TIME Retail

Target CEO Resigns Amid Fallout From Data Breach

Gregg Steinhafel holds himself "personally accountable" for the massive breach last year that exposed tens of millions of credit cards, but Target's board credited him with steering the retail giant through the crisis and said he'll remain in an advisory role during the transition

Target president and CEO Gregg Steinhafel will step down, the retail giant said Monday, five months a massive data breach over the holidays compromised the credit card information of more than 40 million customers.

Target said that Steinhafel held himself “personally accountable” for the 2013 data breach, but “pledged that Target would emerge a better company.”

“We are grateful to him for his tireless leadership and will always consider him a member of the Target family,” the company’s board of directors said in a statement.

Chief financial officer John Mulligan will serve as interim president and CEO, while Roxanne S. Austin, who currently serves on the board of directors, will be the interim non-executive chair of the board. Steinhafel will stay on in an advisory capacity during the transition.

The shakeup comes just weeks after Target acknowledged that its computers alerted them to the data breach, but that company officials ignored warnings of suspicious activity.

MONEY Kids and Money

4 Ways to Lighten Your Kid’s Debt Load

Converse sneaker ball and chain
The typical 25- to 29-year-old has more than $35,000 in debts. Michael Crichton + Leigh MacMill&

Many young adults are struggling to keep up with student loans, credit-card balances, and car payments. Here's how you can help.

No Mom or Dad wants their adult children to view them as a walking ATM. Still, when they’re struggling financially, what are you going to do?

One thing’s for sure: A lot of them do need help. The typical 25- to 29-year-old owes more than $35,000, according to a recent study from PNC Financial Services—and only about 40% of them say their debts include student loans. No wonder that between credit card balances, car payments, and other bills, 78% of the millennials with debt reported in a new Ameriprise survey that they feel woefully overextended.

If your child is one of them, of course you want to help. These steps will let you do that—without undermining his autonomy or risking your own financial security.

Offer Advice, Not Cash

Resist the impulse to provide a handout, at least initially. After all, you probably need the money for retirement. Plus, you’ll lose a teachable moment. “Bailing your kids out doesn’t help them learn fiscal responsibility,” says financial adviser Deena Katz, an associate professor of personal financial planning at Texas Tech University.

Instead, she suggests, offer to review your child’s expenses and identify ways to free up cash to help with debt payments. Junior isn’t eager to share details about his money with Mom and Dad? Encourage him to use sites such as youneedabudget.com to create a workable plan. Or offer to pay for a year of budgeting help from a professional adviser at a financial planning site such as LearnVest.com ($89 setup, $19.99 a month).

Tackle the Plastic

Twentysomethings often pay lofty credit card rates of 22% or higher owing to their meager credit history and low credit scores (average for millennials: 628). Suggest your child call her issuer and ask for a lower rate, pointing out—if true—her history of on-time payments. “If the provider doesn’t budge, use Bankrate.com or CreditCards.com to shop for a lower-rate card to transfer the balance,” says Beth Kobliner, author of Get a Financial Life: Personal Finance in Your Twenties and Thirties.

Another option, says Gerri Detweiler, director of consumer education for credit.com: Take out a lower-rate loan to pay off the balance. At peer-to-peer lending sites Prosper.com or Lendingclub.com, a millennial might nab a 12.5% rate from investors.

Wrestle Down School Loans

Also help your child explore ways to lower the monthly bill for college debt, such as income-based repayment plans for federal loans. Instead of the standard 10-year payback term, monthly payments under this program are capped at 10% or 15% of the borrower’s discretionary income, depending on when they took out the loans.

The downside is that your kid may rack up more interest over a longer payback period. Any balance remaining will be forgiven after 20 or 25 years of consecutive payments, though taxes will be due on the amount. Have a kid who’s a teacher, works for Uncle Sam, or has another public-service job? He may qualify for loan forgiveness after 10 years with no taxes due. (Get details from the Department of Education here.)

For private student debt, your child may be able to get a lower-rate refi or consolidation loan through another lender or credit union, says Detweiler. Check out student loan comparison shopping sites such as Simpletuition.com and Overturecorp.com for sample offers.

Provide Temporary Refuge

If your child is in too deep for these strategies to work, go bigger. Maybe you suggest your child move home for a bit and direct “rent” toward loan repayment. Or, if you can really afford it, you might pay off her credit card debt—but be clear this is a one-time-only gesture.

Just remember: “Financial help between parents and adult kids is fraught with emotion for both of you,” says Olivia Mellan, a Washington, D.C., therapist who specializes in money issues. Helping your adult children doesn’t give you permission to meddle in their lives, says Mellan, and don’t be surprised if they don’t act grateful. In other words, nothing’s really changed from when they actually were kids.

