerri Detweiler, director of consumer education at Credit.com and author of Reduce Debt, Reduce Stress. “Still, you may be hurting your credit scores.”

Request a higher credit limit to protect your credit rating. By boosting the gap between your balance and your credit limit, your credit utilization (the amount of credit you’re using versus the credit available) will stay lower as you reap reward points. Caveat: Use this strategy when you have the hard cash to pay off those bills monthly. You need to be a disciplined credit card user to pull this off.

Move Your Due Date

Why settle for the payment due date your credit card company gave you? Make payments slip-up-proof by calling your creditor to change the date to one that works best for your paycheck cycle.

It can be as easy as a toll-free call to your creditor — and the request is almost always approved.

Pay Mid-Cycle

Even when you move your payment due date, it’s often better to pay credit card bills mid-cycle (if you’re carrying over a balance) than at your due date. “The balances that appear on your credit reports are usually based on your balance at the end of your billing cycle, not after you’ve made your payment and paid it off,” says Detweiler.

“One strategy is to go online to make a payment early — a few days before the end of the billing cycle — so that the balance that gets reported to the credit bureaus is lower,” Detweiler adds. When you’re seeking to pay down a debt or boost your credit rating, this plan can help.

The Secret to Avoiding Interest

Thanks to the consumer protections of the CARD Act of 2009, plastic users who do not carry balances month to month and have signed up with a credit card that offers a “grace period” have at least 21 days from the time of purchase to pay off the charge in full without accruing interest.

Note: Grace periods do not include balance transfers or cash advances.

Double Dip Rewards

One of the best reasons to use credit? Taking advantage of the rewards, whether they’re airline miles or cold hard cash.

Detweiler is a huge advocate for this and says you can double dip on rewards by being more strategic. “Let’s say your credit card gives you reward miles for each purchase. You then use a portal or program that also earns you even more rewards,” says Detweiler. Credit card websites usually offer their own portals, like Chase Ultimate Rewards and Discover Deals.

For example, book accommodations on a travel portal like the Hilton HHonors reward program, which offers points for booking through it. Then charge the trip on a credit card that also offers a rewards program so you get points for both Hilton stays as well as on the credit card you paid with.

Of course, look out for deals like this only if you’re already in the market to make these kinds of purchases. Adding a few points here or there without accruing enough to reap the rewards could be a waste of time.

Plan Ahead When Traveling

It’s often easier to use plastic when you travel abroad, but choose the right card, says Detweiler. “If you are going to be traveling overseas, make sure you have a card that charges no foreign transaction fees. [They] can add 2 to 4 percent to the amount you purchase.” All Capital One and Discover credit cards waive this fee, as well as some AmEx and Chase cards. NerdWallet has a full list.

Another tip from Detweiler: If the merchant gives you a choice to make your purchases in the local currency or U.S. dollars, choose the local currency. “The option of paying in U.S. dollars is called dynamic currency conversion, and it’s almost always going to be more expensive,” she says.

Bring Down Your Balance

When you carry credit cards, this mantra can’t be repeated often enough. Wielding power with plastic starts with paying your bill in full each month.

Still, maybe that’s not possible this month and you want to know what the next-best option is. Here it is: “With most credit-scoring models, you want to stay 20 to 25 percent below your credit limit at the most,” says Detweiler. “One of the factors most credit scoring models look at is the ratio of your balances as compared to your credit limits. If you charge a lot, this ‘debt usage’ ratio may be high.” So if you can’t pay it all off yet, aim to hit that sweet spot.

More from Daily Worth:

MONEY Financial Planning

Kill The Clutter: When to Toss Financial Documents

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Getty Images

A handy guide to what to keep and what to throw away.

If you haven’t already opted to go paperless, you might be swimming in a flood of receipts, bills, pay stubs, tax forms, and other financial documents. But it doesn’t have to be that way. Some of those papers need to be kept, but others can be shredded and tossed.

