Credit card security and protection

Article brought to you by Ollo and authored by Shannon McLay, Personal Finance Expert and Published Author.

It seems that almost every day you read a story online or in the newspaper about another security breach where credit card data is compromised and it’s easy to succumb to fear and think that maybe you should never use a credit card again. However, in this day and age with greater online transactions and mobile technology for stores, credit cards provide convenience and they actually give you security, if you monitor your cards properly.

Credit card security

The credit card industry is constantly evolving to better protect its customers against fraud in all forms. If you already have credit cards, you may have received a new credit card recently with a chip in it. This chip technology, known as EMV because Europay, Mastercard® and Visa created it, is designed to protect against fraud that occurs when your card is swiped. The chip creates a unique transaction every time it’s used which makes it difficult for criminals to copy your personal information.

Even though you should constantly monitor the transactions on your cards, many credit card companies monitor your card activity 24/7 looking for unusual or suspicious charges on your cards. Within minutes of questionable charges, most credit card companies will reach out to you via your preferred contact method whether it’s text, phone or email to let you know about the charge and confirm its veracity.

Another form of security provided through credit card issuers is zero liability. If you have a card that offers zero liability, then that means that the card issuer guarantees that you will not be responsible for unauthorized charges made on your card. Depending on the card issuer, there may be certain steps you need to make to ensure that you are covered under this policy; however, most are very flexible and want to work with you to resolve any fraudulent activity.

There are also steps that you should take to enhance the security of your credit card to avoid any issues down the line. It may be tempting and it makes your life easier, but you should refrain from saving your credit card numbers online. You should also continuously change passwords and keep your passwords on your credit accounts in a secure location.

When you are making purchases online, you should only buy from secured or trusted sites and be wary of sites that do not look legitimate. Look for the lock in the corner and only go to sites that start with “https” — the “s” means it’s secured. If you find out that a site you have used has been compromised, monitor the card that you used or consider calling your credit card company to receive a new card number as a preventative measure.

Your best line of defense in credit card security is monitoring your accounts. With mobile and online access to your credit card activity, it’s easy to check-in every few days to make sure that you have made all of the charges appearing on your card account.

Credit card disputes

Thanks to the Fair Credit Billing Act, you actually have a great deal of protection around your credit card usage. This legislation, originally passed in 1970, provides consumers and lenders with the guidelines for managing disputes around billing statements. This law encompasses unauthorized charges, charges for unaccepted or undelivered goods and services and other disputed charges.

If you discover a billing error on your credit card statement, you have 60 days after the bill was mailed to you to dispute the error with your credit card provider. If you miss this 60 day window, your lender may still honor your dispute; however, you lose your legal right to dispute which is why it’s important for you to constantly monitor the charges on your credit cards (even if you’re signed up for auto-pay).

Credit vs. debit security

Credit card usage not only helps you build your credit profile, which could save you money over time with lower interest rates on loans, but it also gives you the flexibility to determine when and how you will pay for goods and services. When you use cash or a debit card, your funds are immediately gone and for larger purchases, this may leave you susceptible to a cash emergency down the road.

With a credit card, you can pay for the goods or services and you will have until the end of your billing cycle to repay the funds. If you don’t pay off your balances in full, your credit card company can charge you interest on your balances; however, as long as you are continuing to make payments towards your card, you have some flexibility as far as when you repay the charges in full. For surprises or emergencies you hadn’t planned on, this type of flexibility may be exactly what you need to avoid a financial hardship.

Many of the protections applied to credit cards are similar for debit cards; however, the resolution is much more of a challenge for a debit card user than a credit card user. Once a debit card transaction has taken place, the money is immediately out of your bank account as opposed to a credit card transaction where the charges accumulate over the billing cycle.

Credit cards have advantages, but make sure you use your cards responsibility. It is best if you have a plan to pay down your balance before you put charges on them.

This article is provided to you solely for education purposes. It is not intended to provide you with any specific legal, investment or financial advice and you should not solely rely upon this in making financial decisions.