Convenience and perceived security is a primary concern for major credit card companies.  It is important to understand Mastercard and Visa earn fees by card issuance and per transaction charges.  These companies DO NOT incur credit risk, this lies with the the bank/card issuer issuer.  With that in mind, where is opportunity for profit derived?  Ease of use, quantity of use, and a perceived level of security by the consumer.

A bank can insure against their CC losses attributable to Identity Theft.  Although they may advertise that they are concerned with identity theft, and to a degree they are, they know more transactions through convenience will lead to more charges.  As a net result this leads to more revenue for the banks and the credit card transaction companies.  At present time these security measures are self-regulated by the Credit issuers.  (Didn’t we just go through these type of self-regulation issues with the mortgage lending industry?)  As we can hopefully see, the public’s perception is that these Credit issuers wish to eliminate fraud due to identity theft.

I shall offer an alternative case.  I submit that the card issuers wish you to use your card more, as they can collect more fees and interest charges.  There is nothing inherently wrong with this, this is their business.  However, they are making it more convenient and encouraged to charge while giving the consumer a mis-perceived level of enhanced security.  The Credit Cards company DO NOT want you to know what I am sharing with you.  Here is a quick video excerpt from Adam Savage from Mythbusters:

There is a current desire to move to RFID (Radio Frequency Identification).  The concept is excellent based on convenience.  But the current implementation is flawed.  There are a number of searchable articles you can find regarding card skimming with or without RFID.  But the FACT is that RFID make it easier for properly equipped criminals to take a massive number of Credit and Debit Card numbers in a very short amount of time. This video is a good example of how it works.

All I ask is that you know that RFID is convenient, yet that convenience does come at a potential cost.  Know how to protect yourself.  I use Credit Card sleeves for my RFID enabled Credit Cards, and the SkiPassDefender for RFID enabled skipass.  The one-time cost for this protection is an absolute NO-Brainer.

Jonathan Lawson has been an expert in the field of Identity Theft Risk Management since 2005.  Mr. Lawson has held dozens of education seminars for minors, adults, and seniors regarding identity theft and risk mitigation.

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