Millions of customers benefit from the convenience and flexibility of credit card usage. Plastics eliminate the need to carry large amounts of cash, and enable us to make purchases over the phone and internet. However, these advantages also apply to scammers who wish to make fraudulent purchases on credit cards. No need to tell how important it is to keep your credit cards safe. There are several steps you could follow to reduce the possibility of fraud: for example, disclose your PIN. Creditors take protective measures as well to ensure no breach of security. They offer special credit card features to prevent fraudulent transactions.

Signature Strip. The signature strip on the back of the credit card is the first level of protection. Retailers verify your signature with the signature on the sales receipt. If they do not match, the transaction will be refused. Visa and MasterCard go a step further by saying that a plastic is not valid unless it is signed.

CVV2. This is the 3 digit number printed on the signature strip of Visa and MasterCard plastics or the 4 digit number on the front of American Express cards. The number is generated by encrypting the card number and expiration date under a key known only to the credit card issuer. When you make a purchase online or over the phone, the merchant asks for this number to verify that the customer has the credit card in their physical possession.

Verified by Visa. Visa has a useful service called Verified by Visa. It helps protect Visa card numbers against unauthorized charges because they cannot be used for online purchases without your personal password. When you enter your credit card information on a merchant's website and click on checkout, you will be sent over to Visa's site, where you enter the password. Then you will be redirected to the merchant's site to complete your transaction. Unfortunately, not all merchants participate in this program.

Liability Limits. Typically, you are only liable for up to $50 worth of fraudulent charges made with your credit card. However, some credit companies may set lower limits. Check the terms and conditions of your credit agreement for details. Many companies have gone a step further for online transactions. They offer zero liability for the victims of credit card fraud committed online.

Transaction Monitoring. Credit card issuers track their customers' spending habits. Any purchase that is untypical of you can cause a temporary card suspension. If you have always bought gas twice a month at the station down the street, and suddenly there's an $8000 charge originating in Warsaw, Poland, it is going to trigger a red flag. Changes in personal information, shipping address being different from billing address and other factors can also raise flags. So if you're going to do something unusual with your credit card like go abroad or make a large purchase, it's a good idea to contact your credit company and let them know beforehand.

Photo Cards.This is just a credit card with your photo on it. It provides a retailer an easy way to verify you're the rightful card holder. However, some credit companies don't issue such plastics because they consider that the extra costs associated with producing photo cards are too high.

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Comments

Kylie Robinson, 12:22 AM, July 28, 2008
I want to have a photo card

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