Using a credit card to pay for everything from groceries to furniture has become the norm. If you use them properly credit cards are convenient and secure. But how do you ensure credit card security?
At Addition Financial, our members often ask us about credit card protection – and we’re happy that they do. We consider it our responsibility to educate our members and help them to protect their credit cards and other personal financial information.
We reached out to some financial experts to ask them about credit card safety. Here are the nine must-have credit card protections you need now.
#1: Credit Card Lock
The first thing you need is a way to lock your card if you notice suspicious activity. Alex Miller, the founder and CEO of UpgradedPoints.com, told us:
“Most credit cards can be locked on the spot – so you can lock your credit card from use directly from your credit card provider’s app, or if you lose your card, lock it to prevent further use.”
If you’re not sure whether your credit card carrier offers an instant lock feature, double check on their website or app. You can access Addition Financial’s lock card feature from our mobile app. Keep in mind, too, that most financial institutions have an option to lock debit cards. Whether your card is lost or stolen, or you notice suspicious activity, locking it will prevent additional problems and give you time to find or cancel the card.
#2: Loss Limits
If someone makes an unauthorized purchase with your credit card, does that mean you’re on the hook for the charge? The answer is no and it illustrates why it’s safer to shop online with a credit card than with a debit card.
According to the Fair Credit Billing Act, credit card holders are liable for only the first $50 of fraudulent charges. If you report the credit card missing before any fraudulent charges, your liability is $0.
Keep in mind that you may end up liable for a higher amount if you use a debit card. Your credit card liability is only $50 if you report the loss within 2 days. It increases to $500 if you report more than 2 days after the theft but less than 60 days after your statement was sent to you. You may be liable for the entire amount stolen after that.
#3: Fraud Detection Services
The best way to avoid a data breach or theft turning into a big headache is to detect fraudulent activity early. Financial institutions recognize the importance of fraud detection, which is why most offer an early fraud detection service to their cardholders.
Jacob Dayan, the Co-Founder and CEO of Community Tax, told us:
“Many [financial institutions] offer fraud detection services that will keep an eye out for suspicious activity. There's also zero liability protection, which makes consumers not liable for any money owed to the creditor for any fraudulent activities. Many also offer the ability to freeze your account and monitor your credit score. All these features benefit both the consumer and the creditor, so it's a win-win situation!”
Fraud detection programs flag suspicious activity as soon as it appears on your account. Flagged items might include:
- Higher or more frequent spending than usual
- Charges from unusual locations
For example, if you had dinner delivered in Florida and later that night, a charge for a restaurant in Hawaii appeared on your bll, that might prompt your bank to contact you. The trade-off for fraud alerts is that you may sometimes receive a call for a legitimate charge. However, a small inconvenience can save you the hassle of having to ferret out unauthorized charges on your own.
#4: Credit Monitoring
You already know that you should check your credit card statement each month and report any suspicious activity to your bank. However, that’s not the only way to keep an eye on things.
Credit monitoring services offer a hands-off way to stay apprised of suspicious activity on your account. Some financial institutions offer credit monitoring as a service or at a reduced cost. However, you can also get this service from outside companies.
Once you enroll, the monitoring service will perpetually monitor your credit reports for suspicious or fraudulent activity. If they spot anything out of the ordinary, they will send you a notification. From there, you can take the appropriate action of freezing your account and contacting your bank to resolve the issue.
#5: Mobile Wallet
Your credit card information is far more vulnerable to theft or fraud if you carry the card with you. The good news is that thanks to modern technology, you no longer need to take that risk.
Mobile wallets are free and secure. After you have stored your information in the mobile wallet, you can protect it with biometrics. When you make a purchase in a store, you can make a contactless payment. You can also use your mobile wallet online.
The best part is that each transaction is encoded. The vendor you are paying never receives your credit card information. Instead, they get a one-time code that is good only for the transaction in question. Popular mobile wallets include Google Wallet, Apple Pay and Samsung Pay.
#6: Virtual Credit Card Numbers
If you do a lot of shopping online, another option to protect your information is to use one or more virtual credit card numbers.
A virtual credit card number is a proxy account number and CVV that are linked to your credit card account. Many financial institutions offer free virtual numbers. You may have a unique virtual number for individual merchants or one virtual number that you use for every transaction.
Best of all, you can ask for a new virtual number at any time. You could even get a new number for every transaction if you are very concerned about credit card fraud.
#7: RFID Blocking Sleeve
While many of the potential credit card risks we have discussed here are relevant for online purchases, you should also be wary about in-person protection. Thieves sometimes use radio-frequency identification (RFID) scanners to scan and steal credit card numbers from a distance. They may also use near field communication (NFC) scanners.
This is a problem with an easy and inexpensive fix. Instead of simply sliding your credit card into your wallet, buy a sleeve that shields it from RFID and NFC scanners. You can buy these sleeves online for just a few dollars apiece. Using them will make it impossible for anybody to scan your card from afar.
#8: Secure Wi-Fi
Wi-Fi is everywhere these days. You can go to any library or coffee shop and get access to free Wi-Fi. And while “free” may be your favorite price, you should be aware that there are risks associated with using public Wi-Fi.
If you do any shopping online, it’s essential to use only a private, password-protected Wi-Fi network. Using an open or public network makes it easy for people you don’t know to potentially capture your credit card information and use it.
What if you need to use public Wi-Fi, you should use a Virtual Private Network (VPN) to mask your activity and protect your data.
#9: Strong Passwords and Two-Factor Authentication
This last protection might seem like an obvious one but we talk to many people who don’t take the most basic precautions to protect their credit cards.
The first basic precaution you should be taking is creating a strong password for your account and changing it regularly. The easiest way to accomplish this is to use a reliable password manager – LastPass is a good choice – that can generate secure passwords and store them on your computer or phone.
Next, you should always use two-factor authentication if you can. Many financial institutions offer one of two options:
- Send an authentication code via text that you must enter to access your account; or
- Use a biometric scan (a fingerprint) to confirm your identity.
Biometrics offer the greatest protection. If someone stole your phone, they might be able to access your account by reading the code from your text messages. However, they won’t be able to duplicate your fingerprint.
Adding these extra layers of protection makes it difficult for any thief to get their hands on your information. Most would-be thieves don’t have the ability to crack secure passwords. They will turn to an easier target if you make it difficult for them to steal your information.
Credit cards can be a secure and convenient way to pay for everything from groceries to electronics. However, it is essential to protect your credit cards. Of the nine protections we have offered here, many are things you probably already have thanks to your credit union or bank. Others are available for free or for a low cost – and spending a little money can give you the peace of mind you deserve.
Credit union credit cards offer the same protection as bank cards, and usually with lower rates and fees. Click here to read about Addition Financial’s credit card options and apply now!
