Your Guide To Credit Card Security

Credit card fraud is a big problem. 46% of Americans have been victims of fraud in the last five years and the credit card companies are working hard on improving credit card security.

It’s not all in their hands, though. You have a role to play in credit card safety as well. Let’s look at some of the steps the card companies are taking as well as what you can do to keep your cards safe.

Who Suffers from Credit Card Fraud?

Most credit cards have zero liability protection against fraudulent use. And even if your card doesn’t offer zero liability insurance, some laws limit your exposure if your card is used without your permission.

So given that you’re not on the hook for fraudulent use of your card, does it really affect you?

Yes, it does. It may not cost you if you’re not responsible for the fraudulent charges but the credit card companies aren’t going to take those losses sitting down. You can bet that you’ll be paying higher interest rates and more fees to make up for those losses.

Credit card fraud can also be one piece of the identity theft puzzle. If your card information gets stolen, you could be at risk of having your identity stolen. That will cause a lot more problems than some unapproved charges on your credit card.

What Are the Credit Card Companies Doing to Keep My Card Secure?

The credit card companies have put several measures in place over the last few years, including:

  • Advanced fraud monitoring
  • Chip cards (EMV)
  • Virtual credit card numbers

Advanced Fraud Monitoring

Machine learning and artificial intelligence are improving and the credit card companies are using this technology to improve their fraud monitoring. Any unusual activity on your cards can be identified almost immediately so they can either put a hold on your card or even check with you almost in real-time to see if the purchase was legitimate.

Many card companies offer texting services that will send you a text when an unusual transaction shows up on your card. You can respond by text to let them know if it was you making the purchase.

The card companies have been able to identify obvious red flags, like transactions happening on the other side of the world, for years but now they can get a lot more granular in what raises a flag. Something as simple as a large purchase or two purchases in a short period may be noticed now.

Chip Cards

Chip cards, or EMV (Europay, Mastercard, Visa) cards, have been in use around the world for several years but are only now becoming common in the US. These cards have a chip that encrypts your account information differently every time you use it.

This is much more secure than the traditional magnetic stripe, which holds static information that is much easier for fraudsters to duplicate. Chip card can use chip-and-signature or chip-and-PIN authorization. A PIN is more secure than a signature since it is not easily forged.

Further explanation of how this chip technology works will help you understand its added security features.

Virtual Credit Card Numbers

Virtual card numbers are another way the credit card companies are protecting your information. These are temporary card numbers that get generated when needed, then disabled so they can’t be re-used.

Virtual card numbers work well for online or telephone purchases where you are giving your card number to someone remotely. You never know who you’re speaking to or what else they might do with your information. Using a number that won’t work after that transaction is complete stops them from using your information after the fact.

Apple Pay and Android Pay also take advantage of these virtual/temporary credit card numbers. Every time you buy something with either of those services, a unique number gets created for that specific transaction. The merchant never gets your actual card number so they have no way of using it fraudulently.

How You Can Protect Your Credit Card Information

Even with all the high-tech security the credit card companies offer, there are still some things you can do yourself to help protect your card information. First, make sure you know what security features your card has. Read up on the features on your card company’s website or call them and ask about the card security. Knowing how you’re covered is half the battle.

Always double-check your statements for any unrecognized charges. If someone has stolen your card information, they’ll often make small, innocent purchases to test the card. Don’t expect all fraud to be hundreds or thousands of dollars.

Review your credit report regularly, at least once a year. While this doesn’t help you protect your credit cards, it’s a piece of the puzzle. If someone steals your credit card details, it can be one step in identity theft. Checking your credit report can bring other things to light. You can get a free copy of your report from AnnualCreditReport.com.

Do You Know Who’s Watching?

Never send your credit card details, or any other private information, over an unsecured WiFi network such as your local library or coffee shop. WiFi is not very secure and any hacker with even limited skills will be able to intercept anything you send. Either use a VPN service to secure your connection or wait until you’re back on a trusted network.

Along the same lines, never send your credit card information by email. Email isn’t encrypted in any way so whatever you send can be read by anyone who can access the message. That could be a hacker that intercepts the message somehow or someone on the receiving end that you didn’t realize would be able to see the information.

Credit Card Security is Everyone’s Responsibility

The credit card companies have made a lot of progress in improving credit card security. As technology gets better and better, they’re finding new ways to keep you safe. But at the end of the day, they’re looking out for themselves. As long as they’re liable for fraud, not you, they’ll continue to work hard to stop it.

But you need to be just as vigilant yourself. If the rules change and the card companies aren’t on the hook for fraud, they might not be as quick to adopt these tools. And even if that doesn’t happen, protecting your credit card information is one step in protecting your identity. And that’s something that worth the effort.

Check back often for more helpful posts like this.

Share this post: