Data leaks and security breaches are everyday occurrences and becoming increasingly more common, with events like the Equifax breach which resulted in the leak of 56,200 drivers’ licenses, passports, and other forms of ID. Capital One was also hit with a data breach, affecting an estimated 100 million US individuals and approximately 6 million in Canada. It’s natural to wonder if your data is truly safe when opening or using a credit card. Despite the headlines, a credit card generally comes with protections that can help limit damage.
But that doesn’t mean that you shouldn’t consider opening or using a credit card. The personal-finance and data-security expert Adam Levin said credit cards could actually help protect your accounts from damage if your information is stolen. His advice? “Lie like a superhero” when setting up account-login security questions to shield personal information. Paying attention to transactions is your best defense. Identity theft and fraud cost Americans $1.48 billion last year.
Breaches have become the third certainty of life behind death and taxes. So, it’s not a matter of if your information will be compromised, but rather how easy it could be for someone to use it against you. And using or applying for credit cards generally won’t exacerbate the damage. In fact, credit cards could help protect you, thanks to fraud detection, zero-liability policies, and other safeguards.
Using a credit card is still safer than using a debit card. The great thing about using credit cards as opposed to debit cards is that with a credit card, it’s their money. With a debit card, it’s your money. Bank policies can help get you off the hook if you find charges you didn’t make. But a debit card doesn’t have that protection, as the money will come right from your accounts. It could take time to get it back. If this was money you needed for rent, car payment, or mortgage payment, that could also impact your credit.
If you’re applying for a credit card, be alert and watch out for scams. Make sure you’re applying through a real company website. Checking a site’s security is also important. Make sure you see ‘https,’ which means the site is secure. Make sure you see the little lock.
The second piece of advice for setting up online accounts. Lie on the login security questions. It can help add an extra layer protection in a world where information for these common questions can be all too easy to find online, like on your Facebook or Instagram pages. For example, if they ask you for your mother’s maiden name, lie.
Also, sign up for what’s called ‘transactional-monitoring alerts,’ Each of the credit-card companies and most of the financial-service companies do it for free. This will help you watch your purchases and allow you to respond quickly if a charge comes up that you didn’t make.
Like it or not, we consumers are responsible for managing our credit and our identity because no one knows better than we what we’re doing.
The police asked if I could identify my credit card details,
“Sure,” I said. “It’s blue and there’s bits of cocaine on it.”