Many people have a phobia about using credit cards online. They think it is unsafe to do so as hackers supposedly theoretically could steal the credit card numbers as the information passes through the networks. However, experience has proven the opposite to be true. In fact, using a credit card online is safer than using it in a store and even much safer than sending a check in the mail.
Sending a check in the mail is high risk. Indeed, many checks get stolen from mailboxes every year and are cashed. See a recent article in the WESH Television web site at http://www.wesh.com/news/man-arrested-in-central-florida-mail-fraud-scheme/30272208 for just one example. There are thousands of similar thefts every year.
In the example described in the WESH article, the thief reportedly stole checks, then altered them to reflect a different payee and a higher amount, and cashed them. Officials say he and his associates committed $30,000 to $40,000 in check fraud.
Sadly, many checks are not insured. The so-called “free checking accounts” are almost never insured. If there is no insurance, either the sender or the recipient loses the money. If you do insist on sending checks in the mail, do yourself a favor: check with your bank to see if your checks are insured or not.
In contrast, credit cards and debit cards are always fully insured, whether used online or offline. The use of credit cards is always safer than sending a check even though many people do not believe that to be true. In all cases, credit cards are fully insured against fraudulent use. For instance:
VISA credit cards and debit cards are fully insured against fraudulent purchases, both online and in person, with no deductible charge. Details are available at: http://usa.visa.com/personal/security/zero-liability.jsp
MasterCard (including both debit cards and credit cards) is fully insured against fraudulent purchases, both online and in person, with no deductible charge. Details are available at: http://www.mastercard.us/security.html
American Express: Use the American Express card online or off, and you won’t be held responsible for any fraudulent charges. Period. If someone uses your American Express card without your consent, you’ll never pay any part of the fraudulent charges. See http://www.americanexpress.com/us/content/fraud-protection-center.html?inav=footer_fraud_protection_center
Discover Card: You are not responsible for any unauthorized charges on your account—online, offline, anytime, anywhere. See https://www.discover.com/credit-cards/member-benefits/security-center/protect-account/
In all cases, the credit card holder is not liable for credit card fraud. He or she will never lose a dime, assuming the fraudulent transaction is reported promptly.
Do you need to pay the electric bill or telephone bill? Don’t send a check! Most corporations now accept online payments made by credit card or by direct payments from a customer’s checking account, another safe and secure method of sending money online. Bank transfers are used by the Social Security Administration, all banks, the Federal Reserve System, the Internal Revenue Service, stock brokers, and thousands of other financial institutions to transfer billions of dollars every day. If online transfers are safe enough for them the same method should be equally safe for you and for me.
I now have several credit cards and, with one exception, all of them send me an email message within seconds any time a credit card transaction is made. The email message includes the name of the store, the date and time of the transaction, and the amount charged. The one exception is Bank of America which only sends an email message once a day listing the previous day’s activities.
My smartphone is configured to read my email messages and to notify me when any new messages are received. In most cases, when I use my credit card in a store, the smartphone on my belt soon chirps when a new message is received from the credit card company. The message usually arrives about the time I am walking out the door of the store, sometimes even before I can place the credit card back into my pocket.
In the unlikely event that someone does steal my credit card number, whether in person or online, and then uses it fraudulently, I will know about any charges within seconds after they are made. A quick call to the credit card company will then resolve the problem within minutes and the charges will be reversed.
In the case of the Bank of America debit card, the message is not received until some hours later, usually in the middle of the night. That still provides plenty of time for me to call Bank of America’s Customer Service department to report the problem and to get the charge rescinded.
Again, it does seem ironic that using a credit card or debit card online today is safer than sending a check in the mail. Sadly, I suspect some people will continue to ignore the evidence and will continue to send checks to companies, friends, and relatives.
How much safety do you demand when sending money?