Safeguards After the Target Breach
The Target credit/debit card breach was a wake-up call to take greater measures to protect our accounts on an ongoing basis. We should assume this will happen again.
Here are some steps that may help:
1. Use cash. But be careful about the amount of cash you carry routinely. (If you are trying to reduce spending overall, using cash may be a good strategy because it makes you more aware of your spending, and provides a built-in limit.)
2. Use a credit card, NOT A DEBIT CARD. According to the Federal Trade Commission, you have much greater protections with a credit card. Your risk of loss is $50 for a credit card, but NO limit in some cases with a debit card. You must review debit transactions promptly and notify your bank within 2 days to limit your loss to $50. If you don’t notice the theft until 60 days after your statement is sent, you are responsible for the entire loss.
3. Review your statements promptly, every month. (This also has the beneficial effect of making you more aware of your spending, if you are trying to save more.)
4. Some credit cards can notify you via text or email when a transaction has occurred. If yours provides that service, sign up.
5. Consider a “freeze” or “lock” on your credit. The FTC has information about how to do it. Note that you’d have to freeze your credit at all three credit reporting agencies, and there can be fees. A freeze doesn’t prevent fraudulent charges, but it prevents a thief from opening a new account in your name.
The FTC site has other useful information related to identify theft and fraud.