How to avoid credit card security overkill
Going to extremes to protect against ID theft isn't the answer
When it comes to financial security,
you can never be too cautious, can you? Perhaps. While protecting your credit
and money is important, it's also possible to go to unnecessary extremes. Here
are the most common safety overreactions to transform into sensible defensive
Overreaction: Refusing to give your credit card
to a waiter. Much has been reported lately about
how waitstaff can take your credit card "in the back," steal its information
with a skimmer and then create clone cards. But Annika Stensson, director of media relations for the Washington,
D.C.-based National Restaurant Association, says to relax. "Like every other
merchant, they must comply with standards, and those requirements have double
and triple security," says Stensson. Restaurants "don't store PIN data,
the point-of-sale (POS) systems are customized, and they don't use passwords."
Bad eggs are weeded out, too. "It's in the best interest of restaurants to keep
transactions safe since they rely on repeat customers," says Stensson,
stressing that owners and managers aren't afraid to press criminal charges
Sensible: Charge your meal
but review receipts. "Check your credit and
bank statements and keep your receipts, says Stensson. If you spot a problem,
call the restaurant to quickly resolve it, and remember that you won't have to
pay fraudulent charges. Look out for increased levels of security against skimming, too. According to Stensson, an more restaurants are offering a "pay
at the table" option with handheld POS systems.
Overreaction: Not purchasing anything online.
If you're reluctant to type your credit
card numbers into a retailer's website, you're not alone. Forty-eight percent of respondents in a 2010 Center for the Digital
Future study reported being very concerned or extremely concerned about privacy
when shopping online. However, Hillary Mendelssohn, founder
of the online shopping guide, ThePurplebook.com, believes much of the danger is
a myth. Besides, she says, you miss out on a lot when just sticking to brick-and-mortar
stores, including "the ability to have the entire shopping world at your
fingertips, the convenience of having things delivered and getting better
Sensible: Look for the "s." Before charging,
make sure the page of the website where you enter your card information begins
with "https" rather than just "http." The "s" stands for secure. Mendelssohn
also recommends looking for the seal of an outside security company, such as
the TRUSTe symbol at the bottom of every CreditCards.com page, and to never give your credit card information as payment via email.
Overreaction: Completely rejecting credit. A cash-only lifestyle may appear safer than one that
incorporates credit, but that's just not so, says Boston identity theft expert
and McAfee consultant Robert Siciliano. "Credit is safer than cash," says
Siciliano. "I don't worry about my credit cards or fraud at all. I use it over
the phone, in real life, online, everywhere." After all, lost or stolen cash is
gone for good, but if someone else uses your plastic, you won't have to pay for
the fraudulent charges. More, if you avoid borrowing from a bank altogether,
you won't build a credit score and history -- a requirement if you ever want to
finance a home.
Sensible: Charge, but check. Use credit, but "pay attention to your statements," says
Siciliano. "Check them online at a minimum every month. Every two weeks is
better -- this way you can monitor fraud as well as your spending."
Overreaction: Being too afraid to get help. "Credit counseling will ruin my credit!" "They're going to
yell at me!" Such are the fearful cries of millions of debt-ridden cardholders,
but the reality is the opposite. Agencies never alert credit bureaus or
creditors that you've had an appointment, and counselors won't judge or scold
you. They will, however, develop a budget and offer a set of options you can
take to deal with your financial troubles. If you pay your debt via their debt management plan, a lender can perceive it negatively, but it's not calculated into
a credit score.
Sensible: Seek out reputable assistance. Real help does exist, but to know you're in the right place,
make sure the agency belongs to the National Foundation for Credit Counseling
or the Association of Independent Consumer Credit Counseling Agencies, the major accrediting agencies in the credit counseling industry.
Overreaction: Pulling credit reports
constantly. Should you keep a close watch on your
credit reports? Absolutely! But John Ulzheimer, president of consumer
education for the Costa Mesa, Calif.-based company SmartCredit.com warns against going overboard. "It's definitely unhealthy
and not necessary to check your reports every day or every week," says Ulzheimer.
"The information won't change that rapidly, so it's a waste of time and
Sensible: Pull reports annually. Under most circumstances, getting your consumer credit
reports at AnnualCreditReport.com once a year for free is adequate. However,
says Ulzheimer, if you've had past experience with identity theft, be more
diligent. "Quarterly is a healthy frequency," he says. In that case, he also suggests
subscribing to a credit monitoring service, as it can be more efficient and
less stressful than doing it on your own.
With so much press about identity
theft and fraud, it's easy to become overly skittish about having and using
credit. But don't let it stop you from taking advantage of the conveniences and
protection it offers. A few smart precautions can go a long way.
See related: Affluent are more often victims of ID theft, How to check for, fix ID theft or fraud, Credit monitoring services: How to pick the best one
Published: September 20, 2011