Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.
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Dear Opening Credits,
I have a question regarding credit card security. Isn't using a
card online incredibly unsafe? And if I misplace or lose my credit card, can
anyone use it right away? -- Hamze
is true that if a crook gets hold of your credit card -- either the actual
piece of plastic or the various digits that identify it as real -- he can
usually buy what he wants with it, up to the available credit limit.
surprisingly, the easiest way for someone to tap into your credit line is via online
and over-the-phone transactions. A thief doesn't need the card itself but what's on it: the
account numbers, the expiration date on the front and security code. Rather than
the merchandise they buy showing up on your doorstep, they also change the delivery
address to their own or to a post office box.
a little more difficult for someone to purchase things with your card at a
physical store. If the cashier does the
right thing and compares the buyer's identification against the name on the
card, the thief will experience a problem -- and may have to make a mad dash
out of the building, hopefully with a security guard hot on their tail.
Nonetheless, professionals can get around this fairly easily by creating a
duplicate card imprinted with the correct numbers and dates, but with their own
name. Then, with the fresh but fake card, they're free to walk into any store and
shop away until either you or the bank gets wise and shuts the account down.
is a terrible feeling to know that your card has been compromised and, yes, it
can wreak some havoc. Once you report the account as stolen, you may not have
access to the account until the matter is sorted out, though that usually takes
just a day or so. It won't be long before
you get a new card with different numbers in the mail. and you can use it as
normal. As long as the fraudulent
charges are caught quickly, you won't
have to pay for them either. According to the Fair Credit Billing Act,
cardholders are not held responsible for fraudulent purchases over $50, but
banks typically absolve you of even that nominal sum. Your account statement
will be wiped of the charges and after the issue is resolved, the activity will
not affect your credit report and scores.
who is covering the cost of all the items, services, gift cards and cash
advances that these crooks charge up? Not you, and all too rarely the thief. Most
of the time it's the credit card
issuers, the card networks (such as Visa and MasterCard) and merchants that
bear the brunt of the financial damage.
it is always best to secure your credit cards. Here are some guidelines to
carry the cards you need on a daily basis. Tuck any others away in a safe place
permit anyone besides you to have access to your cards, your card accounts and
your account balance and activity online. Once a week is wise, but there's no harm in
reviewing it daily.
the credit card companies immediately if you see transactions at stores where
you didn't do business.
shopping online, use secure sites (those with "https://" in the URL) that
have an excellent reputation for security. Sites that offer especially cheap
merchandise can be sham operations designed to steal your account data after
you enter it.
you get a call saying your card was compromised, do not give away any personal
details (such as your card number or birthday or Social Security number) or call
the phone number they provide. Thieves have been known to steal account
information this way. Instead, locate the phone number on your card or the issuer's
website and call them to find out the real story.
frustrating part of all this is that people who are intent on committing these
types of crimes can do so with relative ease. It's up to all of us to make it
as hard for these crooks as possible.
See related: 4 keys to credit, debit card zero-liability policies