How to protect your credit card information during the holidays

Credit card data breaches are on the rise, and the holidays are a busy time for fraudsters. But there are a few easy ways to avoid becoming a victim. 

Patrick Semansky/AP/File
Credit and debit cards on display in Baltimore.

Holiday shopping season is upon us. Many people have already bought gifts for their friends and family. If you’re one of those individuals and you used a credit card, you may not have put much thought behind the security of your purchases. Credit card data breaches are on the rise. Hotel chains and big retail stores have their payment databases Hackers and fraudsters are using elaborate methods to steal your data. However, that doesn’t mean you need to put all your money under a mattress and burn all your credit cards. As long as you stay on top of things, and keep a few tips in mind, you can avoid becoming a victim of fraud.

Don’t Save Your Payment Data

Have you saved all your payment data online so that your next checkout can be a lot quicker? You should delete it for two reasons. First and foremost is the security concern. If the e-merchant you store the credit card information with is compromised, your payment information may be leaked. Not every company adheres to the best security practices, and a data breach can happen to anyone. A giant database of credit card information is like a honeypot for hackers who can steal all of it and flip it for a profit. Many places will typically encrypt this information, so it becomes impossible for someone to steal without passing some strict verifications in place. However, some places will cut corners and not do any of this, making it easy for a third-party to break in and steal all the data.

Another reason to avoid saving credit card information is more practical, rather than security-oriented. You are less likely to commit impulse buys if you need to go through the process of entering your payment details. It's an easy psychological trick that can prevent you from buying something you shouldn't.

Unfortunately, even if you don’t choose to save payment information doesn’t mean your e-merchant didn’t store it somewhere anyway. This is where you need to rely on the next method for securing your credit card and debit card payments.

Monitor Your Credit Reports and Monthly Statements

Your next best defense mechanism against fraud is spotting it before it spirals out of control. To do that, you need to be diligent about monitoring your personal information. Keep an eye on your credit score, credit reports, and bills. If you notice anything unusual or out of place you should investigate. As long as you are quick about finding and reporting any fraud activity, any damages are almost guaranteed to be reversed. Even the information on your credit report can be amended, if you manage to prove it was the result of identity theft.

Use Mobile Payments Whenever Possible

One way your credit card information can be stolen is when hackers intercept the information that leaves your card when it's swiped. While more advanced than some of the more common fraud methods, this is still a threat to contend with. Mobile payments, like Apple Pay, use what’s called tokenization to prevent this. Instead of sending over valuable card data, like the number and CVV, Apple sends an encrypted token that can only be transformed into actual data with the proper authorization. You won’t miss out on any points when you shop with mobile payments, so use them whenever available.

Does All This Mean You Should Avoid Credit and Pay With Cash Instead?

Absolutely not. Credit cards have enough fraud-prevention mechanisms built-in that you should feel safe paying with them. Additionally, the above methods we described for reducing your chances of becoming a victim don't demand a lot of work on your part. Even if you put minimal thought and effort into being more security-conscious you will be in a good spot. That’s a small price to pay for all the benefits you can get out of card payments – including all the price protection, chargeback abilities, as well as rewards and cash back you can earn.

This article first appeared in ValuePenguin. 

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