We live in a credit card golden age. Major banks and brands offer tons of cards that reward all types of personal and business spending. Whether the rewards are cashback, rewards points, or airline miles, it’s never been more attractive to use a credit card over debit or cash. You can use those travel points to book flights for your dream trip or use your cashback to fund your car repairs. Also, the sound that your classy metal card makes when you drop it is oh so satisfying.
However, it’s essential to know how to use our credit cards securely, or hackers will make our cards work for them. And they have been doing just that. Between 2019 and 2020, incidents of credit card fraud rose by 44%, and there were over a million cases of identity fraud in 2020 alone.
Let’s dive into a card’s security features and learn how to keep our finances secure.
- Credit and debit cards have a card security code (CSC) that card issuers use to verify that the online purchaser has the physical card – as a check of card authentication and to deter online fraud.
- A CSC goes by other names like CVV, CVC, or SPC that takes the form of a three-digit code or a four-digit code printed on the card.
- Practices such as reviewing your card statement and not saving your card data online will reduce the odds of identity theft and fraud.
Security Feature – Card Verification
What is CSC on Credit Card?
A Card Security Code or CSC is a three-digit code or four-digit code printed on a card that verifies the cardholder initiated a debit or credit card transaction for online transactions. It’s meant to prevent online card fraud. The CSC differs from the credit card number (15 or 16 digits) printed on the front of the card called a Personal Account Number (PAN).
Depending on the card brand and type of card, the CSC goes by a host of different names. Here are the most popular ones:
- CID – Card Identification Number
- CVC – Card Verification Code
- CVD – Card Verification Data
- CVV – Card Verification Value
- CVD – Card Validation Number
- SPC – Signature Panel Code
These fancy terms refer to the CSC number. No matter the name, the function stays the same.
Different Types of Card Security Code (CSC)
Visa, MasterCard, Discover, American Express, etc. are accepted worldwide. Each brand’s cards are chip cards with the account holder’s name, PAN, CSC, and expiration date.
Visa, MasterCard, & Discover
These brands feature a CSC printed as three digits on the back of their credit and debit cards. It is positioned to the right of the signature strip, but will sometimes be on the left side. And always be sure to sign your card before the initial transaction.
American Express cards stand out as they take a different approach. First, they use a 15 digit PAN instead of a 16 digit one. On their cards, the only place the card identification code lives is on the front as a four-digit code. It is a non-embossed number located to the above-left or above-right of the PAN.
Newer American Express cards can have the CVV printed on the front while the PAN, card holder name, and expiration date are on the back – such as with the Wells Fargo AmEx Propel card.
American Express has two different security codes – the other is the three-digit code or CID which is on the back of the card like any other card brand. Neither code is stored in the magnetic strip.
No card brand stores a CSC on the magnetic strip, so it is a secure value to authenticate against.
I use cards from each brand, so I make it my business to know how each card brand’s security features work.
Ways to Protect Yourself
Hackers use ever-evolving tactics to steal people’s data and use it for their own gain. Read on to learn how to thwart their attempts.
Use A Credit Card Where You Can
Using a credit card is a form of financial self-protection. It is safer than carrying a lot of cash around and you can cancel it if it’s stolen. If you use debit cards, you are giving a possibly compromised merchant or an online payment processor, or hacker the ability to directly charge your bank account.
Using a credit card protects your bank account as the credit card acts as an intermediary between your bank account and the merchant and the payment processor. The merchant bills your card issuing bank, and you pay off the bank each billing cycle. These funds are paid directly to the banks, which each have world-class cybersecurity operations.
Plus, fraudulent debit card transactions are more difficult to dispute and take longer to dispute than fraudulent credit card transactions. The longer it takes to correct a fraudulent transaction means that a malicious actor gets more time with your hard-earned money.
I use my credit cards wherever I can to better track my spending and wrack up points. I only use my debit card at an ATM or when necessary.
Use a Virtual Credit Card for Online Transactions
The major card brands and other companies offer virtual credit cards as an added security measure for online purchases. For example, MasterPass and Visa Checkout work for all Discover, MasterCard, American Express, and Visa cards. A virtual card acts as a go-between for your personal credit card and an online merchant. It has all the features of a physical card such as a card verification value. but is designed for a limited number of uses and to safeguard the data of your personal credit card. An attacker stealing the virtual card’s data points will not be able to exploit your personal account or credit line. If you do lots of online shopping, this security practice may be for you.
Use an RFID-proof Wallet
Your credit card has a magnetic stripe that digitizes data such as the PAN. A person using a hidden RFID (Radio Frequency Identification) device can walk by you and passively skim the data from your card’s magnetic stripe. Then, the hacker can use this data to make fraudulent purchases in your name. Other cards or documents such as a driver’s license or passport may be susceptible to an RFID scan. To prevent this, it is helpful to buy an RFID blocking bag or wallet. Though RFID skims may not be as large a risk as they seem, it’s better to be safer than sorry.
Personally, I use an RFID-proof wallet as it adds extra peace of mind while I travel to places where RFID skimming is more of a risk.
Limit your Number of Cards to What You Can Manage
Having multiple cards will help you maximize the rewards from your spending. But if you can’t keep track of all those cards and billing cycles, you could miss evidence of a fraudulent or questionable transaction. You may even forget to pay off your cards on time, hurting your credit score. Only take on as many cards as you are willing to manage.
Don’t Save your Credit Card Data with a Third Party Site
Choosing to store your card data with a third-party site is entrusting them with your cardholder data. Saving your data on an e-commerce site brings it into contact with not just their database but their other systems and third-party vendors. We don’t have visibility into the what or how of the processing of our stored data. In fact, Experian credit bureau reports that saving your card data online increases the risk of theft and fraudulent transactions.
Saving your card data with reputable online retailers like Amazon or Walmart.com is a safe bet – there is still a small level of risk. Consider using online wallets like Apple Pay, PayPal, or Google Wallet or manually enter your card info for authentication when shopping online. I’ve used some of these wallets and find them to be secure and convenient to use. They don’t store the CSC but ask for it each time I pay.
A merchant will not store the CSC code but only process it to verify your identity before processing the transaction. Also, manual entry of your card data will help cut back on impulse purchases – much to your wallet’s satisfaction.
Reconcile your Credit Card Statement
The best security measure is the least tech-savvy. Reconciling your statements every billing cycle and contacting your issuer bank about questionable transactions will help you identify and catch fraud that you can dispute with them. I found this practice helpful in tracking my budget and spending patterns. Using a tool like Personal Capital or Mint becomes more convenient to view your account statements.
The Bottom Line
The credit card ecosystem has baked security into the design of physical cards and their uses in physical and online environments. Knowing how your card’s CSC works and being wise to the hackers will keep your identity, credit score, and bank account happy.