Monday, January 20, 2014

Credit Card Safety

Target managed to divulge credit card information on –oh say, 110 million of their nearest and dearest friends. Upscale Neiman-Marcus allowed a breach in their security as well, showing that there are no gated communities when it comes to credit card data theft.

Other than cancelling all your cards, there is nothing you can do to completely secure your credit card information. So, what can you do to protect yourself?

You could sign up for a service like Abine’s, which promises secure credit card online shopping by setting up a one-time use credit card for you. That way, when the next retailer loses its records, the thieves won’t get useful information. Of course, should Abine itself be hacked…you see my point about nothing being safe.

Here’s the approach I use. I have three credit cards, all of them free reward cards of some sort or the other. I use one, my Everyday Card, for all online and in-store purchases. I have set up alerts to send me an email (I don’t text message, but that is another alternative) whenever they process any online, phone or mail charge. Another alert notifies me of any brick and mortar charge over $25. Any international charge triggers an alert. One credit card would send me alerts for any gas station charge, but I don’t bother with that one.

It takes virtually no time for me to delete the emails when they come in since I’ve just made the transaction. And, if someone else makes a charge on my card, I know quickly and can report it to the credit card company.

I use card two, my Automatic Payments Card, for all the (surprise) automatic monthly payments: phone bill, electric, gas, cable, internet, health care, what have you. If something happens with the Everyday Card, I do not have to go online and change all the credit card details for these automatic payments. This saved me much aggravation a couple of years ago when I was pumping gas and managed to slip the credit card into a nonexistent pocket, thereby leaving it on the ground for someone to recover. Later that day when I discovered I had lost it, I canceled that card, but didn’t have to fool around with my auto-charges.

I also have alerts set up for the Automatic Payments Card, since utilities have also periodically allowed folks to hack their data. For that matter, banks have lost data themselves on their credit cards. If this card is compromised by one of my vendors, I’m stuck with changing all my automatic payments. So far that hasn’t happened.

Card three is my emergency card. When I am local, I keep it at home. If I am traveling, I carry it with me, but don’t keep it in the same place as my Everyday Card in case I lose that card (or my whole wallet, which I’ve managed to do more than once in my life.)

I don’t want to minimize the trauma of credit card theft, let alone identity theft. But with all the electric zeroes and ones running around where all kinds of bad guys can read them, I don’t propose to try to beat them, just make it unprofitable for them to steal my stuff.

Another hazard with credit cards is someone setting up one in your name without your knowledge. Once a year you may request a free credit report from each of the three main credit agencies, Experian, Equifax and TransUnion. I’ve set up my calendar to remind me to spread my requests out four months apart. They hold similar, although not exactly the same, information. I review the report primarily to assure no one has posted an unwarranted black mark on my record, but if someone had set up a card in my name, I would find out when the report showed a card I didn’t recognize. You can put holds on the agencies providing credit information to anyone, which will prevent someone establishing credit in your name, but that provides some hassles of its own and I haven’t bothered.

How about you? Any tips you want to share?

~ Jim

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