Knowing Your Credit Card Security Features

by : Peter Kenny

With the ever-present threat of identity theft mounting each year, credit card companies are in a battle to provide the most up-to-date security features for their cards. The reason for this is that credit card fraud remains the most common form of identity theft despite the large numbers of people who make secure purchases every day.

As a result, many card companies have to develop the means to deter those who would seek to exploit the weaknesses in the current credit card system. One of the consequences of this research is the development of credit card security features. Nearly all of the major credit card companies employ one or more security features in the cards that they distribute and some offer option add-on security services to provide an extra level of protection.

The goal of any credit card security feature is to provide viable safeguards to protect your personal information and mitigate the damages to personal credit if the card falls into a criminal's hands. Most of these services are offered free of additional charges by the card companies while the aforementioned add-on features may end up costing the cardholder a small fee for implementation. At the present, there are four security features options that are receiving a great deal of attention.

Zero Liability Policies - Offered entirely free of charge by most major card companies, the zero liability policy has become an essential security feature. Essentially, when you discover an unauthorized purchase has been charged to your account, your card company's zero liability policy reimburses for any stolen funds so that you will not be left paying for the fraudulent activity. Of course, the amount of coverage under established policies will vary from card company to card company. Some issuers may limit how many claims upon unauthorized expenditures the cardholder may declare within a certain timeframe. Other restrictions may apply in other circumstances.

Temporary Purchase Numbers - This is an innovative feature. A temporary purchase number is actually an alternate or virtual credit card number that is attached to your credit card account. These numbers are typically for one-time-only purchases made by telephone or online. By using giving out this "fake" number, you are protecting your actual card information from potential identity theft risks if the services you are buying from are not as security as they seem. An added benefit with a temporary purchase number is that you can set a specific limit on how much can be purchased using the number.

Photo Security - This form of security feature is catching on with many cardholders. The inclusion of the person's photo on the card helps to deter others from using your card at checkout counters or in restaurants. Your card becomes another form of photo identification that can be checked against other information.

Identity Theft Insurance - These are insurance policies offered directly by the credit card issuer that provide coverage for cardholders who have suffered identity theft. They help to mitigate the costs associated with trying to resolve credit affairs. The areas of coverage include payment of legal fees, any wages that were lost, as well as telephone billing related to resolution of your credit affairs. There are various types of coverage and limitations that may apply, so you should bear that in mind when considering this feature.

Obviously, these four features are just a few of many credit card security features that are being developed or improved to combat the threat of identity theft and keep you, the cardholder, protected.