Things to take care of during online banking

The advent of internet has made online banking very popular from the last decade. It has made our banking easy and convenient. But as you are handling it via your computer and not in person, you have to be careful.

Firstly it is very essential to have a well-guarded password because it is the gateway to your online bank account. Do not use your personal details like names or birthdays. Try to create a long password with a blend of various letters and numbers jumbled together. It is advisable to change the password after every 2-3 months.

Do not submit your account, PIN or credit card numbers to suspicious emails that do not address you by your name. They might be some illegitimate fraud sites trying to steal your balance. In case, you have submitted it, always inform your bank to get consequent protection. Install high quality anti-virus measures to protect your computer to prevent hacking. Before installing it, it is wiser to consult a software expert.

About Cross-collateralization

Collateral refers to the security pledged for the repayment of a loan. And when this collateral for a particular can be applied as collateral to secure another loan, it is called cross-collateralization. You can use any of your assets as collateral, if it has a monetary value.

But the loans must be issued from the same bank. For example, if you have taken a home loan and a car loan from the same bank, the car (after paying off the car loan) is used by the bank for the security of home loans. In this case, if you plan to sell your car, the bank may go against it. Cross-collateralization cannot be made if you do not have outstanding loans.

Cross-collateralization can also be applied if a person has a loan and also a checking deposit account at one bank. If you cannot repay your loan, the bank will either withdraw your fund from your checking account or freeze your account until you the repayment.

Bond ETFs and its advantages

The Bond ETF is a type of Exchange Traded Fund. Here the investment is made in bonds (like government treasury bonds) withdrawing the money from the shares, especially in times of recession.

Price transparency and liquidity are two most important advantages of Bond ETFs. The historical or current prices of the Bond ETFs are accessible by any investor. Investing in bond ETFs are much cheaper and easier than the bond mutual funds. You can have access to a number of bonds by putting up just $5-$10,000. In Bond ETFs there is a diversified portfolio including government, corporate, municipal, real return, short, medium or long maturity and also international types. Thus, you get a lot of options for investments.

The greatest merit of the Bond ETFs is that it offers protection from continuous change of interest rates. Thus they involve lesser risk. The holders of Bond ETFs get both monthly dividends (in cases of bond interests) and also annual ones on the capital gains.

Credit card risk management

When the credit card issuing merchants have to deal with disputes initiated by their unsatisfied customers, it is termed as credit card risk. These disputes are also called “charge backs”. The customers either complain of false charges or misuse of their credit cards illegally by someone else.

Thus the card issuers need to apply the credit card risk management for protection against the possible losses. If a customer fails to repay his debts consistently for a certain period of credit limit, then the issuers would first reject all his transactions. Then their credit usage might also be frozen. It would help to prevent the over-flowing debts.

Credit card frauds are commonplace and in turn have increased the risks. It is the duty of card holders to inform the bank in case their cards are stolen. The bank must immediately block the card to prevent misuse. While accepting the card, it is wiser to verify its safety features and also tallying the signatures.