When you think about the words "danger" and "credit card," the first thing to pop into your head is probably debt. The over-your-head kind of debt that can happen when you're not paying attention to how much you're spending.
Here are a few other dangerous things you might be tempted to do with a credit card:
1. Give it to your kidThe inherent danger involved with giving your offspring a credit card is nothing new to parents. But the Credit CARD Act has created some new situations to think about.
The law prohibits card issuers from giving credit cards to anyone under 21 unless that individual has proof of enough income to pay off debt. As a result, some parents are co-signing on cards for their under-21 kids or adding their kids as authorized users on their own credit cards.
Make sure you monitor credit card purchases, just in case that plan isn't being followed.
2. Give it to an employee or contractorOne of the most-famous examples of this situation involves Kim Kardashian. She was hired as a "consultant" for R&B singer Brandy Norwood. Kardashian claimed that Norwood's mom gave her a credit card to make purchases and allegedly went on a shopping spree with her client's credit card. The damage? $120,635.82.
If you run a business and you need to give a credit card to an employee or contractor, choose a card that allows you to set spending limits. Another option on the horizon is MasterCard's inControl, which lets you set a limit on your card. When a cardholder reaches the limit, the card is rejected. But the best step is to monitor your credit card statements and know what your balances are.
3. Use it on a website that's not encryptedYou must make sure you're on a secure, encrypted website before you key in your credit card number. Secure websites have encryption software designed to prevent identity theft.
When you're on a secure website, you'll see a lock icon in your browser's address bar and "https" in the URL. Note the "s" at the end of "http."