Preventing Your Credit Card Information from Being Stolen Online

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Everyone’s heard about what happened with Target and now Neiman Marcus. Hackers stole credit card data of people who shopped there. While there’s no fool-proof way to protect yourself 100%, there are a few you can do to minimize the risk.

Skip the store discount cards and use cash. 

Have you ever met someone that had a wallet full of store branded credit cards – Target, Macy’s, Banana Republic, and so on? In most cases you only get a nominal advantage, e.g. 5%. To put that in perspective, you would have to buy $1,000 worth of stuff from Target in order to save $50. That’s quite a bit of risk to add another entity that has your social security, bank information, and possibly a pin number tied to it.

Your best bet is to withdraw the cash you need and skip the store cards. They offer the discounts and perks because they’re betting on the fact that you will shop more with a card, and possibly fall behind on your payments. These corporations aren’t stupid. They’ve got research teams dedicated to figuring out and proving that they will come out ahead on the interest (i.e. the penalties, interest, late fees, and increased tendency to shop will bring in substantially more revenue than they will lose to what people “save” by using the card). If that wasn’t the case, they wouldn’t offer the card to begin with.

Create strong passwords.

Take stock of your online presence and make sure you have strong passwords to your accounts. This means your Amazon account, bank account, Paypal, eBay, credit card accounts, and any other accounts you have financial information stored in.

Avoid saving your credit card information for default payments on sites you rarely shop at (particularly travel websites).

Monitor account activity.

Always keep a close eye on your credit card and bank statements for suspicious activity. It’s a common trick for thieves to charge a small amount first to see if it gets noticed before trying to go for a bigger amount. It’s better to spend your time being diligent about this than spending hours on the phone after losing money to fraudulent activity.

Use an identity theft protection service. 

This helps in case your personal information does get compromised. I personally use Zander Insurance’s service.

Keep an emergency fund.

If you had a Target debit card get compromised, it means that whatever they charged came directly out of your bank account. While you’ll get the money back, there will still be a period of time where the money is not in your account. This is where having an emergency fund in a separate account comes in handy. Make it a goal to build that up.

 

Omar Usman

Omar Usman is a founding member of MuslimMatters, Qalam Institute, Muslim Strategic Initiative, and Debt Free Muslims. He is a regular khateeb and has served in different administrative capacities in various national and local Islamic organizations. You can follow him on Google+ or on Twitter @ibnabeeomar. Check out his latest project at Fiqh of Social Media.

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