 

More on Financial Independence

7 Ways to Get Your Kid Out of Your Basement

Is Living with Mom and Dad Starting to Cramp Your Style? Take These Steps to Independence

Taking Five Years to Earn a B.A. is Common—And Costly. Here’s How To Get Out in Four

TIME Security

LaCie Joins Ranks of Hacker-Breached Companies, Says Credit Card Info Possibly Stolen

The France-based storage manufacturer says its website may have been compromised for the better part of a year.

I’ve always thought of LaCie as more of a boutique storage-maker, the sort of outfit you’ll pay a little more to get something in orange, because hard drives always look better in orange.

The company sells storage devices with names like Blade Runner and Quadra and Porsche. I have one of the latter sitting on my desk right now, an aluminum brushed-nickel-finish brick with the company logo — all caps, the “C” bigger still — grandiloquently etched into the side. LaCie even sells a one-terabyte thingamajig audaciously dubbed the Christofle Sphère (Christofle being the French designer’s name, Sphère apparently being the French word for something that looks like it’d be right at home in Miss Cleo’s parlor) that’ll set you back $500. For one terabyte.

Now it seems the company has been hacked, or at least it’s pretty sure that’s the case. It’s put up an “incident notification” explaining that the FBI told it evidence has been found that someone used malware to breach its website and potentially accessed transactions occurring between March 27, 2013 and March 10, 2014. That’s no typo: the company’s basically admitting its site may have been exposed for the better part of a year, and during that year, the ne’er-do-wells may have accessed names, addresses, email addresses, account usernames and passwords, as well as credit card numbers and expiration dates.

It’s ultimately bad news for Seagate, a hard drive maker U.S. buyers are probably more familiar with: Seagate announced plans to snap up LaCie in May 2012, and the acquisition was completed in August 2012.

It’s also bad news for LaCie’s reputation as a purveyor of security wares. The company makes something called “Private-Public,” for instance, a Mac/PC-based encryption tool it markets to customers looking to encrypt files (documents, personal photos, passwords, etc.) on mobile devices. The breach didn’t involve access to the software, as far as anyone knows, but the last thing you want, obviously, is an albatross like this when you’re trying to present yourself as a credible security firm.

If you have a LaCie web account, the company has a “what you can do” to protect yourself FAQ (while it conducts a forensic digital analysis) here.

TIME Companies

Bank of America Inks $772 Million Settlement For Credit Card Practices

A man walks past a Bank of America ATM in Charlotte, N.C., May 8, 2013.
A man walks past a Bank of America ATM in Charlotte, N.C., May 8, 2013. Davis Turner—Bloomberg/Getty Images

Bank of America is paying $772 million in refunds and fines to settle accusations that it illegally deceived 2.9 million customers into purchasing additional credit card services between 2000 and 2012

Bank of America is paying $772 million in refunds and fines to settle accusations by the government that it illegally deceived 2.9 million customers into purchasing additional credit card services, regulators said Wednesday.

The deal, announced by the Consumer Financial Protection Bureau and the U.S. Office of the Comptroller of the Currency, is the largest refund ever ordered by the three-year-old CFPB, as well as the largest settlement over credit-card add-ons won by the federal government, the Associated Press reports.

“Bank of America both deceived consumers and unfairly billed consumers for services not performed,” CFPB director Richard Cordray said. “We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”

Bank of America has not admitted to or denied the accusations, but a statement from the bank said it had already ceased offering the products in question and refunded “the majority” of affected customers.

The feds claim that from 2000 to 2011, the Charlotte, N.C.-based bank billed 1.5 million customers a total of $459 million for various identity-protection products without the proper authorization. From 2010 to 2012, the bureau says Bank of America also exaggerated or misstated the benefits of two credit-protection programs that allowed some customers to cancel credit-card debt in instances of unemployment or other hardships, allegedly misleading another 1.4 million customers into paying $268 million.

In addition to those refunds, Bank of America will pay $20 million and $25 million in civil penalties to the CFPB and the office of the Comptroller of the Currency, respectively.

TIME

These Credit Cards Are Desperate to Give You $400

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Adam Gault—Getty Images/OJO Images RF

Thanks healthier economy

If you’re good with your finances, credit card companies are literally throwing money at you to get you to become a customer. Issuers are laying their cards on the table with bonus offers of up to $400, trying to seize the momentum of a rebounding economy.

“You have a slugfest among the big guys over those people who pay their bill in full every month,” says David Robertson, publisher of the credit card industry newsletter The Nilson Report. He also says banks are willing to take a little more risk with customers who may have had years or even decades of sterling credit before the recession. “This was a person who was good as gold a decade ago, and the recession shot them off their horse, so to speak,” he says. For banks, these customers are starting to look attractive again.

