Credit Card Security [Complete Guide]

More and more people have begun using credit cards for their transactions. So much so that according to the Federal Reserve, 83% of adult Americans have at least one credit card. The use of credit cards have become so prevalent that credit card debt has reached an all-time high.

According to the Federal Reserve, the national credit card debt in the United States now exceeds $1 trillion. It continues to grow with an average growth rate of 3.5% since 1997. While all of this can be good, credit card security has become a major issue.

With advancements in technology for credit card security, credit card fraud has become less of a problem. However, the United States remains to be the country most prone to credit card fraud.

According to Shift Processing, 38.6% of the global credit card fraud reported was from the United States. But just how safe are credit cards to use? To know this, you need to know the safety features of a credit card. 

How Safe Are Credit Cards?

Credit cards have a lot of security features to ensure each transaction you make with them is safe. Otherwise, anyone can just as well make use of your credit card details which can put you in a financial disaster.

Here are the different security features of credit cards:

  1. Chip Cards (EMV Cards) – With just magnetic stripes, cards are more prone to being “skimmed”. With EMV cards, the information for each transaction becomes encrypted. 

Moreover, this encrypted code is also unique just for that transaction and is never used again. This means that if ever someone copies the code and tries to use the same card with the same code for another transaction, the code is useless.

  1. Security Code –  This is the three-digit code you can see at the back of a credit card. For most credit cards, it’s a three-digit code at the back but for American Express, it’s a four-digit code at the front.

This security code is then used when you make a “card not present” transaction. Such as when you make transactions online, security code is needed. It’s an added layer to prevent credit card fraud.

  1. Holograms – The hologram of a credit card is another layer for security. This prevents forgery as the hologram can just be created by dot-matrix machines or through electron-beam lithography.

The hologram is the holographic image you can see on most credit cards. These are stacked images and each credit card network has their own unique hologram. This security feature is also used for passports, bank notes and other high-end products.

  1. Usage Monitoring – If you’re issuer detects an “abnormal” purchase like one that is of a large amount or a purchase made in a different location, the issuer can flag the card and take actions to confirm if the purchase was from or authorized by you. 
  1. Basic Safety Features – All credit cards have a unique account number, expiration date, magnetic strip and a signature panel. 

Are Credit Cards Safe?

Just in 2018, over $24 billion dollars was lost over fraud card payments. Among all types of theft fraud, credit card fraud was ranked as number one. This is according to Shift Processing

Before advancements in technology for improved credit card safety such as EMV cards, skimming was a common cause of credit card fraud. This happens when you run your card through a skimmer which steals your card’s information.

Criminals could then duplicate your card and they can keep on using the new card until you become aware or you’re made aware by your bank about odd transactions made through your credit card. 

According to Credit Card Insider, “there are 10 trillion possible combinations of credit card numbers out in the universe, and only about 65 million of them are being used.” This means that the likelihood of a criminal getting a valid account number is low.

Certain stores offer credit cards. For instance, Walmart has Walmart credit cards and they also even offer one that’s powered by Mastercard. The Walmart credit card in partnership with Mastercard is as secure as other Mastercard credit cards. 

According to Finder, these are these security features that comes with Mastercard credit cards: 

  • Chip technology
  • Zero liability policy
  • Identity theft resolution
  • SecureCode
  • Tokenization

However, don’t ever make the mistake of posting a photo of your credit on social media showing all of its important details. This can be a cause for credit card fraud. 

Another statistic from Shift Processing is that 69% of fraud starts with a consumer being called on the phone for a supposed prize or overdue loans. This is called phishing. This can happen not just through a phone call but also through emails and text messages. 

As long as you are aware of the common causes of credit card fraud, you can be safe from being a victim. In other words, credit cards are safe to use. Just be sure that you know the do’s and don’ts of using credit cards.

Credit card fraud happens but the major reason for this is human error not knowing certain actions such as posting photos of credit cards online can be a cause for theft. To further improve your credit card security, change your password on a regular basis.

You can also review your credit card transactions. There are a lot of benefits with using credit cards such as building a good credit score. 

We hope this article has helped you with knowing more about credit card security. If you still have second thoughts about using credit cards more often, know that they are safe to use and can be of great help if used well.