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This article was last updated Oct 09, 2017, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
These days professional thieves understand that the key to profitable crime lies in following the money, and that the easiest way to do that is not to walk into a bank but to hack into a credit card account. They can get in and get out without leaving a trace, and vanish with your credit and your cash.
If you are unaware of these high tech thieves, you could lose a lot of money in no time at all. Before putting yourself in that sort of financial risk, you need to know how to protect your credit cards from cyber theft. The information below explains what to look out for so you can avoid any sort of problems.
Credit Card Skimming
An increasingly popular way to steal cards is by installing a skimmer into the inside of the slot in a card reader on an ATM machine or gas station pump. This is a computer recording gadget as thin as a credit card. When you insert your own plastic into the slot this device quickly swipes it and stores all your credit card data, just as you might copy data from your computer hard drive using a USB stick or a computer disc. Later the thief who installed the illegal device returns, retrieves it, and pockets the credit card data of everyone who has recently used the slot to make a purchase or other transaction.
Signs of Credit Card Skimming
Police suggest that when using any of these card slots you should always check to see if the slot is loose or not tightly and snugly attached as it normally should be, or if the slot your card fits into just feels oddly sloppy. You may also see a larger piece attached over the top of the slot. That's a telltale sign that they slot has been tampered with, and if you encounter any of these things you should notify the police or the proprietor and then go to a different machine to complete your transaction.
RFID Credit Cards
Another devious way to pick the lock on your credit card security system is to take advantage of new credit card scanning technologies that use radio frequency signals. RFID or radio frequency signals have been used for about 10 years or more as a means for tracking packages and items within an inventory. You may have wondered how companies like FedEx can track packages so easily, and one tool in their arsenal is these small radio frequency emitting chips that they can use to locate a package.
You've probably purchased clothes at the mall that had tags inside that were long and thick, about the same size as the paper scrolls inside a fortune cookie, and those are also RFID chips. They can send a signal to alert the store if someone tries to shoplift, but the signal is so weak that once you get your merchandise home it is no longer traceable. Now, RFID technology is being used in some "smart cards" issued by credit card companies. Instead of sliding your credit card through a card reader you simply hold it near the reader and a very weak radio signal transmits your card data. Tap and go card technology now used in Japan and some other tech-savvy countries works on a similar principal. You tap your smart phone against a card reader and it automatically retrieves your credit card information.
Problems with RFID Technology
The security loophole with RFID technology is that if someone passes you on the street or is standing next to you on a subway, in line at a restaurant, in a nightclub, or anywhere else they can also scan your credit cards if they have an RFID enabled reader in their pocket or messenger bag. Thieves are already stealing credit card information in this stealthy and non-invasive manner simply by snatching the card number out of thin air via radio transmission.
Many high security departments within the United States government, for example, use identification cards powered by RFID, and they also require those who use those cards to keep them protected inside an RFID blocking sleeve or protective cover. So although it sounds rather sci-fi, the RFID threat to credit card security is becoming more realistic as card technologies and card readers become more sophisticated.
How to Protect from RFID Theft
RFID blocking credit card sleeves, which are little envelopes or covers made of paper-thin Tyvek fabric, are a simple and practical tool that sounds like a gimmick but really isn't. Even if you are not concerned about skimmers stealing your card information through the walls of your purse or wallet, these RFID protectors still serve another purpose. Most conventional credit cards still rely on an old-fashioned magnetic strip. If the strip is damaged, scratched, or exposed to a strong magnet then it gets scrambled and your credit card will not work when you swipe it. But an RFID protective sleeve is one of the best ways to ensure that your magnetic strip does not get damaged.
You can usually ask your bank for Tyvek sleeves, because many of them offer these to customers to help them protect ATM and credit cards. The teller may not be familiar with RFID technology or the trademarked Tyvek fabric, but if you ask if they can give you a little sleeve made for protecting your credit card they'll understand. You can also buy Tyvek sleeves online, and they are usually a dollar or less apiece. Just do an online search for "Tyvek credit card sleeves" or "RFID sleeves" and you'll find what you need.
Crime rings are becoming extraordinarily sophisticated and they can rip off your plastic and then sell your card information to buyers and crime rings scattered all over the globe. This happens within a matter of minutes and hours, not days and weeks. Before you know what hit you they can do irreparable damage to your credit history, your financial identity, and your bank account. That's why it is particularly important that you treat your plastic like gold, and protect it with updated methods, strategies, and tools.
The recent Equifax breach
On Sept. 7 of this year, it was announced that 143 million consumers were impacted by a security breach at Equifax that occurred from mid-May to July. This breach involved the leak of highly sensitive information: names, Social Security numbers, birthdates, addresses and, in some instances, driver's license numbers. Scarcely a month later, on Oct. 2, Equifax released information stating that an additional 2.5 million people had been affected, bringing the tally to 145.5 million.
This breach has raised safety issues for millions of people. And it has left many wondering how to protect their personal information and safeguard against identity theft.
Some suggestions follow:
Although there is no definitive way to ward off identity theft, there are several steps you can take to protect your information. It’s important to stay on top of your credit and be aware of any changes to your credit report. You are entitled to a free credit report each year from the three credit bureaus (Equifax, Experian, and TransUnion). Request your reports at annualcreditreport.com, the only source authorized by the federal government.
We recommend checking one report every three months, unless you fear you’ve been a victim of fraud. In that case, you’ll want to check all three at once for any suspicious activity. In addition, most credit card providers provide your credit score for free; this is another way to monitor your credit and be aware of any unexpected changes.
After the Equifax breach, it may also be a good idea for you to initiate a credit freeze. A credit freeze restricts access to your credit report, and MagnifyMoney, a personal finance site also owned by LendingTree, has put together a comprehensive guide on how to initiate one.
When your credit is “frozen,” if someone tries to apply for credit with your information, the bureaus won’t release that data without your authorization and will send you a notification. This is key: You must freeze your credit at all three credit bureaus for the freeze to have the greatest effect. Also be aware that a credit freeze does not mean ironclad protection from identity theft. And if you plan on opening a new line of credit after you initiate a freeze, you will need to either thaw or unfreeze your credit. Thawing your credit may require fees, depending on the state in which you reside.
Another important step is to set up fraud alerts with each bureau and with your credit card issuer(s). This will alert you of any suspicious activity on your account(s).
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.