Forbes Magazine reported last year that as many as 10 million credit cards had been compromised during the first quarter of 2012. Global payment transactions in that fiscal year alone had generated more than $167 billion. This staggering amount emphasizes the importance of credit card protection, not only to stave off projected losses in macro economic scale, but also to soften the impact on victims of fraud.
Financial experts assert that money losses directly connected to fraudulent credit card transactions can be prevented in two ways: First, in the observance of measures that heighten your security, which subsequently raises a barrier to keep you from harm’s way, and secondly, in contracting credit card protection services or credit insurance that credit providers offer. (We’ll discuss this later in this article.)
Guarding your credit card means minimizing the likelihood of fraud.
A lost credit card opens up opportunities for thieves not only to steal you money but also your identity. Your first line of defense is by not losing sight of your card while purchases are being processed. Like your regular ATM card, credit card information can be duplicated by simply swiping on a portable data copier, according to CNN. Remain alert when making payments, and never hesitate to ask questions (Ledford Undated).
According to a report by About.com, it is best to treat your credit card as your private territory. Adopting discreet handling of this sensitive financial tool leads to a relatively secured credit card for you. That means protecting its details from ever leaking out and staying a few steps ahead of crooks who might be snooping around. The key point to remember is desisting from discussing in public any information about your credit card.
Securing your online habits is the best way to protect from credit card fraud.
Connect only on secure networks; keep a distance from public computers, and unsecured payment networks. The same precautions apply when shopping using your smartphone. Usually when you shop on mobile devices, you may be prompted to lower your guard and recklessly access Wi-Fi networks from hotels, restaurants and other public places.
Also, when shopping through any form of computing devices, consumers are served well to limit their dealings with reputable sites, wrote CNN’s Heather Kelly. Given this, make sure that you are processing your transactions and giving out details on a safe online vendor, look for these security indicators on the URL: HTTPS and a small lock icon.
“That one letter on the end, S, is the difference between a secure site and an unsecured site … (while the) lock indicates that you have a SSL (secure sockets layer) connection,” said Kelly.
Sticking with credit card offers more protection for your finances.
Despite the risks that go with the plastic money, experts recommend using it over debit cards. While financial advisers maintained that debiting encourages financial discipline because you only spend what you have in your bank account, credit cards offer more security.
In order to protect from credit card fraud, most credit card providers bundle purchase protection with their services. This acts as a safety net in the event of questionable transactions. Also, delivery of substandard goods or non-delivery of items would allow credit card users to contest or even cancel payments.
This prospect is unavailable for debit card users because the cards “are linked to your bank account so the money you spend is automatically deducted from your account,” wrote Jennifer Barrett of The New York Times. Once payment has been made, the money is gone forever.
Apart from extending your purchasing power and earning reward points and freebies credit cards cover your financial tracks with more superior security layers, especially when performing online purchases.
Resorting to commercial credit card protection or credit insurance is a viable option.
This service is essentially a fail-safe measure to cover your specific credit card dues during episodes of emergency. “The insurance is designed to cover your monthly minimum credit card payments in case of loss of income due to job loss or extreme illness, or pay your balance in the event of death,” ChayaCooperberg wrote for The Globe & Mail.
However, this service is not a one-size-fits-all solution. Most versions of this insurance policy are governed by prerequisites that disqualify many. Plus, the core service itself is redundant with the benefits already covered by life and disability insurance policies.
Whether you choose to personally look after your credit card or avail of an insurance policy, the importance of keeping it uncompromised cannot be understated. Considering possible losses to follow with a lost credit card, are you willing to gamble on self-protection alone? Or will you get the insurance coverage offered in parallel by credit card companies?