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.