U.S. Lags Europe on Credit Card Security

We can be as patriotic as we want to be, but today, the US lags behind other countries in credit card technology and consumer safety. Our current-day magnetic-strip technology is archaic compared to the chip-embedded cards of our European counterparts.  Though some larger US retailers are offering support of the “smart-chip” cards, a mandate for their use (and greater protection for the consumer) is down the road. (Click here for the original story on NPR).

According to Andrea Rock, a senior editor at Consumer Reports who wrote an article about the security gap in the credit card industry (emphasis mine):

“The account information that’s needed to make a transaction on American cards is stored, unencrypted, on a magnetic stripe on the back of each card,”

And that means, until the industry changes, you are at risk. In the mean time, here are a few steps you can take to increase your security:

  • Limit use of your debit card. The bank offers you less protection on debit transactions than credit transactions. Additionally, with debit cards, there is a PIN involved, potentially providing immediate cash access to your accounts by clever thieves. If fraud occurs, you are out the money until it is resolved.
  • Use your credit card instead.  It’s safer.  Typically, credit card issuers offer zero-liability for losses associated with unauthorized transactions. You also have a longer time frame to catch and report the fraud.
  • Set up automatic account alerts so that you receive an email or SMS text anytime a transaction is made. That way, if someone is using your card illegally, you are notified and can shut it down immediately before it becomes a big problem.
  • Let your credit card provider know that in order to keep your business, they need to update to the latest security technologies.

John Sileo is the award-winning author of Privacy Means Profit, The Smartphone Survival Guide and The Facebook Safety Survival Guide. Learn more at www.ThinkLikeASpy.com.

1 reply
  1. Val Brownridge
    Val Brownridge says:

    I am a UK citizen and recently visited New York. I used my credit card several times and was astounded at the lack of security and very nervous about using it. There us no chip & pin and signature’s are never checked. I witnessed US citizens leaving credit cards behind the bar when opening a tab, which is unheard of here and indeed would be viewed as negligent by the banks in the UK. A few days after returning, I was contacted by my bank as someone had tried to use my card, luckily, because I had informed my bank the dates when I was in the US the transaction was declined. I urge anyone using cards in US to be on their guard.

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