Sep 01 2008
Credit Card Risks
I would like to share some risks in credit cards from the card holders point of view through my personal experiences. Chances of frauds in credit cards are always more when the card is used at merchant establishment physically than when it is used in online purchases through merchant accounts. It is primarily because the merchant has all the information stored on the charge slip and while swiping the credit card he can always see the CVV (Card Verification value) number and memorize it for future. To add on to that, he has your actual physical signatures also (on the charge slip) which may easily be forged while committing any fraud. Although physical signatures may not required while using the credit card for online payments.
This situation has personally happened to me. I had gone for dinner with my wife. After a good and sumptuous meal, I paid the check through credit card . To my surprise, next day I received an SMS from my credit card issuing company that online purchases have been made for $ 798. Thank god, that at the time of application for credit card, I opted for mobile banking where each transaction of my credit card above $ 100 was to be reported through an SMS. So immediately I dialed my customer care number and got the card canceled.
So there are some learnings to avoid such kind of situation and losing money. First and foremost thing would be to erase the CVV number from your credit card so that it is not clearly visible to anyone. Just like the ATM PIN number, card holder should remember this CVV number also. So even if the merchant has your personal details on the charge slip he will not have the CVV number and without this there may not be any chance of misuse of the card.
Another thing would be to subscribe to mobile banking as I mentioned above. Most of the banking companies offer it free of charge so you would come to know about the credit card transactions on real time basis. Alternatively you can check about your credit card spends through online banking where by you will come to know about your last transaction made. Atleast you will not be waiting till the credit card statement which come as a shock to you. Lastly, I would recommend that you should use your credit card only when you dont have the enough cash. Try and settle your bills through cash only to the extent it is possible.