January 26, 2014

Every Single Credit Card In America Has Been Hacked. (...Or Might As Well be)

I honestly do think its quite likely that every credit card number in the country has been stolen somehow and somewhere.    Recently Target announced that 110 million card numbers and other data were stolen from their stores by hackers.    But that is certainly not the first major security breach and it seems every month or two we're hearing of a new company announcing that all their customers data was stolen or 'might have been' stolen or was lost, etc.    Its a reality today that your credit card numbers might fall into the hands of criminals.   Not only do we have to deal with hackers stealing information from companies we can also have a card number stolen during its routine use.   Sounds awful right?    But what do we do about it... ?

First :  Don't panic.   For a credit card you have no liability on losses.

If your credit card number is stolen you are not liable for unauthorized use.   

Really its true, trust me or you can read it yourself right off the FTC website.   This is federal law.

While you're not liable for unauthorized charges they can still be a hassle and we'd all certainly want to avoid the nasty surprise of a $1500 charge showing up on your card.   So what else can we do to help avoid unauthorized activity? 

1. Watch your statements.  Watch your statements.   Watch your statements.    I said that three times since its important.   You won't catch fraud on your account if you aren't paying attention to your statements.   In fact you should really do more than just watch your monthly statement (see item 3) but watching your statement is the minimum.

2.  Use a credit card instead of a debit card.    The liability for credit card fraud is zero.  The liability for debit card is potentially unlimited.   What this means is if a thief steals your card number and makes fraudulent purchases then you should pay nothing with a credit card but they could potentially empty your bank account with a debit card.   Its not usually nearly that bad with a debit card but there is certainly more liability.  Again see the FTC rules.

3.  Set up alerts and notices for your account.  Credit card providers often have ways to setup text and email alerts for activity on your credit account.    You should setup up alerts for any kind of suspicious activity.   My Discover card has options to notify me of suspect activity, charges over a $300, charges occurring outside the USA and similar items.  The exact alerts you'll want will depend on your situation but you would probably benefit from some sort of notice if abnormal activity occurs.

4. Get a new credit card number.   If you're particularly worried about identity theft you can simply get a new card number.   In fact getting a new card number on a periodic basis may be a good defensive measure.   No telling when your cards was stolen or who might have it.  Its not as if every security breach is immediately announced in the press since many are never even detected and merchants  are hesitant to admit their security failures.


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