I have written a number of articles over the years about credit card safety. Links to some of my earlier articles are available at the end of this article.
I have always stated that the safest form of payment, especially for payments online, is a credit card. Despite the myths that still float around, credit cards are the safest form of online and offline payment. In fact, stealing credit card numbers on the web is very difficult. It is far easier to steal credit card numbers in person at stores, restaurants, gas stations, beauty shops, and other local business establishments. Security experts report that credit card theft is far more common in person than it is online. Of course, stealing checking account numbers is even easier.
I have written that credit card use on the web is fully insured and that many banks insure credit card usage in person and via mail order as well. If someone does use your card fraudulently, you simply call the credit card company, and they quickly delete the charges. You never pay a dime for fraudulent charges.
Sending checks through the mail is even more risky. Tens of thousands of checks get stolen from the postal service each month. If your check is stolen, you probably will lose the money from your checking account. Very few banks insure their customers' checking accounts. I rarely write checks; I pay almost all my bills online.
You can imagine my surprise today when I opened a newly-received credit card bill. The statement listed six ATM withdrawals that I did not recognize. All were made on the same day, and all withdrawals were made at a single ATM about 500 miles from my home. In addition, each withdrawal had extra fees assessed by the credit card company for use of a "foreign" network. In this case, "foreign" is not referring to international use. It simply means that the ATM used was on a different ATM network from the one used by the credit card company.
The fraudulent charges totaled $660.00.
Of course, I immediately called the credit card company at the 1-800 number listed on the bill. After a two or three minute conversation, the lady on the other end of the phone said that she would credit the $660. That includes both the withdrawals and the added fees. She also stated that she would cancel my present card immediately and would send me a replacement card that has a different number. She said I should receive the new card within 48 hours.
The same lady also offered to help me get a cash advance at any bank in the U.S. immediately, should I need one. I declined that offer.
In short, I am pleased that what I wrote earlier is now proven to be true. Indeed, all credit card charges are fully insured. In fact, this incident didn't cost me a cent. It did cost me about five minutes on the phone after dialing a toll-free number. I was surprised at how brief the call was. I was not asked for any extra proof or documentation. I consider that one phone call to be a minor inconvenience.
As to where the credit card number was stolen: I have no proof. However, it is interesting to note that I don't use this particular credit card very often but did use it to make a purchase in a local department store last month. The fraudulent charges were made the following day in an ATM machine 500 miles away. I suspect that a dishonest store employee copied my credit card number during my in-person use of the card, then sent the numbers to cohorts in another state for their use.
Today's experience verified the safety of credit cards for me, and I am more determined now than ever to use a credit card for all online and offline transactions. My faith in the process has been affirmed. I hope to avoid personal checks wherever possible.