It seems like hardly a week goes by that we don’t hear about another credit card security breach.
Although consumers aren’t usually held responsible for fraudulent credit card charges, having your information stolen can still wind up being a huge headache.
Why you should use only one credit card for automatic bill payments
I learned that the hard way about 10 years ago when someone stole my wallet from a gym locker.
Since then, I’ve started keeping a list of all the credit cards in my name, as well as the accounts (cell phone, subscriptions, insurance) that are linked to each credit card.
Here’s an example:
This list is so important because if your payment information is compromised in a data breach, you’ll be issued a new card with a new account number.
That means bills you’ve set up automatic payments for must be updated to avoid late fees and service interruptions.
‘Autopay and everyday’ strategy
My credit card list has worked for me, but money expert Clark Howard recently talked about an even simpler strategy that personal finance writer Greg Karp came up with: “autopay and everyday.”
In an article for NerdWallet, Karp suggests using one card for autopay and a second card for everything else:
Designate one of your credit cards for trusted recurring autopay accounts, such as cell phone and utility bills, software subscriptions and news sites. Then don’t use it for anything else. That way, this card isn’t being processed by restaurant servers, gas station pump readers or online retailers — common ways thieves steal numbers.
Using this tactic, you wouldn’t have to update your recurring expenses if someone stole your everyday spending card because those charges are on your autopay card.
This two-card system is all about reducing the hassle after a credit card is stolen.
Set up transaction alerts with your bank
What else can you do to stay ahead of the fraudsters? In addition to monitoring your financial accounts daily, many banks will send you a text or email when you make a purchase.
My Discover card is set up so that I get a text every time my card is swiped:
This is a great way to be notified of potential fraud immediately after your card is used. Check with your credit card issuer to see if it offers similar transaction alerts.