I have an honest question I can’t wrap my head around, and I’m curious if any OMAAT readers can help. Does anyone understand why people selectively stress over credit card fraud when sharing credit card details with others? I assume it’s just one of those irrational things, but I’d love to know if I’m missing something…
Let me state upfront that all of the below is specific to US-issued credit cards, based on the consumer protections that are in place here.
Credit card theft paranoia makes no sense to me
I always find it interesting how many people have a double standard when it comes to their concerns over credit card fraud, and I can’t figure out if people just aren’t thinking rationally, or if there’s something I’m missing.
Let me give an example. Some time back I spoke to someone who explained to me that he’ll only use a debit card for purchases abroad. Why? As he explained, because if he used a credit card and it got stolen, someone could “access” his full credit line, while if he used a debit card, they could only “access” the couple of thousand dollars in that account.
Or there seems to be a selective fear over giving credit card information to service providers, especially those running small non-brick-and-mortar businesses. I’m sure many people who work online and take credit card information can relate to this, where someone is convinced you’re just trying to steal their credit card details.
Why these credit card fears are irrational
Let me simply share my perspective — it’s completely irrational to have concerns about credit card “security.” Don’t get me wrong, you should be smart about things and shouldn’t wear a t-shirt with your credit card number on it, but that’s about it.
Paying by credit card is the safest way to pay, no matter how you share that credit card information. And while credit card theft and fraud are no doubt annoying, I think we’re collectively not great at assessing when we are at an increased risk of that, and when we aren’t.
Why do I find this fear of sharing credit cards to be so irrational? Let me explain…
Credit cards offer amazing fraud protection
At least in the United States, credit card companies offer unrivaled fraud protection. If your credit card is stolen or compromised and you report it, you’re not on the hook for the purchase.
That’s infinitely more security than if you were paying in cash (where your money could be stolen) or if you pay with a debit card (where your balance could be drained).
I’ve had credit card fraud occasionally, and it has literally never cost me a single cent (though it can be inconvenient). Not only that, but many credit cards have other built in purchase protection that covers you beyond just fraud.
Credit card fraud fear is so selective
What I also find interesting is the double standard when it comes to people being concerned about their credit card details:
- People have no problem paying with a credit card at a restaurant, and at least in the United States, the server often walks away with your credit card, and could easily get a picture of it; I’ve never in my life seen anyone say “wait a second, when you walk away with that credit card how do I know you’re not going to steal the details?”
- We see a countless number of data breaches at huge companies, including of credit card details, so there are so many ways your credit card details can be compromised, and there’s no point in even trying to control that
- All kinds of businesses still use credit card authorization forms that require faxing or emailing details, which comes with more security concerns than just outright giving someone credit card details
Bottom line
There are some things that keep me up at night. Whether or not my credit card will be compromised isn’t among those things. At least in the United States, credit card fraud protection is fantastic, and you’re not on the hook for purchases in the event your card is lost or stolen and you report it.
While everyone should be careful with credit cards, there’s literally zero need to be stressed about your credit card details being leaked. You’re infinitely safer paying with a credit card compared to cash or a debit card, regardless of the circumstances. You’re protected against fraud, you often get purchase protection, and hopefully you’re earning some great rewards as well.
Can anyone make sense of why some people are so paranoid about their credit card details? Is there anything I’m missing?