Here’s a guide on what to keep and for how long.

Receipts
Receipts for anything you might itemize on your tax return should be kept for three years with your tax records.

Home improvement records
Hold these for at least three years after the due date of the tax return that includes the income or loss on the home when it’s sold. If you plan to sell the house and you have made improvements to it, keep receipts for those improvements for seven years — you may need them to lower the taxable gain on the house when you sell it.

Medical bills
Keep receipts for medical expenses for one year, as your insurance company may request proof of a doctor visit or other verification of medical claims. If your medical expenses total more than 10% of your adjusted gross income, you can deduct them. If you plan to take that deduction, you’ll need to keep the medical records for three years for tax records.

Paycheck stubs
Keep until the end of the year and discard after comparing to your W-2 and annual Social Security statement.

Utility bills
Keep for one year and then discard — unless you’re claiming a home office tax deduction, in which case you must keep them for three years.

Credit card statements
Keep until you’ve confirmed the charges and have proof of payment. If you need them for tax deductions, keep for three years.

Investment and real estate records
Keep for three years, as you may need the documentation for the capital gains tax if you’re audited by the IRS. These records help track your cost basis and the taxes you owe when you sell stocks or properties. Once you receive the annual summaries, you can shred your monthly statements.

Bank statements
You’ll need bank statements for up to three years if you are audited by the IRS. If your bank provides online statements, you can switch to receiving your bank documents online and cut down on paper.

Tax returns
The IRS recommends that you “[k]eep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.” If you file a claim for a loss from worthless securities or bad debt deduction, keep your tax records for seven years.

Records of loans that have been paid off
Keep for seven years.

Active contracts, insurance documents, property records, or stock certificates
Keep all these items while they’re active. After contracts are completed or insurance policies expire, you can discard these documents.

Marriage license, birth certificates, wills, adoption papers, death certificates, or records of paid mortgages
Keep forever.

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MONEY everyday money

The New College Grad’s Guide to Money

So long, college! Hello, adult life! Here's a quick and painless lesson in real-world finances for the class of 2015.

Person putting coin in mortarboard
John Kuczala—Getty Images

Graduates of the class of 2015, it’s time to further your education. Yes, you just spent four years amassing a crazy amount of knowledge. But despite all you’ve learned, you possibly still have an incomplete in one subject: money. Suddenly you’re at a financial turning point, facing challenges like finding a place to live and starting a new job. At the same time, your college friends have scattered across the country, the clock is ticking on your student loan grace period, and you are feeling broke, really broke.

Don’t worry. The basic money skills you need to get on your feet are easy to master. And by doing so right out of the college gates, you’ll have more opportunities off in the future—and greater peace of mind right away. So, drawing from the advice of recent graduates and experts familiar with your challenge, MONEY offers you this cheat sheet for launching your post-college financial life.

  • BUDGETING

    Money

    Make Technology Your Friend

    Remember life before college? Seasonal wardrobe updates, lots of dinners out, new cellphones on a regular basis? Well, Mom and Dad worked a good 20 years or so before they could afford that lifestyle, so don’t expect to carry on as you did when you lived at home.

    If you play it right, though, you can enjoy a taste of what’s important to you, with enough left over to start building a cushier future.

    The plan: Automate. Direct deposit and auto-deduction make it easy to set aside money before you can spend it. To make sure you have enough for large, regular monthly outlays like rent, savings, and student loans—more about those expenses later—set up your pay-check for split deposits. Put money for big necessities in one account, cash for everything else in another.

    Then it’s just a question of making those remaining funds last until your next paycheck. To do that, you don’t need a life of self-denial; just think about spending in terms of tradeoffs: Would I rather buy x now or y later?

    Handy tool: The Mint app tracks your cash and can build a budget from your past spending.

