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Credit Card Blog - Credit Card Safety Features

 Thursday, 16 November 2006

This post isn't about ways to keep your credit card safe. It's about ways your credit card keeps itself safe. So you won't be hearing about keeping your PIN away from your card. You will be hearing about transaction monitoring. On to the features!

Signature Strip

The signature strip on the back of the card is its first line of defense. Merchants are supposed to check the signature on the back of the card against the signature on the receipt. If the signatures don't match, the merchant is supposed to refuse the transaction. Visa and MasterCard go a step further by saying that a card is not valid unless it's signed. 'Check ID' is a not a good substitute for your signature. Suppose you lose your unsigned card and a thief finds it. All they need to do is go get a fake ID in your name and then their signature will match every time. Adding 'Check ID' in addition to your own signature is a good idea.


This is the 3 digit number printed in the signature strip on Visa and MasterCard cards or the 4 digit number on the front of American Express cards. When you make a purchase online or over the phone, the merchant is supposed to ask for this number to help verify that the customer has the card in their physical possession.

Verified by Visa

Visa has a program called Verified by Visa whereby you can enter a password on Visa's site to verify that you are the card holder when making a purchase. When you enter your credit card info on a merchant's site and click on checkout, you'll be sent over to Visa's site, where you enter your password. You then get sent back to the merchant's site to complete your transaction. Unfortunately, this depends on both merchant participation and on you having a Verified by Visa identity set up. If the merchant doesn't participate, or you don't have an identity set up, your transaction will still go through. However, it does provide an extra layer of security when both conditions are met.

Liability Limits

Generally speaking, you are only liable for, at most, $50 worth of fraudulent charges made with your card. Your particular issuer may set lower limits. Check your agreement for details. Visa has gone a step further for online transactions. They offer zero liability for any fraudulent charges made online.

Transaction Monitoring

Credit card issuers and networks monitor your transaction history. If all you've ever used your credit card for is buying gas twice a month at the station down the street, and suddenly there's a $6000 charge originating in Bucharest, Romania, it's going to raise a red flag. (Unless, of course, you live in Bucharest, and you buy $6000 worth of gas twice a month.) Address changes, name changes, shipping address being different from billing address and other factors can also raise flags. So if you're going to do something unusual with your card – like finally take that European vacation you've always dreamed about – it's a good idea to alert your issuer before you go. If you don't, you might find yourself in a foreign country unable to use your credit cards.

Photo Cards

This is just a credit card with your photo on it. It provides a merchant an easy way to verify you're the rightful card holder. However, some issuers are phasing these out as they've found the extra costs associated with producing photo cards out weigh the benefits from reduced fraudulent charges.

Your credit card isn't just a piece of plastic. It's helping to keep your credit safe.


Thursday, 16 November 2006 22:29:51 (GMT Standard Time, UTC+00:00)  #     
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