Keep Your Credit Card Safe

Credit Card numbers are hot items.  In the past year, we have seen at least 60 million card numbers stolen, and that is just from the major hacks that we know about.  Certainly, there are small companies whose credit card thefts don't make the news, and there are also hacks that have yet to be discovered.  While entering your credit card for online purchases might seem threatening enough, the threats do not stop there!  Your card is vulnerable even if you swipe it in the store, since many companies store your credit card number in a computer database for easy retrieval.

While you cannot completely eliminate the threat that your credit card will be stolen, you can take steps to reduce the chances of it happening.  While it only takes one hack at the right place to compromise your card, it also stands to reason that if fewer companies have your card, the chance of it being stolen is reduce.  Here are two ways you can keep companies from knowing your credit card:

1) Use PayPal - When you pay with PayPal, money is transferred from your account (or your credit card) to the merchant's account.  Since the merchant receives the PayPal payment, there is no need for the merchant to also receive your credit card.  Yes, your card still has to be entered on PayPal's site, but if you use it to pay at five different places, that means your card is only stored in one place instead of five.

If you don't want to use PayPal, you can consider some alternatives.  Google Wallet is a similar service offered by Google, and Visa is currently working on a similar solution for Visa cardholders.

2) Use Your Phone - Both iOS and Android have options that allow you to pay for transactions using a chip on your phone, Apple Pay and Google Pay.  Samsung is also coming out with Samsung Pay for use on its phones.  Using this payment method, the chip on your phone communicates with the chip on the card reader.  Your card is charged directly from the app, and payment is then made to the merchant.  Many stores have adopted these payment methods, and more stores will adopt them as they grow in popularity.

3) Use a Masked Card Number - A masked card number provides a one-time number for you to use.  The company providing the masked number will approve one charge, which will be forwarded to your account.  If anyone gets that number, the number will be declined if it is used again, and your actual card number will remain safe.  However, do not use a masked card number with a recurring purchase, like a website subscription:  your second month's subscription fee will be declined.

Many banks offer masked card numbers to their customers, and the practice will likely increase as theft of credit card numbers rise.  Also, if you use Blur to block online tracking (a browser add-on that I recommend), purchasing a premium subscription allows you to use masked cards.