    One grad’s story: When Sean Starling, a 2013 Morehouse College graduate, started his first job out of school, he thought he was set. “I was like, ‘I’m making money now, and I can spend whatever I want,'” says Starling, 25. Repeatedly running out of cash—and failing to save enough—changed his mind. He used Mint to track his spending, then moved to Excel for more detail. With his budget now under control, Starling, a cost analyst, is repaying student debt and saving up for his September wedding. “Whether you use a piggy bank or Mint or an Excel spreadsheet,” he says, “find a way to make the savings process your own.”

  • HOUSING

    Money

    Share and Save

    Most likely, you’ll share your first home post-college with a roommate or two. And there’s a good chance their names will be Mom and Dad. Whomever you’re living with, make it a time for saving money.

    The plan: Moving out of your childhood home? Aim to spend no more than one-quarter of your income on rent, advises Ben Barzideh, a financial planner with Piershale Financial Group in Crystal Lake, Ill.

    Moving back in with the folks? Be sure to wash your dishes. But you’ll really warm their hearts if you take advantage of your rent-free digs and set aside at least 25% of your salary—the money you might have paid for rent—to start a getaway fund.

    Handy tools: Splitwise makes it easy for roommates to figure out who owes whom for different housing expenses. “It’s super-fast and streamlined,” says Zach Feldman, a 24-year-old New York University graduate living in Brooklyn. “It takes maybe 10 minutes out of the month to get my bills done.” The Venmo payment app makes it simple to settle up and verify that everyone has paid up.

    One grad’s story: Kristine Nicolaysen-Dowhan, 24, moved in with her mom and stepdad in Grosse Ile, Mich., after graduating from the University of Michigan in 2012. Her first paycheck went toward clothes for work; her second paid off debt. Within four months Dowhan was saving a whopping 75% of her salary. “The rest I just had as fun money,” she says.

  • CREDIT CARDS

    Money

    Handle With Care

    Credit cards are great—in moderation. They’re useful as backup in emergencies, and paying on time helps build your credit score—good for lower rates on future home and car loans. (Employers and landlords also use your score to gauge your reliability.) The downside: Plastic makes it easy to spend money you don’t have, at a high cost.

    The plan: Get a card—just one—and use it sparingly. (Starling reserves his card for emergencies and online purchases.) Activate text alerts in your account for upcoming bills. To help your score, pay on time and keep charges to one-fourth of your credit limit. And pay each month’s bill in full; if your card charges interest of, say, 20%, keeping a balance for a year means that every $100 you spend will cost you an extra $20.

    Handy tool: MONEY’s credit card guide points you to the best available cash-back credit cards—good if you pay your full bill each month—and the best card for first-time card users.

  • STUDENT LOANS

    Money

    Pick a Plan

    You can’t wriggle out of repaying student debt, but you can choose how you pay. Instead of a standard 10-year plan, you have other options: lower initial payments or more time to repay, in return for higher interest costs. You have six months after graduation to choose a plan (which you can change later).

    The plan: Run numbers to see what you can manage. On the average federal loan balance of $27,000 for a four-year public college, you’d pay $272 monthly under the standard plan; under another one that bases payments on your income, a person making $35,000 would begin paying just $146 but owe $3,100 more in total interest. Automatically deduct payments from your bank account; paying on time helps your credit score. At tax time, deduct your interest payments, up to $2,500, on your return (the deduction is phased out for singles making more than $80,000). Tax savings: up to $625.

    Handy tools: Get a list of your federal loans at nslds.ed.gov. Use the government’s Repayment Estimator to ballpark payments under different plans.

  • YOUR JOB

    Money

    Don’t Say Yes So Soon

    Relax. Based on horror stories of recent years, maybe you’ve decided you’re lucky to get a job, any job, at any salary. But you may have more bargaining power than you think. In the best market for new grads since the financial crisis, nearly two-thirds of employers—an all-time high—plan to raise starting salaries over last year, reports the National Association of Colleges and Employers.

    That positions you well for a salary negotiation, which can pay big dividends over time. A bump in pay of $5,000 by the time you’re 25 years old translates into a $634,000 boost in lifetime earnings, according to a study out of Temple and George Mason universities.

