U.S. Lags Europe on Credit Card Security

, ,

We can be as patriotic as we want to be, but today, the US lags behind other countries in credit card technology and consumer safety. Our current-day magnetic-strip technology is archaic compared to the chip-embedded cards of our European counterparts.  Though some larger US retailers are offering support of the “smart-chip” cards, a mandate for their use (and greater protection for the consumer) is down the road. (Click here for the original story on NPR).

According to Andrea Rock, a senior editor at Consumer Reports who wrote an article about the security gap in the credit card industry (emphasis mine):

“The account information that’s needed to make a transaction on American cards is stored, unencrypted, on a magnetic stripe on the back of each card,”

And that means, until the industry changes, you are at risk. In the mean time, here are a few steps you can take to increase your security:

  • Limit use of your debit card. The bank offers you less protection on debit transactions than credit transactions. Additionally, with debit cards, there is a PIN involved, potentially providing immediate cash access to your accounts by clever thieves. If fraud occurs, you are out the money until it is resolved.
  • Use your credit card instead.  It’s safer.  Typically, credit card issuers offer zero-liability for losses associated with unauthorized transactions. You also have a longer time frame to catch and report the fraud.
  • Set up automatic account alerts so that you receive an email or SMS text anytime a transaction is made. That way, if someone is using your card illegally, you are notified and can shut it down immediately before it becomes a big problem.
  • Let your credit card provider know that in order to keep your business, they need to update to the latest security technologies.

John Sileo is the award-winning author of Privacy Means Profit, The Smartphone Survival Guide and The Facebook Safety Survival Guide. Learn more at