Credit Card Safety Online

Category: Security

It's the age of e-commerce. Millions of people spend billions of dollars online every day. And the usual method of payment is a credit card. Some people hesitate to provide their credit card numbers to e-commerce sites for various reasons. Do these concerns have merit? Is it safe to use credit cards for online purchases? Let's find out...

Is It Safe To Use Credit Cards Online?

You wouldn't give your credit card info to just any stranger who asked for it, would you? But you do - every time you hand over your plastic to a waitress or store employee. How do you know that person isn't selling your info to some guy in a dark alley? Furthermore, dozens of strangers you never even meet get to see your credit card info as any charge slip you sign makes its way through processing and into a filing cabinet somewhere. What prevents people from using this info fraudulently?

Honesty, mainly; most people are honest. Fear of getting caught may sound more plausible, and that's part of it too. Whatever the reason, the odds of credit card fraud are acceptable to you or you would not be using credit cards at all. So are there any additional risks in using credit cards online?
credit card safety online

Your credit card info is transmitted over the public Internet each time you send it to a Web vendor. The good news is that most online transactions happen automatically, so no human hands or eyeballs come into contact with your credit card info. In that sense, buying online is actually safer than making a purchase over the phone, in a physical store, or in a restaurant. But it is possible that bad guys are "sniffing" the Internet data stream looking for strings of credit card data. However, if your data is transmitted over an encrypted Web link, the bad guys won't be able to read it without a prohibitive amount of effort and expense. So make sure any website where you make a purchase uses encryption!

Some Practical Safety Tips for Online Shopping

But how? As geeky as it sounds, checking for an encrypted connection is actually pretty easy. Look in your Web browser's address bar. If the address of the page you are on begins with "http:" then the link is NOT encrypted. If it begins with "https:" then it is encrypted - note the "s" before the colon in the second example? This indicates that the link is made using the Secure Sockets Layer protocol, a strong encryption method that frustrates almost any would-be data thief.

But what if the Web vendor *is* the bad guy? You may send your credit card info, securely, to the very person who wants to steal and use it. Well, that waitress could be the same kind of person; you take your chances. But there are signs that can warn you if it may not be a good idea to give your credit card info to a Web vendor.

A vendor who sells something illegal probably has few scruples about using your credit info illegally. So if you're buying drugs without proper prescriptions; illegal substances; child porn; or anything that you know perfectly well you shouldn't be buying, then the odds that your credit card info will be misused are presumably much higher. The "vendor" will assume that your fear of being exposed will trump your anger over being cheated.

Keep your eye on that address bar discussed above. It should always display the domain name of the site you're supposed to be on, i. e., "paypal.com," and not something even slightly different such as "payspal.com." The secure "https" protocol designator should not change to the unsecure "http" either. These are signs that your Web browser has been misdirected to an imitator or "phishing" site that exists only to scam people. (See my article Phishing Scams for info more on that topic.) When you finish entering the credit card data and press "submit" or "order," you may get an error message saying your transaction did not go through. But the error may be yours; you may have just given your credit card info to the wrong people.

Check it Out Before Checking Out

You can help to ensure that you're really on the website you intend by NOT clicking on links in your email, which may have been sent clever scammers. When in doubt, type in the URL manually, or use a bookmark that you know is safe.

And a little due diligence never hurts, either. Before making a purchase from an online vendor, check for online reviews, use the Better Business Bureau website, or do a little googling to see if the store has a good reputation. Trustmarks that appear on a site, such as the BBB, TRUSTe, VeriSign or McAfee Secure logos, can be a good indication that a merchant is legit. But even those can be bogus, so verify by clicking them.

Paying via Paypal gives consumers recourse against fraud online. If you get scammed, report the incident to Paypal. In most cases, they will side with the consumer and issue a credit, unless the merchant can prove that the goods were delivered as promised. Shopping with a credit card that limits your risk is also a good idea. Check with your bank or card issuer to see if they have a low or "zero liability" policy that protects you if the card is misused. Another option is the "disposable credit card" offered by Amex and other card issuers, which give you a one-time-use card number assigned to you for a specific purchase.

Let's sum it up... Credit card fraud can happen online or offline. But to minimize the risk of online shopping, remember these tips: Watch your address bar. Look for encrypted connections. Don't trust links in emails. And check reputation before you hit that Order Now button. These simple precautions will prevent most credit card fraud on the Web.

Do you have something to say about online credit card safety? Post your comment or question below...

