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Tips to Keep Your Credit and Debit Cards Safe


The FDIC published some tips in its Spring Consumer News on how you can prevent thieves from stealing your money from your credit or debit cards. Many of these tips are well known, but there are a few tips that may be new to you. In addition, the article has a good overview of the consumer protection laws that describe the limits of consumer liabilities when there are fraudulent purchases on your cards. As you can see, credit cards are safer than debit cards. Here’s an excerpt from the FDIC article:

In general, under the Truth in Lending Act, your cap for liability for unauthorized charges on a credit card is $50. But under the Electronic Fund Transfer Act, if your debit card or ATM card is lost or stolen or you notice an unauthorized purchase or other transfer using your checking or savings account, your maximum liability is limited to $50 only if you notify your bank within two business days. If you wait more than two business days, your debit/ATM card losses under the law could go up to $500, or perhaps much more. With either card, though, industry practices may further limit your losses, so check with your card issuer.

As you can see, it’s important to regularly monitor your bank accounts, and as you might expect, that is one of the tips the FDIC offers:

Closely monitor your bank statements and credit card bills. “Look at your account statements as soon as they arrive in your mailbox or electronic inbox and report a discrepancy or anything suspicious, such as an unauthorized withdrawal,” advised FDIC attorney Richard M. Schwartz. “While federal and state laws limit your losses if you’re a victim of fraud or theft, your protections may be stronger the quicker you report the problem.”

If you do see a small discrepancy in your bank statement, don’t blow it off. That may be what the scammer is hoping that you’ll do. Here’s what the FDIC says:

don’t assume that a small unauthorized transaction isn’t worth reporting to your bank. Some thieves are making low-dollar withdrawals or charges in hopes those will go unnoticed by the account holders. In one recent example, a federal court temporarily halted an operation that allegedly debited hundreds of thousands of consumers’ bank accounts and billed their credit cards for more than $25 million—in small charges— without their consent.

Finally, those new RFID cards may not be as risky as we have been led to believe from the media. According to the FDIC, these can be more secure:

“Today an RFID card is nearly impossible to breach because the chip in it creates an encrypted signal that is extremely difficult to hack or compromise,”

I don’t know about this. I remember one media piece which showed how an expert was able to grab card numbers from RFID cards over the air at short distances from strangers.


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Comments
15 comments.
Comment #1 by Anonymous posted on
Anonymous
The RFID quote is bogus. The data on the card is encrypted but it's not passed to the bank in encrypted form. Instead every terminal knows how to decrypt the card and send the unprotected data to the bank. This means a thief only needs to buy or get his own terminal to read the data. The world (besides the US) has already moved to a different kind of chip that replaces the magnetic strip and requires physical contact with the card so a more proactive challenge/response "conversation" can be made with the card. The goal is to make it harder to duplicate a card.

9
Comment #4 by Anonymous posted on
Anonymous
Debit cards are 10 times more dangerous to use then credit cards. Debit cards clear on your deposit accounts, credit cards are just line of credit and are not connected with you money.

Credit cards fraudulent charges can be disputed up to 60 days without any problem, debit cards are limited to few days only and the dispute may tie up your funds for long time if you have to close the account in order to stop future fraudulent charges.

14
Comment #6 by Anonymous posted on
Anonymous
Credit cards can be just as dangerous as debit cards.  If the bank investigates and says you still owe them, they can send it to collections or grab it out of your other accounts using the "setoff" clause.

4
Comment #7 by Anonymous posted on
Anonymous
Anonymous - #6, not likely such scenario will happen, the bank needs court order and to prove the fraud was done by the holder of the card.
Debit card connected to your reward account can clean $25K overnight in fraudulent charges.

7
Comment #8 by Anonymous posted on
Anonymous
#7  Read the fine print on the Bank's disclosure statements.  Post #6 is correct.

1
Comment #9 by Anonymous posted on
Anonymous
Use foil. Don't have to but a special folder or wallet for them. 

2
Comment #10 by Anonymous posted on
Anonymous
buy not but Sorry

1
Comment #11 by HvAssetsHvn posted on
HvAssetsHvn
Side comment: Do not use your credit card with online dating sites. They will take unauthorized debits from your account. Many are off-shore non-physical websites so they cannot be prosecuted. It does not matter if they say they are "Christian."

1
Comment #13 by Anonymous posted on
Anonymous
I found over time...

Have credit cards with banks that you do not have other assets/deposits with...therefore no offset

On car rentals or... use a credit card just for that with a relatively low dollar amount...don't want the damage to be charged to credit card.

If married, calendarize having a standard letter, i.e. no email, US mail to each credit bureau...i.e. one every two months is free, for a credit report.  Otherwise, every four months.  The letter should include...do not send out any credit info, marketing info, etc. without your specific written consent...the latter may not be successful (all the time) but the amount of junk mail is "way down."

Opt out of any and all purported personal, etc. data uses by credit card companies...everytime they send you their privacy statements return and opt out!

Use a PO Box for all financial transactions (credit card, bank statements, etc.) and use on line purchases by credit card to a minimum.

As to ATM or debit card...do NOT use...see earlier comments! 

With current interest/saving rates, be more concerned about return of investment rather than return on investment!   Charge everything and use check or cash!

Pay off all credit card balances each month!

Have a great week!

1
Comment #16 by Willi (anonymous) posted on
Willi
Using credit cards or debit cards , consumer protection is very important. Credit cards are more safer than debit cards. I like your post. Some good points. http://www.mapacific.com/

1