    The plan: Don’t accept an offer right away. Salary.com says 84% of employers expect applicants to negotiate their salary. And compensation data provider PayScale found that 75% of workers asking for more money got at least some of their request.

    When you do ask, tie your case (politely) to other offers you may have or to experience you bring—say, a previous internship—that will help you hit the ground running.

    Handy tools: PayScale, Salary.com, and Glassdoor will give you a realistic sense of salary ranges, taking into account factors such as company size and location.

    One grad’s story: When Kirk Leonard, 24, a 2013 graduate of Lamar University in Beaumont, Texas, was offered a job as an office manager at a local dialysis facility, he laid out the case for his future boss as to why he deserved higher pay: Having worked for the company before, he knew its operations. And he could start right away—saving the company the time and hassle of a job search. The payoff: a salary 10% higher than the original offer.

  • HEALTH INSURANCE

    Money

    Get Covered

    Another reason to worry less this year: Thanks to Obamacare, it’s easier and cheaper than ever to get health insurance to cover major medical expenses. Any plan you sign up for should include a free annual checkup and access to prescriptions for birth control.

    The plan: The cheapest route is probably to stay on (or return to) a parent’s plan—open to you until you turn 26. You may not want to, though, if you live far from your parents; finding in-network doctors and hospitals might be difficult, says Carrie McLean of eHealth.com.

    Insured through work? Since being young means you’re (probably) healthy, you might pick the company plan you’re offered with the lowest upfront cost and highest deductible (the amount you pay before insurance starts kicking in). But, warns Karen Pollitz of the Kaiser Family Foundation, be sure you can quickly scare up the deductible, which can be as much as $6,600 this year; a broken leg, for example, can easily cost thousands.

    On your own? Hit the government exchange. Plan labels range from Bronze to Platinum, based on premiums and out-of-pocket contributions. You’re likely eligible for subsidies if you make less than $46,680 in 2015. The silver plan is a good pick, since a break on out-of-pocket costs (if you earn less than $29,175 this year) is available only with that choice.

    Handy tools: To buy through the government exchange, start at healthcare.gov/lower-costs and see if you qualify for discounts. Making less than $16,105 this year? Check the map at kff.org/medicaid to see if your state offers a free plan.

     

  • EMERGENCIES

    Money

    Stash a Little Cash

    Stuff happens—stuff that costs money. Your car might break down… or a friend might invite you to his spur-of-the-moment Vegas wedding. Be ready without having to fall back on a credit card you can’t pay off.

    The plan: An emergency fund of about $1,000 is enough for you, says Barzideh. Set a little money aside from any graduation checks you might receive, and add $50 or so a month into a bank account—one that’s separate from your day-to-day account, so you won’t be tempted to raid it for everyday needs.

    Handy tool: Keep your money in an online bank like Ally.com. There’s no minimum balance or monthly fee; the interest rate is now 0.99%.

  • SAVINGS

    Money

    Get Richer Now

    You too can be a millionaire later in life. The earlier you start saving, the easier it is, and the more freedom you’ll have later on. “You don’t know what choices you’ll be considering in 20 or 30 years, but you do want to have choices,” says Brenda Cude, a professor of financial planning at the University of Georgia.

    The plan: The best place to save long term is in a 401(k) retirement savings plan, offered by employers of nearly 80% of workers. You aren’t taxed on the money you put in that 401(k), and it grows tax-free over the years (you’ll pay taxes on withdrawals). Most employers will match a portion of your contributions, typically 50¢ for every dollar on the first 6% of pay. Start small, putting aside $50 or $100 a month.

    If you don’t have a 401(k), you can put up to $5,500 this year in an individual retirement account called a Roth IRA, where your investments will grow tax-free. (You can open one up through any major fund company, such as Vanguard, Fidelity, or T. Rowe Price.) You get no upfront tax break, but you won’t be taxed when you take money out. And that’s good, since your tax rate will probably be higher later on than it is now.

