BACK

Fine Print

Should I periodically replace my card to deter fraud?

Virtual cards, tokenization and dynamic card verification values are ways to conceal important identifying card information

Summary

Concerned about the safety of your card information? Tackling the issue by constantly replacing a physical card could be too cumbersome.  

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Are you worried that your credit card information could be compromised, and looking for ways to proactively handle this eventuality?

Reader Asa has such concerns, asking if it would be wise to periodically cancel and replace credit cards because it seems that businesses keep their customers’ credit card information indefinitely.

In today’s environment of high-profile data breaches, such a concern should not be dismissed lightly. The Identity Theft Resource Center, for one, reports in its data breach report for 2019 that the number of U.S. data breaches for 2019 was up 17% to 1,473 from the number of data breaches reported for 2018.

The San Diego-based organization finds that incidents involving hacking accounted for the largest percentage of these breaches, at 39%, followed by incidents of unauthorized access, at 36.5%.

The good news is the damage associated with these breaches was down, with the number of records and personally identifiable information that got exposed through these breaches on the decline.

Also, there are deterrents to prevent merchants from being lax with your card information, with the Payment Card Industry having security standards regarding how merchants should store such information.

See related: As credit cards go contactless, can RFID-blocking wallets protect your data?

Get a virtual card

Asa, your proposed solution of periodically canceling and replacing credit cards seems a bit tedious. Robert Steinman, CEO and founder of Keyno, a provider of dynamic card authentication technology, pointed out, “Canceling and replacing cards is a hassle. Having to update all of the places that you have the card on file and then the time between asking for a replacement card and getting the card seems like forever. Best to replace your card only when absolutely necessary.”

Rather than constantly replacing a physical credit card, one way of protecting your card information is to use a virtual credit card whenever you feel the need. This is a card with a unique number and a limited life.

This sort of card has a limited life span and can be limited to a single use, or for use at a specific merchant, much like a digital prepaid card, until the preset money limit on it runs out.

Although an advantage is that these cards can be issued faster than a physical card, Steinman noted that they come with many of the disadvantages of constantly replacing a physical card. The downsides to a virtual card include:

  • Having to constantly generate a new virtual card.
  • The tedium of managing subscriptions with constantly changing cards.
  • The hassle of returning merchandise when merchant records for purchases are based on a virtual card.
  • They are not accepted everywhere.

See related: Virtual account numbers grow as a way to cut fraud risk

Replace card information, rather than entire card

A less onerous way of protecting your card would be to replace identifying card information periodically, rather than the entire card.

One such approach, called tokenization, would replace your sensitive card identifying information, including your card number, with a randomly generated and unique digital identifier that is not related to your account. This enables you to shop online or with your mobile device without exposing your real card number.

Although the merchant would still record the transaction under your real number, it is exposed less in transit. Also, your online shopping choices might be limited since you would have to use a digital wallet or merchant app to make purchases. And not all businesses have adopted this approach.

A dynamic card verification value (CVV) approach is another way to constantly change your card information. In this method, the CVV that’s printed on your card would change, but your card number would not be hidden. Merchants don’t have to opt into this approach, so you could use it without hindrance. Contact your issuer to ask about possible security options available to you, including any of these.

Asa, while your fears are legitimate, you shouldn’t have to constantly replace your physical card to keep your information safe. You could look into whether any of these other techniques work for you.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Fine Print

Clarity Services by Experian: What it is, how it works

Clarity Services uses alternative data to help consumers with thin or nonexistent credit profiles improve their credit. Here’s how it works and how you can take advantage of it.

See more stories
Credit Card Rate Report Updated: February 26th, 2020
Business
14.95%
Airline
16.91%
Cash Back
17.32%
Reward
17.17%
Student
18.58%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.