How can young people protect their credit cards?

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Data recently released by the Reserve Bank of India (RBI) reveals that credit card spending has hit a record high year-over-year in India. With the increase in transactions, credit card users, especially new users and young users, are advised to be extra careful in handling these financial products.

Here are some tips for eliminating security issues when using your credit cards.

Avoid sharing your credit cards

A credit card is like your banking password. Only you are authorized to use it. You cannot give it to relatives or friends. Giving your credit card to a stranger can put your financial health at risk. In India, cards are highly secure, with checks and balances such as PIN authentication. But each country has its own checks and balances. In a foreign country, the risks could be higher. When transacting offline in places like stores and restaurants, make sure your card is swiped in your presence. In your absence, there is a risk of abuse.

Protect your password

Keep your password out of reach of strangers. Protect information such as online login information, passwords, card numbers and CVV. If this data is breached, there may be misuse. Avoid using public computers and networks to enter sensitive financial information. For added security, you can also change your credit card‘s online login PIN and password every three or six months.

Restrict daily credit limit

Most credit card companies offer the option to set the transaction limit on your credit card through their app or online platform. It can help you control domestic and foreign transactions, set maximum daily spending limit, lower your card spending limit, disable or enable transactions on your card, etc. These security features can reduce the risk of fraud.

Check credit card statement and credit score

Check your credit card statement regularly as it helps you spot unauthorized transactions. You can report instances of such transactions to your card company and dispute unauthorized activity. Likewise, you should regularly check the credit score report. Sometimes people are unaware that unauthorized or fraudulent lines of credit may have been opened in their name, and there are unpaid debts, ruining their credit score. Checking your credit report can help you identify these activities and take corrective action.

Tokenize credit cards

Tokenization is the process of replacing your crucial card information with a unique code that can help protect your credit card against fraud like data theft. During an online transaction, tokenization can protect your card information because the original information such as the card number is not saved with the merchant. The RBI recently extended the deadline for card tokenization to September 30, 2022. Card users can voluntarily adopt it to enhance their credit card security.

Have your credit cards blocked

Despite all precautions and security measures, if your card data is compromised or a fraudulent transaction occurs, you should immediately contact your card issuer and have the card blocked. You can also block your credit card through your credit card mobile app or online platform by contacting customer service. Report the incident to your card issuer and follow the necessary procedures to recover the lost amount.

You can improve your card security by taking a few more steps, such as avoiding using your credit card on suspicious websites, never clicking on an unknown link received via email or text message. Never share your sensitive card information with anyone, even if you get a call from someone posing as a bank official or someone from the card company’s customer service department.

(The author is CEO, Bankbazaar.com)


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