    Wherever you save, the best starter investment is a mutual fund called a target-date fund. It will give you, in a single investment, a package of stocks and bonds that’s right for your age.

MONEY

One-Third of Americans Are Making This Silly Financial Mistake

blindfolded man
SuperStock

And it could cost them money.

Didn’t check your credit report this past year? Or ever? You’re not alone.

Despite having access to one free credit report a year from each of the three major credit agencies, 35% of Americans chose not to monitor their report, according to a survey released today by Bankrate.com. Two age groups particularly averse to ever requesting credit reports are senior citizens (44%) and millennials (41%). Moreover, about one-seventh of adults wait more than a year between credit checks.

Of course this is silly behavior. After all, you are entitled to a free credit report from TransUnion, Equifax and Experian, and can receive one by going to AnnualCreditReport.com. And a credit report is important: It’s a history of your interaction with all kinds of credit operations and is a guide by which your bank, boss, and others will gauge your ability to deal with debt. If you consistently pay your credit card late, or miss a mortgage payment here or there, that’ll show up on your report. Your credit score is derived from the information on your report, and your credit score helps to determine how much interest you’ll incur when you borrow money. So a mistaken report can cost you serious money. Errors are not altogether rare, per a 2013 FTC study, which found that 5% consumers had incorrect information on one of their credit reports.

To get a sense of how much mistakes can potentially cost you, check out this cost of debt calculator by Credit.com. A New York man in his late-30’s with fair credit will spend around $603,000 on interest payments over his lifetime. That same man with good credit will spend around $80,000 less. Mistakes on your credit report can lead to lower credit scores, and are likely to blight your credit history unless you take action. Which will be hard to do unless you check your report.

 

MONEY credit cards

Can You Buy Marijuana With a Credit Card?

Conte's Clone Bar & Dispensary in Denver, Colorado
Craig F. Walker—Denver Post via Getty Images Conte's Clone Bar & Dispensary in Denver, Colorado

Despite legal uncertainties, some pot dispensaries accept plastic.

It’s been more than a year since legal recreational pot sales started in Colorado, and as much as dispensary owners enjoy the booming business, they’re sick of swimming in cash. Though the Department of Justice released regulations last year allowing banks to accept money from legal dispensaries, it’s still a federal crime — the announcement that the DOJ won’t pursue institutions that process legal pot money hasn’t been enough to make everyone comfortable.

It seems some Colorado business owners have run out of patience waiting for the banking industry to get on board with legal cannabis sales. According to a poll of 78 state-licensed dispensaries in the Denver area conducted by FOX31, 27 (or 47%) of them would be “willing to accept Visa or MasterCard as payment.”

Some of them may be working with financial institutions that have decided to accept money from legal cannabis sales, despite federal laws, but they’re probably trying to downplay or conceal the nature of the business, FOX31’s investigation suggests. Credit card transactions conducted at legal dispensaries produced receipts with company names like “AJS Holdings LLC” and “Indoor Garden Products.” Even though the federal government has said it will stand by and let legal dispensaries use the banking system and the credit card transactions it enables, that hasn’t erased the concerns over Drug Enforcement Agency audits for money laundering.

Given that credit card processing at marijuana dispensaries remains risky, it’s interesting that nearly half of the companies polled by FOX31 said they’d accept credit cards. (It was unclear from the story if the dispensaries polled actually have the ability to process such payments or if they’d merely like to.)

If it’s becoming more common for dispensaries to accept credit card payments, that’s both good and bad for consumers. The good thing is the ability to pay as you prefer and allow you to walk into a dispensary without a bunch of cash in your wallet. On the other hand, using a credit card may lead consumers to spend more than they can afford, potentially accumulating credit card debt. Then again, all consumer goods pose that threat — the important thing is to spend within your means, whether you’re buying indoor gardening products or “Indoor Gardening Products.” What you put on your credit card doesn’t matter to your financial and credit stability, but how much you charge and how you manage that balance does.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Kids and Money

4 Important Lessons to Teach on Take Your Kids to Work Day

Girl on phone in medical lab office
Stanislas Merlin—Getty Images

On the fourth Thursday of April, working parents all across America take their children to work with them so they can see what Mom or Dad do for a living.

