While credit cards have in many ways made our lives easier, they can also create a serious headache if you’re not careful with them. It’s important to keep your personal finances secure; otherwise, you could find yourself in a world of hurt if someone acting maliciously gets a hold of your information.
If someone steals your identity, they could use thousands of dollars of credit before you even realize what has happened. Once you do figure it out, you’ll need to contact all of your creditors, call your banks, open a case, and you may even be required to go to court to ensure you’re not liable for any misuse. To avoid some of these potential headaches, here are several top tips for keeping your credit cards – and your identity – safe.
General Security Procedures
Here are some of the best basic usage tips for staying on top of your credit card security to help you safely avoid a major hassle in the future.
Sign Your Credit Card
Although many people overlook this these days, it’s still important to sign your card (or write ‘See ID’ for added security). For your safety, most merchants and retailers will not process your card if it is not signed, or they will be required to verify your identity if ‘See ID’ is written on the back.
Keep Your Receipts
Do not leave your receipt behind if using it at an ATM, or any other place that your card is used. This can leave you vulnerable to credit card fraud. Additionally, after reviewing your statements (if you get hard copies) shred them instead of simply throwing them away.
Be Careful Over the Phone
Don’t give your credit card info over the phone unless you initiated the call. This is a common scam, and even seemingly legit phone numbers can be picked up by nearby scanners. Be particularly cautious if you get a call right back after placing an order or talking to your credit card company. If this happens, hang up and recall the original number to check its status and legitimacy.
Remember to Get Your Card Back
It is easy to forget to collect your card after using it at stores. As simple as it sounds, make a habit such as leaving your wallet out until you retrieve your card. Always double check once you are out of the store as well.
Keep Up with Account Statements
Check for any suspicious charges or errors on every billing statement you receive. You can also check transactions online or set up alerts from the card issuer for each purchase.
Shopping Safely Online
Online shopping is made possible through the use of credit cards. The explosion of e-commerce has attracted many hackers to prey on this market. However, there are steps you can proactively take to protect yourself against issues shopping online:
Zero Liability
Some credit card issuers offer zero liability clauses for online purchases. If the card or its number is stolen, typically the cardholder is responsible for up to the first $50, but none after that.
One Time Use/Temporary/Virtual Credit Card Numbers
Some companies issue temporary, or virtual credit card numbers, that you can use for just one web purchase or for a specific site that can be used more than once, but only on that website. So even if the number is captured, it can’t be used anywhere else.
Extra Passwords
Some cards require an additional password to be entered online if attempting to use the card, known only by the company and you. Not all online merchants have this capability, so it will only provide protection on the sites that do.
Be Careful with Add-ons
Credit card companies will attempt to sell customers on protection in case the card is stolen, and they are left with a huge bill. It’s important to know that consumers are already covered by a federal law (outlined below). Personal liability is capped at $50, and the issuer will rarely ask for it if it’s reported stolen in a timely fashion.
Disputing Charges
When reviewing your monthly statement, if you do come across a suspicious charge, it is important to take action quickly. However, you can also rest assured that there is protection provided by the government for this exact reason.
Fair Credit Billing Act
The Fair Credit Billing Act, passed in 1975, is an amendment to the Truth in Lending Act. Like the name states, the main goal of the act is to outline consumers’ rights when it comes to errors that arise on credit card bills.
Key points of the Act:
- Allows consumers, when dissatisfied, to sue or assert other defenses against their credit card companies.
- Requires consumers to make a “good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction” from merchants.
- Restricts these rights to transactions exceeding $50.
- Protects you without requiring you to buy additional credit protection.
If you do spot a billing error on your statement, the first move is to return to or call the merchant and attempt to resolve it. This is often the most effective action to take. If it doesn’t work, call your card issuer to see what they suggest. They’ll likely request that you put the complaint in writing and send a copy to them via certified mail.
During this time of the dispute, make sure to continue to pay on the card for at least the minimum payment due. While many companies will likely give you the benefit of the doubt, and credit your account for the amount disputed, they can also deny your claim and may possibly even charge you additional fees if you haven’t been paying the amount due on your statements.
Understanding these rights as well as others provided under the Fair Credit Reporting Act is crucial to keeping your credit, credit report and score, safe, and the dispute process less frustrating.
