7 Ways to Protect Yourself as You Shop for the Holidays

Here are nine ways to protect yourself while shopping this holiday season.

The holiday season is an enormous economic event, so much so that the National Retail Federation estimates that holiday shopping represents as much as 30% of a retailer’s annual sales. But as a consumer, increased spending can leave you more vulnerable to theft and fraud.

However, there are steps you can take to guard against theft. Here are seven ways to protect yourself as you shop for the holidays.

1. Pay with a Credit Card

Stolen cash isn’t easily recovered, and a thief could use your debit card to empty your bank account. Credit cards offer better protection.

Even if your card is stolen, federal law dictates that you can’t be held liable for more than $50 in charges. That liability drops to $0 if you report the card’s loss before fraudulent charges occur or if it’s your card number, not your physical card, that was stolen. Many credit card issuers will automatically waive the $50 no matter the scenario.

2. Use a Virtual Card Number Online

Some credit card companies offer virtual card numbers, which can keep your information safe as you shop online. These temporary 16-digit numbers are linked to your account, but allow you to set predetermined spending limits and an expiration date. If a thief gets ahold of your virtual number, your exposure is limited and you won’t have to go through the hassle of canceling and replacing your card.

There are third-party virtual card providers out there if your credit card company doesn’t offer this service, but their quality may vary and they will require you to sign up for a separate service.

3. Protect Your Account Logins 

Your accounts are only as strong as your password. Use different passwords for every account; this way, if one of your passwords is compromised, your other accounts will still be safe. Many online retailers (including Amazon) now offer two-factor authentication, which gives you an additional layer of security when you login. 

4. Shop with One Account

It’s more difficult to track your spending when you use multiple credit cards or bank accounts. You should limit your holiday shopping to one account, which makes it easier for you to identify unauthorized charges.

5. Shop at Secure Websites

Be careful about the websites you visit. You should only make purchases at trustworthy retailers. Also, check for the secure padlock icon and an “https” at the beginning of the retailer’s web address, both of which indicate that the site is encrypted. This makes it more difficult for hackers to steal your information.

6. Monitor Your Accounts

You should be closely monitoring charges on your account all year long. While many financial institutions now offer account monitoring, their systems aren’t foolproof. Make sure to carefully read over your monthly statements to identify unauthorized charges.

7. Monitor Your Credit Report

Credit card numbers are replaceable, but if thieves get hold of really important information—like Social Security numbers, birthdates, and addresses—you could become a victim of identity theft. Check your credit report regularly to make sure no one is opening fraudulent accounts in your name. You can see your credit report for free at Credit.com.

Image: Eva-Katalin

The post 7 Ways to Protect Yourself as You Shop for the Holidays appeared first on Credit.com.

How to Get a ‘Burner’ Credit Card

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A new online payment service, which launched earlier this week, hopes to curb online shopping fraud by doing away with the need to share your credit card number just to buy something.

Privacy.com is creating virtual debit cards for online transactions for anyone who signs up for the service. The free app, which Credit.com reported on last fall, is now available for Apple iOS and Google Chrome.

“Credit card breaches are growing at an alarming rate and real people are getting hurt,” said Bo Jiang, CEO and Founder of Privacy, in a press release. “We minimize your risk of fraud and identity theft by creating virtual burner cards.”

Here’s an overview of how the app works: Users download the software, register and link an online bank account. There is no pre-loading of funds required and the service can be used anywhere Visa cards are accepted. Once downloaded, a browser extension enables you to create burner card numbers when you go to check out on shopping websites. The funds are then withdrawn from the linked bank account.

The service uses two-factor authentication, an extra layer of security that requires not only a password and username but also something that only that user has on them, such as a physical token.

Prospective Privacy.com users can sign up on the company website. Keep in mind, you’ll have to enter personal information, including your name, address, date of birth and checking account information, to get and use the app. You can find more information about Privacy.com’s security protocols on the company website.

Remember, some banks also give cardholders the option to create virtual card numbers to increase security while shopping online, so you may want to look into these options, too, if you are interested in increased online card security.

And, if you think your credit card or personal information has been compromised, or even if you don’t, one of the best things you can do to protect yourself from identity theft is to regularly check your statements and your credit for signs of fraud. You can spot sudden, unexpected changes in your free credit report summary, which is updated every month on Credit.com. Here’s what to do if you find you are a victim of identity theft.

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3 Times It Doesn’t Matter If You Use a Chip Card

EMV chip cards made their debut in the U.S. last fall, and some retailers are still struggling to get the technology implemented in their stores.

The switch from magnetic-stripe cards has meant not just new cards, but new payment processes, as well, which some folks have found frustrating. While the transition hasn’t been easy for some businesses and consumers, it means greater protection against fraud for a wide range of transactions.

Unlike the old magnetic-stripe cards, EMV chip cards create a unique transaction code that cannot be used again. For example, if a hacker stole the chip information from one specific transaction, it wouldn’t be usable again.

“Issuers do not want their cards to be used at point of sale with a magnetic stripe anymore, as the stripe is highly susceptible to compromise, where chip-based transactions are not,” Seth Ruden, a senior fraud consultant with Florida-based ACI Worldwide, said in an email.

While EMV technology doesn’t prevent data breaches from occurring, it can make it much harder for criminals, except in circumstances where the chip’s encryption capabilities aren’t used. Here are three scenarios where using a chip card won’t make your transaction any safer.

1. Online & Over the Phone

Buying some new shoes online? Ordering flowers over the phone from the local florist for your aunt’s birthday? These “card-not-present transactions” mean your debit or credit card details, most often including not just your name and card number, but also the three-digit CVV code, must be shared in full. The EMV chip card’s encryption is completely bypassed in these cases, and a chip card is no more or less safe than a non-chip card.

2. At Retailers Still Using Swipe Machines

While businesses that accept credit and debit cards could face increased liability for fraudulent transactions conducted with stolen cards or data if they don’t have EMV readers in place, there’s no law mandating that they actually have them. So, if you’re purchasing something at a store that still requires you to swipe your card, any additional protections offered by the chip aren’t doing you or the merchant (or the card issuer) any good.

“Anything that is magnetic stripe based is holding back the security efforts, and exposing the bank, merchant and the cardholder to prolonged risk-exposure during this transition period,” Ruden said in an email.

3. When Your Card Is Carbon Copied (Old-School Style)

Remember the old manual credit card imprinters? The merchant lays your card in the little slot, places the carbon copy receipt on top then pushes the imprinter handle over it, making that satisfying “ka-chunk” sound?

Or how about when the delivery guy runs that same carbon copy receipt over your card and runs his pen across it?

If you’re getting a delivery, or if you’re at a merchant who is experiencing a power loss or other digital failure, your chip card isn’t going to make a bit of difference in protecting the transaction from possible fraud. There are now pieces of paper with your card details on it that can be lost or stolen.

One of the best things you can do to protect yourself from stolen credit card information is to regularly check your account statements for signs of fraud. You can also spot possible fraud through sudden, unexpected changes in your credit score. You can keep track of that by getting your free credit report summary, which is updated every month on Credit.com and includes two of your credit scores. As soon as you identity something suspicious, act quickly to minimize the damage.

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