April 23, 2015 marks the 22nd year of ‘Take Our Daughters and Sons to Work’ Day.

Some companies have organized activities for their young visitors; others have little or no planning. Regardless of how things work at your office, you can use your workplace to teach kids about the value of money.

Of course, your lessons must be age-appropriate. It’s difficult, if not impossible, to teach your toddler about the stock market, and older children will be bored with simplistic discussions. With that in mind, here are a few ideas that can spur your thinking on appropriate lessons for your kids.

Salary – You can give younger children an analogy of worth and value by equating your work time to money and purchases. Give them a frame of reference by how much of your work time it takes to buy an ice cream cone or a bike.

Beware of two unintended consequences — make sure your children do not think that just because you work a certain amount of time they will get an ice cream cone or a bike, and make sure they understand that your salary is private. You do not want them relaying their newfound information to everybody they meet in the hallway or the elevator.

Profit – If you work in a manufacturing environment, you can show your children the products you make and talk about profit in general — how it takes money to make the products and how your company has to charge more to be able to pay employees and stay in business. Make the discussion age-appropriate and do not use actual company numbers unless you’ve cleared it with your manager (and even then, it’s not a good idea to be specific).

You can extend the profit discussion to retail jobs as well. It may be harder to illustrate in an office environment, but it’s not impossible to do so.

Sales – If you’re in a retail environment, you may be able to show your children how transactions take place. When ringing up a customer’s cash purchase, you can go over basic math skills with younger children by letting them “help” you make change and hand it out to the customer. You can engage your older children with discussions about credit cards and debit cards — how they work, what the difference is between the two, and pros and cons of each.

Taxes – If you can keep out your own biases (and we all have them), you can teach your kids about taxes. For example, in the retail environment, you can explain why the customer pays more than the price on the price tag because of taxes, where the tax money goes, and how it’s spent.

Take Our Daughters and Sons to Work Day isn’t for everybody. If your workplace is hostile to the idea, you don’t think you can pay sufficient attention to your child and still do your job, or you can’t keep them from disrupting the office, then don’t participate. A bad experience at the office is worse than no experience at the office.

However, you should spend extra time with your children later on and talk to them about what you do at work. You can use that time for teachable moments about money. They may not pay close attention or seem to appreciate the effort now, but as they grow up, you’re more likely to see the fruits of your efforts. Take the extra time to teach your kids about money, and they’ll reward you by staying out of trouble (and out of debt) with their good money-management habits.

MONEY credit cards

One Easy Way to Get 20% Off Your Uber Rides

Uber on mobile phone
Victor J. Blue—Bloomberg via Getty Images

A new promotion from CapitalOne and Uber could save certain cardholders big money.

CapitalOne cardholders, rejoice. Your Uber rides just got cheaper.

Starting April 21, the ridesharing giant is offering a 20% credit on all rides to CapitalOne customers who use a Quicksilver or QuicksilverOne credit card. Uber users simply need to add an eligible card to the app and select it as a payment option, and the credit will be applied on their statement automatically on every ride through April 30, 2016. Cardholders new to Uber can sign up anytime before June 30 with the code CAPITALONE and receive their first two rides (up to $30 each) free .

If you don’t already carry one of these cards and you use Uber often enough, it might make sense to apply.

Quicksilver, which was featured in the 2013 edition of MONEY’s Best Credit Cards, offers 1.5% cash back on anything you buy and a $100 bonus reward if you spend $500 in the first three months. There are more generous cash-back cards out there—the Chase Freedom card offers 5% cash back on certain categories of purchases and 1% back on everything else, and the Citi DoubleCash card gives 2% cash back on all items—but if you’re an avid Uber user, there are significant savings to be had with Quicksilver.

