The Evolution of Credit Card Usage
The journey of the credit card has been remarkable. From being a simple plastic card to a vital tool integrated with advanced security features like EMV chips, cards have evolved significantly to become a secure credit card. This evolution has also seen a change in how credit card fraud is perceived and tackled to protect the cardholder. Credit monitoring has become more sophisticated, and card issuers now offer more robust cardholder benefits to combat an unauthorized purchase.
The Role of Credit Card Company in Fraud Prevention
Card issuers play a pivotal role in safeguarding cardholders from credit card fraud and safeguarding users' credit card accounts. From issuing a secured credit card to working with credit monitoring services that offer a credit report, a card issuers are at the forefront of fighting credit card fraud.
Understanding the policies of your card issuer, including how the credit card issuer handles unauthorized charges and account takeover scenarios, is vital for every cardholder. Credit card issuers have now added access to some credit bureaus so cardholders can do credit monitoring and checking their credit history.
Understanding Credit Card Security
A card has become one of the most common forms of payment. Quick to swipe and easy to carry. Most cardholders barely think about a secured credit card or give it a second thought. However, some cardholders have been turned away when trying to make purchases at grocery stores with their card once the merchant notices that their physical card has not been signed. Why is this happening, and should you sign the back of your physical card?
Signing Your Credit Card: A First Line of Defense?
Many people believe that signing on the back of a physical card is a security design meant to protect you from credit card fraud and identity theft. This would seem counterproductive to some. Wouldn't having your signature visible on your card make it more likely to cause an account takeover and cause unauthorized charges to happen?
The truth is, the signature requirement is designed to protect the credit card issuer. Your signature on the physical card indicates that you accept the credit card issuer's terms of service and doesn’t do anything to make your card transaction or other purchases more secure.
As more grocery stores offer self-checkout and online shopping becomes more available for you to use your card without anyone checking if the you own the card, there is less interaction between the merchant and the cardholder, which causes higher chances of unauthorized charges and credit card fraud. That means that there’s an even slimmer chance of the merchant noticing that your card isn’t signed, suggesting that it might not even seem necessary to sign your physical card.
Where to Sign Credit Card
On the back of your card, you will find a white, blank strip. This is the signature bar of your card.
To sign, use a felt-tipped pen. This pen will allow the ink to stay, prevent it from smearing, and prevent it from soaking into the plastic.
Sign your name the same way you would sign it on any other document. When a merchant compares your signature from one document to another, they should look the same.
Writing “See ID” on Credit Card
An alternative to signing on the back of your physical card is to write the words “See ID” or “Ask for a photo ID” on the back of your card. This would require whoever is using the physical card to provide the merchant with a photo ID proving ownership of the card.
However, this method has many drawbacks.
- Signatures indicate that the card is active. Many card issuers use signatures on the back of cards as a way of making sure that the cardholder has agreed to the company’s terms of the agreement. A signature on the physical card is a sign that the card is valid and useable.
- Merchants may refuse an unsigned physical card for payment. The signature indicates that the card is valid and active. Using an inactive card for payment may be against the grocery store's owner's policies or the conditions between the business and the card issuers.
- Showing an ID makes the process slower. Showing your ID is an extra step that many card types, such as debit cards that use PIN numbers, consider unnecessary.
Do I Have to Sign My Credit Card?
Credit card companies in the US have recently moved to adopt more secure payment methods. Europay, Mastercard, and Visa (EMV) cards, also known as “chip & PIN” or “chip & signature,” have taken the traditional swiping methods away and replaced them with two alternative forms of payment:
- “Chip dipping” or “insert chip” method
- The near-field communication method
These card features allow cards to have higher security than traditional magnetic strips to make it a more secure card. The new card features also make it more easier for everyday purchases, only requiring card users to either insert their cards into readers or simply touch and-go.
Additionally, the use of card features like Radio-frequency Identification (RFID) chips has seen a rise. RFID chips are embedded into the plastic of the physical credit card and offer an even more secured credit card method for identity theft.
Protecting Yourself from Credit Card Fraud
In addition to taking the necessary steps to make sure your card is valid, you should be proactive against possible credit card fraud. Here are some of the most important tips to keep in mind.
- Never let other people use your card or give complimentary access to avoid account takeover.
- Only carry the cards that you need for travel purchases, everyday spending, and other purchases.
- Stay paperless to secure your credit card accounts and use online banking.
- Set your online banking to send you fraud alert, card details, and alerts for combined purchases, whether physical or online purchases.
- Check your online banking often to see your credit card accounts, card statements, and for fraudulent activity.
- Track credit journey, online purchases, and spending habits to notice any unauthorized charges.
- Check with credit bureaus to prevent credit card fraud by looking for identity theft, fraudulent activity, and credit history.
Read this article to learn more about how to protect yourself from credit card fraud.
Protect Your Credit Card
A secured credit card is only as secure as you treat them. Remember to follow all responsible card habits to avoid identity theft or credit abuse.
If you’re struggling with high credit card debt, spending habits, or credit card fraud, talk to our debt counselors today.
Check Your Credit Report Regularly
It's crucial for every cardholder to periodically check their credit report and card history with the three major credit bureaus. Credit check is key in detecting credit card fraud or any fraudulent activity. Credit monitoring of your credit history, credit line, and statement credit helps make sure that your account remains open, especially those you've personally opened to remain secure and active. Checking your credit report with these bureaus can alert you to unauthorized charges or changes, allowing you to act swiftly to protect against credit card fraud.
Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined credit.org in 2003 and has over two decades of experience in the industry.
