Consumers can protect themselves from credit card fraud

Wednesday, March 26th, 2014
Updated: March 26th, 2014
The content is accurate at the time of publication and is subject to change.

Security of debit and credit cards is now one of the important topics in the credit card industry. It is not a secret, and credit card industry representatives readily admit that thieves are often one step ahead and that data breaches are a fact of life. While the payments problems are being solved, you have to help yourself.

Most card companies already have custom alerts and other features consumers can use. There are mobile apps that could keep most fraud from happening. And there are microchip cards which are used everywhere in the world but barely exist in the United States so far.

Let’s take a closer look at what you can do to protect yourself.

Alerts and tools

Credit card issuers offer all sorts of ways to limit the damage a thief may do to your credit or debit account or at least get a quick warning of possible fraud.

Capital One offers a common list of alerts. You can turn on text or email alerts that will arrive when your balance goes above or below an amount you set, when the charge occurs above or below a certain amount, when any charge occurs at all. You will also receive an alert if a transaction doesn’t go through because of insufficient funds in the account.

Citibank can notify you when you are within a set distance from your credit limit. Chase will send you an alert if its systems detect an unusual charge and let you reject it immediately. With American Express you can get a ping whenever someone gets a cash advance using the card.

Set at least a few alerts even if they can only warn you about theft after it has occurred. That will help your stop further possible harm.

Mobile apps

If consumers could turn their debit or credit card on before the each charge and then off again right after the charge, it would be harder for thieves to do their work.

Such technology actually exists. A provider of mobile banking SmartApps, Malauzai Software built an on/off switch to allow the customers to be able to turn the cards off temporarily (in case of loss, for example) via their mobile banking app.

Malauzai discovered that fraud-wary customers where turning their cards on and off before and after every charge. Now many small banks and credit unions have adopted Malauzai’s on/off switch.

Capital One and USAA have built their own app for debit cards. Chase, American Express, Citibank and Bank of America have no plans to do so.

Chip Cards

The using of old-fashioned magnetic stripes on the back of cards makes the United States a fraud-friendly country. Thieves can relatively easy counterfeit such cards.

At long last, banks and credit card issuers are going to issue plastics with a microchip inside that will transmit a unique code each time you use a card with a chip technology. It is supposed that thieves won’t be able to counterfeit that sort of cards easily, at least for a while.

The consumers will have to dip chip cards in the terminals instead of swiping them. Plus some banks can make you enter a PIN instead of singing for a purchase. As long as you don’t lose your card or have it stolen, the Target like fraud should be a lot harder to pull off.

Until you have a chip card, it is worth setting some alerts and asking your bank to give you all of the technological options that are available right now to protect you from fraud.


All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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