The same may not be true with QuickSilverOne. The card, which is targeted to buyers with “average” credit instead of the “excellent credit” the basic Quicksilver requires, offers no $100 bonus and charges an annual fee of $39. If you can’t qualify for the standard card and you’re using Uber often enough that the cash-back savings add up to a lot more than $40, then QuickSilverOne might still be for you. But Uber fans with good enough credit should stick with the Quicksilver.

 

MONEY identity theft

Why We Need to Kill the Social Security Number

Social Security card with no number
Getty Images

SSNs were never designed to be a secure key to all of our personal data.

While tax season is still producing eye twitches around the nation, it’s time to face the music about tax-related identity theft. Experts project the 2014 tax year will be a bad one. The Anthem breach alone exposed 80 million Social Security numbers, and then was quickly followed by the Premera breach that exposed yet another 11 million Americans’ SSNs. The question now: Why are we still using Social Security numbers to identify taxpayers?

From April 2011 through the fourth quarter of 2014, the IRS stopped 19 million suspicious tax returns and protected more than $63 billion in fraudulent refunds. Still, $5.8 billion in tax refunds were paid out to fraudsters. That is the equivalent of Chad’s national GDP, and it’s expected to get worse. How much worse? In 2012, the Treasury Inspector General for Tax Administration projected that fraudsters would net $26 billion into 2017.

While e-filing and a lackluster IRS fraud screening process are the openings that thieves exploited, and continue to exploit, the IRS has improved its thief-nabbing game. It now catches a lot more fraud before the fact. This is so much the case that many fraudsters migrated to state taxes this most recent filing season because they stood a better chance of slipping fraudulent returns through undetected. Intuit even had to temporarily shut down e-filing in several states earlier this year for this reason. While the above issues are both real and really difficult to solve, the IRS would have fewer tax fraud problems if it kicked its addiction to Social Security numbers and found a new way for taxpayers to identify themselves.

Naysayers will point to the need for better data practices. Tax-related fraud wouldn’t be a problem either if our data were more secure. Certainly this is true. But given the non-stop parade of mega-breaches, it also seems reasonable to say that ship has sailed. No one’s data is safe.

Identity thieves are so successful when it comes to stealing tax refunds (and all stripe of unclaimed cash and credit) because stolen Social Security numbers are so plentiful. Whether they are purchased on the dark web where the quarry of many a data breach is sold to all-comers or they are phished by clever email scams doesn’t really matter.

In a widely publicized 2009 study, researchers from Carnegie Mellon had an astonishingly high success rate in figuring out the first five digits for Social Security numbers, especially ones assigned after 1988, when they applied an algorithm to names from the Death Master File. (The Social Security Administration changed the way they assigned SSNs in 2011.) In smaller states where patterns were easier to discern the success rate was astonishing — 90% in Vermont. Why? Because SSNs were not designed to be secure identifiers.

That’s right: Social Security numbers were not intended for identification. They were made to track how much money people made to figure out benefit levels. That’s it. Before 1972, the cards issued by the Social Security Administration even said, “For Social Security purposes. Not for Identification.” The numbers only started being used for identification in the 1960s when the first big computers made that doable. They were first used to identify federal employees in 1961, and then a year later the IRS adopted the method. Banks and other institutions followed suit. And the rest is history.

In fact, according to a Javelin Research study last year, 80% of the top 25 banks and 96% of the top credit card issuers provide account access to a person if they give the correct Social Security number.

There are moves to fix related fraud problems elsewhere in the world, in particular India where, in 2010, there was an attempt to get all 1.2 billion of that nation’s citizens to use biometrics as a form of identification. The program was designed to reduce welfare fraud, and according to Marketwatch, 160 similar biometric ID programs have been instituted in other developing nations.

