Guarding your Plastic

America has changed. In the land of opportunity, where the dollar spoke volumes, we find ourselves in a new situation. The dollar is speaking in the third person, conspicuously absent from many of our wallets. We've changed our habits to a new, more convenient way of doing things: the credit card. Simpler than counting out dollar bills, lighter than carrying around a pocketful of nickels, and safer...kind of. While you're less likely to fall victim to a picked pocket while riding the bus, you're much more likely to have your identity pilfered by someone who may never even have seen your face.

Paper or Plastic?

Cash has obvious benefits. When you're using cash for a purchase you can use some simple math skills to make sure that you're being treated fairly. You know that a $7 purchase paid with a $20 bill results in $13 change. Credit cards aren't so simple. When you hand your credit card to a waitress at a restaurant, you're not sure if she's taken down your number and photocopied your signature. You can see what she's charged you right then and there, but you don't know for sure that she won't charge you something else when she gets to the mall after her shift.

Security

Credit card companies are coming up with ever more sophisticated ways of dealing with these security risks. Mastercard International and Visa collaborated on a set of guidelines called the Payment Card Industry Data Security Standards. These guidelines impose strict regulations on all transactions taking place between merchants and credit card companies. While some merchants have not been fully compliant with the new regulations, more of them are falling in line every day, and that means more security for your card. Discover Card has also come up with it's own security system. Their program is named the Secure Online Account Number Program. It works by creating one-use code numbers for each online purchase you make. These numbers act as stand-ins for your true account number. When you make an online purchase you use this stand-in number which is then verified by Discover Card, and linked to your real account number. After the purchase is made, the account number is discarded. This eliminates third party viewing of your account number. With only you and the employees at Discover ever seeing your real account number, it makes you less likely to have your identity stolen by merchants or their employees.

Online Credit Card Security

Many merchants are taking their own steps to ensure the security of their customers' accounts. You may have found that many online merchants require that you use a shipping address that matches your billing address. This makes it more difficult for thieves to use your card to buy goods. They may get the card, but in order to pick up goods they have purchased with it they will have to go to your house. A situation most thieves would not put themselves in. In addition, VeriSign, an online security company, has developed SSL (secure sockets layer) security technology. This system gives online merchants 2 key numbers, a public and a private key. The merchant uses the public key to encode information it wishes to send out, and the private key to decode information it wishes to read. Recent advances in VeriSign's technology has offered encryption up to 256-bits, providing a nearly un-guessable number of code combinations. There will always be a race between security measures and those who seek to break them, but with a little attention and prudence, we can keep ourselves relatively safe from danger.