Freezing or Monitoring Credit: Which is Better?

Posted by: Sophie H. | Dec 21,2007

Which is better: freezing or monitoring credit?  With all the daunting news about identity theft, people want to take all the precautions they can to ward against fraud.  One of these methods is freezing your credit.  It locks your credit accounts so no one can use them.  Unfortunately, this includes yourself – but as a way to also stem the tide of unnecessary spending, this is a potential solution.  

Freezing credit can be costly.  You’ll need to shell out $30 to each of the credit bureaus in order to freeze your accounts.  When you want to open them up again, that’s another $30 each.  If you have three credit cards, you’re looking at some pretty hefty fees.

The alternative is a credit monitoring service.  These services will keep tabs on your credit accounts and alert you if there is any suspicious activity.  Of course, this isn’t cheap either.  A credit monitoring service will be at least $15 a month.  I think $180 a year isn’t all that much to ask for something that could potentially save you thousands of dollars, not to mention the time it takes to monitor credit card bills and credit reports yourself.  

Retirees could potentially benefit from freezing credit more than other cardholders because retirees may not need to apply for any new loans or credit cards.  Every time you want to apply for a new loan, you’ll have to unfreeze your accounts, costing you $30 per bureau.  Retirees, on the whole, are less financially active than younger people so it’s a better potential solution.  However, this depends on the retiree and how much he or she needs to access credit.  

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