In 2011, President Obama initiated the National Strategy for Trusted Identities in Cyberspace, a program that partnered with private sector players to create an online user authentication system that would become an Internet ID that people could use to perform multiple tasks and aid interactions with the federal and state governments. There may be a solution there — but not yet.

The first Social Security card was designed in 1936 by Frederick Happel. He got $60 for it. It was good enough for what it had to do (and was clear that the card wasn’t a valid form of identification). That is no longer the case. That card is nowhere near good enough. Perhaps one solution is a new card design — one with chip-and-PIN technology. Just how something like that might work — i.e., where readers would be located, who would store the information & support authentication, etc. — would have to be a discussion for another day.

The point is, we need to do something.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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3 Things Millennials Need to Know When Choosing a Credit Card

hand choosing credit cards from a fan of cards
David Malan—Getty Images

Here's what young adults should consider when they finally bite the bullet and sign up for a credit card.

Today’s young professionals have a complicated relationship with credit. A report last year found that more than three in five millennials did not own a credit card, while another survey, by Creditcards.com, found that 36% of 18-to-29 year olds have never had one.

Millennials, of course, had the distinct misfortune of entering the job market during the greatest recession in generations, which may have made the prospect of borrowing less appealing, says Creditcards.com senior industry analyst Matt Schulz. Unemployment can make the task of paying off your monthly bill rather onerous.

Nevertheless, those in Gen Y who eschew plastic endure real costs that can make borrowing later in life that much more difficult. “Credit scoring models look at the age of your credit history,” says Credit.com’s Gerri Detweiler. “Specifically they take into account the age of your oldest account, and the average age of all of your accounts.” The earlier you start, the better your score will be. And a higher credit score can save you thousands over the course of your life.

If you’re ready to take the plunge, here are three things to consider when you pick and use your plastic. (These are also good reminders for those who already carry a card.) Remember, credit cards are tools and can dramatically improve your bottom line when used correctly.

1. Make sure you reap the credit

One chief benefit of receiving a card is proving to the world that you can be responsible with credit. However, if your lender doesn’t actually report your pristine credit behavior to a credit bureau, you won’t get the benefit of a higher score. “Ensure that your card reports account activity to the three major credit bureaus—which it should if it’s issued by a major bank and is a Visa, Mastercard, or American Express card—so that this first card can help build a credit history,” says Ben Woolsey of CreditCardForum.com. You can confirm this with your lender before you sign up for the card.

2. Skip the annual fee

“Get a credit card with no annual fee, since the first card you will get will be the card you keep the rest of your life to maintain a long credit history,” says Nerdwallet.com’s Kevin Yuann. The point here is that you don’t want to be penalized for establishing credit. But when you finally get that more elite card, don’t get rid of the original. “As you start to qualify for better rewards, keep a phone bill or something recurring on automatic payment on this card to ensure it doesn’t get canceled,” Yuann advises.

3. Pay your bill

“Many millennials incorrectly focus on the potential interest rate when shopping for their first card,” says CreditSesame.com’s John Ulzheimer. “This underscores a larger problem, which is that they are thinking about the cost of carrying a balance before they’ve even used their first card.”

Instead Ulzheimer recommends you consider other factors, like potential credit limit. (Aim to spend roughly 10%-20% of your monthly limit in order to optimize your score, which is a bit easier with a higher limit.) “Using the card only to the extent that they can pay off the balance in full each month makes the interest rate irrelevant.”

Still, credit cards are useful in cases of emergency, and sometimes you may find yourself with a revolving balance. That shouldn’t stop you from contributing something to your debt, says LowCards.com’s Bill Hardekopf. “Even if you can’t pay off the entire balance, it is critical to make the payment on time every single month. If not, this will significantly damage your credit score. That is something that will haunt you on future loans,” such as for a car or house.

Need help figuring out which card is right for you? Check out MONEY’s credit card matchmaker tool.

Read next: MONEY’s Best Credit Cards

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