Some Credit Card Miscellany

Earlier today, I got a phone call from the local po-po; a Detective told me that a few months ago, my credit card was skimmed by a waiter at a well-known steakhouse chain. Yeah, bummer. Luckily, he didn't use it yet (that we know of), but apparently he was working with another guy to clone the cards and run them for cash advances, prepaid cards, etc.

I know a little bit about credit cards. I've been in the payments processing industry for close to twelve years, and have had at least some exposure to pretty much every facet of the industry--card issuing,  downstream processing, fraud and security, chargebacks, etc. It's a constantly-shifting, complex, layered world, and understanding the rules is extremely difficult. I don't talk about that much here because, well, it has nothing to do with my writing hobby and, frankly, my company can be a bit uptight about employees discussing shop publicly. That said, a lot of what I know--and can share--is publicly available, and can be helpful to people like you (yes, you), who have not spent a decade learning the inner workings of credit card processing but do like to whip out the plastic now and again.

(Note: I work on the processing side; I'm not an expert in issuing, which means that I can't tell you how to best reduce your rate, how to defer your payments, explain why your issuer just raised your rate, which cards are best, or anything to do with credit scores...I work exclusively with companies for processing.)

Without further ado, a top-of-mind, non-exhaustive laundry list of things that may be helpful for a card user or someone who accepts cards.

• If you are nervous about using your card online, get over it--it's just as safe as in person transactions. But, just like any business transaction, know who you're dealing with. If you are typing your credit card number into a website with a dubious domain name or odd website, be wary. If you don't know who you're dealing with, go somewhere that you do know--amazon.com, bestbuy.com, etc. Your card is far more likely to get stolen by an employee than from a hacker.
• For in-person transactions, try to keep your eye on your card as long as you can; and, although it's not always feasible, consider only going places where the card is swiped at the counter or at the table--somewhere where you can always see the plastic. Cards have two important sets of data: the account info (number, expiration, CVV code) and the data on the magnetic stripe. The latter is far more dangerous--with a card number, someone can run a few transactions online or over the phone, but it's going to take time for the merchandise to arrive, and the thief has to provide a physical address for goods. Magstripe data, however, enables the thief to create new cards that can be used in-person for purchases, cash advances, pre-paid cards, etc. To get that data, however, the card has to be swiped, typically in a small, handheld device called a skimmer. Know where your plastic is, and your risk is much lower.
• Another aspect of skimming is ATM fraud. If the slot on the ATM machine that you're about to slip your card into looks exceptionally bulky or unusual, beware. There are a host of fake card acceptors and ATM faceplates that will not only skim your magstripe, but have a small camera to record you pressing the PIN number. Another clue: these transactions will often fail (card not read, try again later, etc).
• In most cases, merchants are not allowed to add surcharges to credit card transactions (PIN-based debit is a different story). This is less a fraud issue as it is merchants taking advantage of consumers not having read the 1,000+ pages of Visa/Mastercard operating regulations. If they want to add $.50 to your card bill for buying a beanie baby at that mall kiosk, dispute it. If they insist, you can walk away, or you can accept the charge and fight it later with Visa/Mastercard or your local attorney general. Also, although I'm having trouble finding the regulation number, it has historically been prohibited to set minimum purchase amounts for cards.
• Fighting a disputed charge can be a chore. Although it doesn't always work out that way, chargeback rules are stacked more on the consumer side than the merchant side. But, just like with insurance adjusters, if they have to back out charges and refund your money, the issuer and acquirer stand to lose money--so do your homework. Call your issuer right away, get names, document everything. Follow up. Send letters. Get manager names. Read the above-linked dispute regulations. Build a strong case.

I could go on for days...there is a lot of info out there. Again, this is all publicly available information, and only a few of the aspects of cards and fraud. Fraud is rare, but it does happen, and some of these points may help.

And, I would be more than happy to take questions in the comments. Hit me.