Millions of credit and debit card users may have had their secure information stolen in the security breach at Target during the busiest shopping time of the year. It’s still unclear how much damage was done, but it was a pretty sharp wake-up call: even “secure” purchases may not be as safe as we thought.
As precious metals investors, you are likely already interested in maximizing your investments by protecting your wealth with a diversified savings plan. But there are pros and cons to every method of payment, too.
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Pros
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Cons
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Cash
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- portable
- accepted everywhere
- easy for most transactions
- transferable
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- no protection if stolen
- can be difficult to manage large purchases
- no online or over the phone shopping opportunities
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Checks
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- fairly secure
- easily transferable
- portable
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- can be compromised by “checkwashing”
- not accepted by all vendors
- have to buy more checks as you run out
- no longer a common way of making purchases
- few online or over the phone shopping opportunities (Provident Metals is one of the few online vendors to accept checks as payment)
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Debit Cards
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- fairly secure
- portable
- most can be used for online and over the phone shopping
- only accesses money you actually have in your account, protecting you from overspending
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- if your PIN number is stolen, there are no protections on your money; card may be difficult to cancel
- cannot be used in the event of a power outage
- some banks have hefty overdraft fees
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Credit Cards
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- widely accepted
- portable
- can be used in case of a cash shortfall in emergencies
- purchases can be refuted with the card vendor, protecting consumers from fraudulent purchases
- easy way to make online or over the phone purchases
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- certain brands of cards may not be accepted by all vendors
- cannot be used in the event of a power outage
- can carry a high interest rate, making it difficult to get out of debt
- if information is stolen, it can be difficult to stop the charges
- can lead to purchases you cannot afford
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Online Currencies
(eg. Bitcoin)
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- peer-to-peer transactions are nearly instantaneous
- considered highly secure
- no physical currency
- may be safe in the event of a breakdown of the financial system
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- can be difficult to learn how to use it/access it
- unregulated market is prone to wild swings
- no protection in the event of theft
- few vendors accept it as payment
- no physical currency; some holders have accidentally thrown away their Bitcoins
- upcoming legislation may hamper the growth and use of Bitcoin
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Precious Metals
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- intrinsic value all around the world
- protects your wealth in the event of inflation
- beautiful designs and collectibles
- may be used in an emergency
- high value in a small size
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- difficult or impossible to make instant purchases, in person, over the phone, or online
- general public is uninformed on the market
- must be protected in a secure location; no safeguards in the event of theft
- must be purchased from trusted vendors to protect against counterfeits
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It’s important to consider what is important to you and appropriate to the situation. Take measures, like strong passwords, clever PIN numbers, and physical safes, to keep your money (and identity) safe against many threats.
Has the Target security breach changed your shopping habits? What method of payment do you prefer most of the time?
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