 
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Posted by on 19 Mar 2010


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Most recent comments on "Credit Card Safety Online"

Posted by:

Andy
23 Mar 2010

The best advice I ever received about being scammed on the net was to use a designated card with a low limit, i.e. £200. If you do get caught you won't lose much.


Posted by:

bebobeck
23 Mar 2010

Thanks Bob. Good reminder. Very informative!


Posted by:

Jack Lass
23 Mar 2010

Thanks for the tips Bob. Several years ago I discovered that my credit card provider offered a new service called "virtual Credit Card." It is a small program downloaded to your computer. Every time I buy something over the web I generate a new credit card number that is valid only for that transaction. For many shopping sites the program will even input the required credit card data automatically.

I'm surprised that more banks and other issuers are not offering this or a similar service. Even if a vendor's files are compromised in some way the number I've used is dead and useless.

Anyway, thanks again for this head's up. Where there's a will there's a way...even for stealing.


Posted by:

Minnie
23 Mar 2010

PayPal isn't secure either. I signed up for it but did not use it immediately. Later that day I got an email supposedly from PalPal saying that I needed to confirm my data. I forwarded that email (without entering my data) to the PayPal site asking for verification that it was from them. That email did not come from them. I have never used PayPal and never will if someone can find out so quickly that I have signed up with them. Minnie

EDITOR'S NOTE: I know it seems like an amazing coincidence, but I'm sure there was no connection between your signing up for Paypal and that scam email you got. The Internet is flooded with those Paypal phishing scams -- I get several every day.


Posted by:

Zeke Krahlin
23 Mar 2010

PayPal has scammed many people, including myself. They did *nothing* when I reported that a seller never sent the product I ordered via eBay. So I unsubscribed from them (and eBay) forever.

Another good place to discover other people's experience with an online store or service is resellerratings.com.


Posted by:

WoodenNickle
23 Mar 2010

You might want to mention Web Of Trust.
I always look at the little icon before I ever go to a site to make a purchase.
If it's a green ring, I go to the site.
If it's yellow or red, forget it!


Posted by:

Jorge
23 Mar 2010

I'm surprised.. Your hints are the same I use when shopping on-line.
Here, in Chile, banks use double password to reduce risks of fraud...
Thanks, Bob.


Posted by:

jef
24 Mar 2010

I use virtual cards from Citibank. Good for one merchant and only good for the dollar limit that I set. Used at any other merchant--it gets refused. Even if somebody steals the merchant's database, they have the virtual card number and not the real card number, so they can't use it anywhere, and my real number isn't compromised.


Posted by:

Martha
24 Mar 2010

Discover offers the "disposable" credit card for one-time purchases. It takes just seconds for them to generate a new number.


Posted by:

Dan
24 Mar 2010

Stay away from the "fake, piece of trash credit card"===== debit cards!!


Posted by:

Mike
30 Mar 2010

In the U.S., federal law limits a consumer's liability for credit card fraud to $0, or a maximum of $50 under very limited, extreme circumstances. The only exception is when the consumer is actually engaged in perpetrating the fraud.


Posted by:

Kevin
31 Mar 2010

This was mentioned a couple times, but a virtual credit card is an important tool in protecting yourself against fraud. I recommend finding a bank that offers this feature. i.e. Citibank and Bank of America.


Posted by:

TEOH
15 Aug 2010

I recently on-line booking a hotel

the hotel reply via email to me to confirm the reservation.

In the email, stated all my details eg name,handphone# , card number , expiry date ,

& most importantly the last 3 digit of the card number which shall not reveal .

I had to call the bank to block my card , & pay to reissue a new card , & have to notify all the merchannts for my auto-pay.

I had lodged a complaints to this careless hotel but no response.

Can i know , is there any written rule that the merchant shall not disclose this confidential of the clients?

EDITOR'S NOTE: It's a violation of Visa/Mastercard rules in the USA to store the 3-digit CVV Code.


Posted by:

Darcetha
01 Apr 2011

I have a Visa credit card through my credit union. My credit union uses the cucardlock program. I can lock and unlock my credit card as needed, either by telephone or computer by using a PIN number.

I think this is a great program to have and all credit card companies should use this.


Posted by:

Kevin
14 Feb 2012

Bank of America had a feature call Shop Safe. I generate a credit card number for a certain amount unually just ovet the online purchase price. Once it is used it is done.


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Article information: AskBobRankin -- Credit Card Safety Online (Posted: 19 Mar 2010)
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