5 Ways to Protect Yourself From Credit Card Data Breaches

By Christa Avampato. Last updated 30 October 2014. 0 comments

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Every week the news seems flooded with yet another example of a retail data breach. These data breaches have exposed the credit card information of millions of consumers.

While retailers scramble to respond, here are five steps you can take to limit any personal impacts of these data breaches. (See also: Keep Your Card Safe While Shopping Online)

1. Make Your Debit Card a Credit Card

A debit card doesn't do a thief any good unless he or she knows your PIN number. If you swipe your debit card and tell the cashier it's a debit, the system will prompt you for a PIN number. Instead, tell the cashier it's a credit card and you'll sign for your purchases rather than entering a PIN. This way your PIN number will never be in the payment system, so it can't be compromised by a data breach.

2. Avoid Credit Monitoring Offers

The moment a new data breach is exposed, scammers get to work. Many will whip up fake companies and begin spamming people with email offers of free or low-cost credit monitoring services. The scammers trick people into turning over their credit card information with promises of fraud protection when these scammers are actually the fraudsters. Do yourself a favor and delete these emails the moment you see them in your inbox. You can monitor your own credit by getting your credit report free once a year from each of the credit agencies. (See also: How to Get a Truly Free Credit Report)

3. Review Your Charges and Create Usage Alerts

Each month, carefully review your statement to make sure you recognize all charges on your card. The moment you see something unfamiliar, report the issue to your credit card company.

Most credit card companies will take responsibility for suspect charges if reported to them in a timely fashion. Many credit cards also give you the option to set up alerts so that you know when your card has been used. If you receive one of these alerts when you haven't used your card, contact your credit card company immediately to report the fraudulent charge.

4. Request New Plastic

If you learn that a retailer where you shop has had its payment data compromised, call your credit card company and ask for your current card to be canceled and a new card issued. This way if a fraudster does get hold of your card information, it won't work and you'll be protected.

5. Look for Different Ways to Pay

Most retailers offer multiple methods of payment. There's always good ol' cash. Increasingly, retailers are accepting alternative payments such as Google Wallet, PayPal, and specialized apps such as the one created for Starbucks customers. These methods offer another layer of protection for customers because they serve as an intermediary between the retail payment system and your card information. With them, your card information never hits the retail payment system and can't be compromised by retailer data breaches.

Data breaches are unlikely to subside. Under current Federal law, retailers are not responsible for any fraud that occurs if the card data of their customers is compromised. They don't pay a penny, so they have no financial incentive to improve their systems. It's true that they will be inundated with bad publicity, but in time that publicity subsides. Take action using the advice above and be your own best source of protection.

Have you ever been a victim of credit card fraud? What steps have you taken to protect yourself?

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