credit card security – Cyber Security Insider Secrets

Yesterday, I wrote about the new chip cards and the fact that, while providing some protection against fraud when used with the PIN, they will not stop credit card fraud.

Today, I wanted to follow up with some practical tips you can use to limit your risks related to credit card fraud.

1. Check your account balances regularly. Report any errors immediately.

2. Have more than one card. Keep an extra card as a spare. Don’t use the extra card, except perhaps on rare occasion to keep it active. If the credit card you normally use at the retail store gets blocked because there was a breach at one of the stores where you use it, you have another card available to use.

This is especially important if you are traveling. Imagine you are in another state and about to pay for your hotel bill, or a meal. Your card is declined. You discover that there was a breach at one of the stores you use it at back home. They are sending you a new card which you will receive within 10 days. But, what do you do now? You are stranded.

If you have another card available, the situation just got a lot easier. You may have been able to work something out with the bank to pay that bill. But it would be a lot of trouble, and if you still had a couple days before you returned home, you still have a lot of additional transactions to deal with.

3. Have a low limit on your card. That way, if someone steals your credit card number, the amount they can charge to your card is limited to a low value. Since the banks are transferring responsibility to merchants with the new chip cards, if the merchants don’t meet all the necessary requirements of compliance, it may be harder or take longer to get your money back. By having a lower limit on your card, the amount that can be charged is lower and the amount that you have at risk is limited.

The new credit cards with the chip in them are being proclaimed as the solution to our credit card worries. But, just as we discussed over the last two days, the reality doesn’t match the claims.

These new cards will provide more protection from fraud when presented at a store and used in the chip-reading terminal if the customer enters their PIN.

However, fraud will still occur, even when using the chip.

In addition, these cards can still be used by the old “swipe” method. That defeats the security of the chip-and-PIN technology.

The data on the magnetic strip that is still on these cards can still be stolen just as it has been in the past. While it is harder to counterfeit the chip, it is not impossible. But one doesn’t even need to counterfeit the chip to use your stolen data. It could be put on an old-style card. But, what about phone orders or using your stolen data online? The chip doesn’t protect you against that.

The new cards put the cardholder at risk in a way that didn’t occur with the old cards. The banks may no longer protect you if fraud occurs. You may be able to get your money back from the merchant, but that may be harder to do than it used to be with the banks.

Tag: credit card security

Daily Tip 10 – Credit Card Safety Tips

Daily Tip 09 – The New Chip Cards – the Good and the Bad