“The Great Recession is the driving force behind the emergence and staying power of lucrative credit card initial bonuses,” says Odysseas Papadimitriou, CEO of Evolution Finance, parent company of personal finance sites CardHub.com and WalletHub.com.

So which issuers are dangling the biggest carrots?

“If you aren’t a frequent traveler and you’re just looking for some extra cash to pay off everyday expenses, the Chase Sapphire Preferred card is the way to go,” says John Kiernan, senior analyst at Evolution Finance. “It offers 40,000 bonus points redeemable for a $400 statement credit, in return for new cardholders spending at least $3,000 during the first three months,” he says. Cardholders can boost the value of that pool of points up to $500 — but there’s a catch: The higher value only applies if you use the points for air or hotel redemptions made through Chase’s Ultimate Rewards program. There’s also a fairly steep annual fee of $149, although it’s waived for the first year.

“Another great offer is the Barclaycard Arrival,” says Credit.com credit card expert Jason Steele. This card will be most appealing to frequent travelers or people looking to take a vacation, since its $400 bonus (issued as 40,000 reward miles) has to be redeemed as a statement credit towards travel-related charges. As with the Chase Sapphire Preferred, you also have to spend $3,000 in the first 90 days after opening the account, and after the first year, there’s an $89 annual fee.

But even if you don’t charge a lot from month to month or don’t want to pay an annual fee, you can still find signup bonuses for new cards, says Amber Stubbs, managing editor at CardRatings.com.

“The standard seems to be $100 bonus cash back right now and you can get that with the Chase Freedom, Citi Dividend Platinum Select or the Capital One Quicksilver Cash Rewards card, to name a few,” she says. No, it’s a far cry from $400, but here’s the good part: None of these have an annual fee, and you only have to spend $500 in three months — rather than $3,000 — to get the bonus.

“I like Quicksilver’s ongoing rewards program better because you earn a straight 1.5% cash back on all purchases, so no need to worry about rotating bonus categories or caps,” Stubbs says.

The Discover It card, which also has no annual fee, is being promoted on some third-party credit card sites with a $150 cash back bonus for users who spend $750 in the first three months. “I’m sure Discover is trying to make that card stand out,” says Bill Hardekopf, CEO of LowCards.com. “It does have the leading cash back — not points — bonus at the moment,” he says, although the spending threshold is $250 higher than its competitors.

These “free money” offers might sound great, but the experts say before you rush out to sign up for a new credit cards, there are some things to keep in mind.

If you plan to revolve a balance, you should look for the card with the lowest APR rather than chasing bonuses — the amount you’ll pay in interest charges will outstrip the value of any rewards you earn, since APRs tend to be higher on rewards cards.

And while customers with less-than-perfect credit are being courted by banks again, people with the best credit are still the biggest catch. “Given that such people safely navigated the housing market collapse and resulting struggles, they likely possess solid financial values,” Papadimitriou says. If your credit is blemished, you’ll only damage it further by applying and getting rejected.

“It’s important for consumers to think beyond the introductory offer and find the card that offers the most value for the long run,” Stubbs says.

TIME credit cards

PayPal President Gets His Credit Card Hacked

David Marcus, president of PayPal, had his credit card information stolen while in the United Kingdom.
David Marcus, president of PayPal, had his credit card information stolen while in the United Kingdom. Simon Dawson—Bloomberg/Getty Images

PayPal President David Marcus has been the victim of credit card fraud, he said on Monday. The leader of the online payments company revealed via Twitter that his credit card information had been stolen on a trip to the United Kingdom and he’d racked up a “ton” of fraudulent transactions on his account. Marcus speculated that thieves probably skimmed the info from the magnetic stripe on his card, even though his card had an EMV chip, a technology that makes cards in Europe more secure than the ones commonly used in the U.S.

Marcus leveraged the incident as an opportunity to plug his own company, speculating that the fraud wouldn’t have happened if only the merchant had accepted PayPal. His company is currently trying to expand its presence as a payment option in physical stores, putting it in direct competition with platforms like Square and Google Wallet.

TIME Retail

Target Hackers Accessed Card Data Through a Vendor

A Target Store Ahead Of U.S. Personal Consumption Figures
Victor J. Blue / Bloomberg via Getty Images

The retailer says the thieves stole credentials from a vendor that allowed them to pinch 40 million credit card numbers

Target said Wednesday the hackers that broke into its system and stole millions of customer credit numbers got access to the data by first stealing credentials from a vendor.

A Target spokesperson said the thieves gained access to 40 million credit card numbers and the personal information of 70 million more people by lifting vendor credentials that gave them access to Target systems.

Target says it has taken special precautions since the breach became public on December 15 and that is working with the Secret Service and the Justice Department to resolve the situation.

[AP]

MONEY credit cards

Best Credit Cards

Get a better deal from your plastic with these top 15 credit card picks for rewards junkies, balance carriers, frequent travelers, college students, and small business owners. What's the best card for you? MONEY and NerdWallet teamed up to find it.

140601_EM_CreditCard_LeadImage_1
Steven Puetzer—Getty Images

Originally published in the October 2013 issue of Money magazine.

  • Borrowing

    140601_EM_CreditCard_Borrowing_1
    Cultura/Frank van Delft—Getty Images

    It’s more expensive to carry a balance, with annual percentage rates on new cards averaging 15.31%, up from 14.30% in 2010, according to Bankrate. On the plus side, 0% intro periods have gotten longer, going from eight to 11 months on average over the same time, NerdWallet reports.

    You can save hundreds — even thousands — by transferring a debt and paying it off within the interest-free window. Or you can take advantage of the 0% trend to pay for a big-ticket purchase over time, at no cost.

    BEST FOR BALANCE TRANSFER

    Chase Slate (chase.com)
    APR: 13% to 23%
    Intro APR: 0% on purchases and balance transfers for 15 months
    Annual fee: $0
    Balance transfer fee: $0 if you transfer in the first two months, 3% after that

    Why it’s a winner: Longest 0% period among balance-transfer cards that also have no annual fee and, more important, no balance-transfer fee (a charge that can undercut the benefits of changing cards).

    The caveats: You have to act fast to move the balance or you’ll pay a fee of 3% on the amount you shift over. Also, while Slate offers 0% on new purchases as well, you can get a longer term with Citi Simplicity (below).

    LOWEST ANNUAL PERCENTAGE RATE

    Lake Michigan Credit Union Prime Platinum Visa (lmcu.org)
    APR: 6.25% and up
    Annual fee: $0

    Why it’s a winner: Ideal for those who regularly carry a balance, since it offers the lowest possible APR among no-fee cards (6.25% for applicants with FICO scores of 760-plus).

    The caveats: You have to be a member of the credit union, but you can join with a $5 donation. Not for those who pay in full, since this is a no-frills card.

    BEST 0% DEAL ON NEW PURCHASES

    Citi Simplicity (citi.com)
    Intro APR: 0% on purchases and balance transfers for 18 months
    Regular APR: 13% to 22%
    Annual fee: $0

    Why it’s a winner: Longest 0% introductory period on new purchases among cards that have no annual fee — so it can be a great way to finance, say, your new kitchen appliances. Plus, it has no late fees and no penalty rates, ever.

    The caveat: Not a great deal for balance transfers. Though it offers 0% for 18 months, you’ll foot a 3% fee.

MONEY retirement planning

Danger of retiring with credit card debt

Take steps to eliminate high-cost debt before you retire. (C) 2007 Thinkstock

This story is part of Money magazine’s special Dream big, act now: Six secrets of retirement, which lays out the key drivers of retirement happiness — including your investments, health, career, family, midlife changes and debt — and what you can do about them.

PART 6: DEBT

The secret: Burn the credit card, not the mortgage.

Even longtime savers sometimes retire in the red, perhaps after getting pinched by a job loss or a health problem.

An Ameriprise survey of older workers with at least $100,000 in assets found that 22% weren’t on track to pay off their credit cards by retirement.

High-cost debt is especially dangerous in retirement because you are likely to see your income go down, and if you draw heavily on your nest egg to keep up with payments, you’re more vulnerable to outliving your money.

Well before 65, have a plan to wind down those obligations.

TAKE ACTION

Paying off pricey debt is the only good reason to save less. Just make sure to put away enough to get any employer match.

Use these rules of thumb for college debt. It’s tempting to take big loans to pay for a kid’s dream school. Have your child look into Stafford loans first (borrowing over four years no more than his projected first-year salary), and then consider Parent Plus loans or co-signing on a private loan.

The rules: Don’t borrow more for all of your children than your annual salary. And be sure you can pay it off in 10 years or by the time you retire, whichever is first, says Mark Kantrowitz of FinAid.org.

There’s less rush to pay off a mortgage. With today’s rates and favorable tax treatment of mortgage interest, you may be paying less than 4%. Eliminating the mortgage can make sense, since it lowers your expenses.

If you can afford the payments, however, you can hang on to the loan to leave more of your money in a diversified portfolio, says Kimberly Foss of Empyrion Wealth Management.

If most of your assets are in a tax-deferred account, then by not cashing out, you’re also deferring taxes as your investments continue to grow.

More secrets to a dream retirement:

Investing

Health

Career

Family

Midlife changes

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