More and more credit cards have the chip enabled RFID (Radio-Frequency Identification) technology. This uses radio frequencies that allows your card to talk to the store’s card reader. This is convenient because you can easily just wave your card by the payment terminal and it will complete the transaction. It is much faster than inserting the card in a chip reader or swiping your card and waiting.
The fear is that someone with an RFID reader will be able to steal your card information by getting close enough to you and your credit cards.
Let’s look deeper and assess the risk.
Your Liability with your credit card company
When it comes to credit cards, you have very good consumer protection. You are only legally liable for up to $50 per card due to fraudulent activity. My experience and those of many others is that you pay nothing. Credit card companies want your continued business which is primarily why they just remove fraudulent charges once notified.
What this means is that you have very little to worry about if you report fraudulent activity on your credit card.
Text notifications are a great tool to help you always monitor your cards. If you go into your credit card account settings, you can sign up for text notifications for all charges and payments. The beauty of this is that if someone uses your account fraudulently you will immediately get a text which allows you to contact your credit card company and report the bogus charge. I have used this feature more than once to identify and report fraudulent activity.
The key is to call the number on the bank of your card and report the fraud as soon as you get a text that shows an unauthorized transaction. Your credit card company will immediately freeze your credit card and will then issue you a new card and number.
Credit Card Fraud
As we just discussed, using text notifications to know as soon as your card is used is a great tool to combat fraud. Credit card fraud has many forms. Once someone gets your name and card number they are off to the races.
Since you are not liable for credit card fraud, the credit card company is the one that eats the bogus charge. You are not liable and the merchant gets paid. The credit card company takes the loss. This loss is ultimately passed on to credit card users in higher interest rates. If the credit card companies can reduce fraud they will save lots of money, which is why it is in their best interest to create the most secure payment process possible.
RFID-Enabled credit cards
RFID credit cards were developed to make a faster and more convenient payment process for consumers. Instead of swiping a card or inserting it and waiting, the RFID process works by holding the card next to the machine. The machine immediately reads the card. Studies have shown that the RFID process takes only about a second to complete compared to up to 10 seconds or more when swiping a card.
How do you know if you card is rfid technology or even if the retailer can process contactless cards? Your card will contain the symbol that looks like a sideways wifi symbol if it has RFID. The same goes for the retailer.
The security enhancement with the RFID cards is the RFID chip. These cards create a unique authorization code with every transaction. This unique number can only be used once for that transaction only. What that means is that the scam artist can’t do anything with your card number at a retailer.
A scam artist would have to get within 6 inches of your card and would be unable to get any sensitive information other than a unique one time code that won’t be useful. Your name or other personal details isn’t transmitted.
So, do you still need a way to protect your rfid cards from rfid skimming? Do you need a special wallet?
Apparently the technical term for this protection is “Faraday Cage,” which is an enclosure used to block electromagnetic fields. It is named after Michael Faraday, the scientist that invented it back in the 1800’s.
Based on what we have discussed so far, the risk is very, very low. Risks are much higher doing banking transactions using public wifi, performing online purchases, and not freezing your credit, than from a scammer randomly trying to grab limited RFID data by getting too close to you.
Regardless, if you want to take more precautions, there are RFID wallets on the market that claim to have this rfid-blocking technology. Do your research and read reviews thoroughly before making a purchase. Some of these wallets might work and some may not.
Experts also say that if you wrap a card in heavy-duty aluminum foil that is quite effective in blocking your credit card from card skimming.
Debit Card Fraud
Debit cards carry a lot more risk than credit cards when it comes to fraud. This is because a credit card issuer will remove any fraudulent charges on your card.
Since a debit card is linked directly to your bank account it is high risk! If someone gets access to your account and extracts money, you may never see that money again. In order to reduce the risk, use a debit card with an account where you keep just a minimum amount of money. That limits any potential loss to your small bank balance. Some people will have a separate bank account just for debit transactions and other payment systems such as Venmo and Cash App. This limits any potential fraud to that account only. Your main savings or checking account would not be at risk.
Be sure to not have overdraft protection. That is a way for banks to make money off of you, and it puts you more at risk for fraud. You don’t need it! For example, if you have overdraft protection that processes a charge that takes your account below zero, you just helped a criminal take more money than you actually have in your account. Yikes! To top it off, you get charged with an overdraft protection processing fee. Well, at least the bank made money 🙂
Paying with your Mobile Phone
With most smart phones now you can add your credit card information to the virtual wallet in the phone. This includes your credit card numbers. This allows you to use the phone’s rfid feature to act just like contactless credit cards.
I have my credit cards stored in my phone’s virtual wallet as well as the physical ones. This gives me the flexibility of paying using my phone or with the physical cards in my real wallet. If I forget my real wallet I can still use my phone to make a purchase.
My understanding is that the phone does not remit the card information until you select it for payment at the payment terminal. In other words, if you have not initiated payment, someone with a scanner would not be able to pick up any information.
People love the convenience of their phones, and being able to lock the phone with a code, face or finger print technology to keep others from getting access. I suppose one could argue that if someone hacked into your phone electronically, they might be able to get access to your card information. But again, you are not liable for fraudulent credit card transactions, so there is no real risk to you.
Contactless Technology is here to stay
Because of the speed of process transactions at the point of sale terminal, and the very low risk of rfid theft on consumers, it appears that paying with rfid-enabled cards and smart phones are here to stay. They will likely get more and more popular as consumers get more comfortable with it.
Summary: How to protect your RFID credit card from scanners
- You are only liable for up to $50 per credit card if you report fraud. The reality is you usually end up paying nothing and the card company eats the loss. They want your continued business!
- Text notifications are a great tool to monitor all your credit cards. A text is sent every time your card is used.
- You should be more concerned about fraud when online shopping or using public wifi, than being concerned about an rfid scanner
- Freeze your credit to prevent someone borrowing as if they are you via identity theft
- An rfid-blocking wallet is supposed to provide rfid protection. They may or may not work. Read the reviews. Aluminum foil might work just as well.
- Debit cards are a lot riskier than credit cards when it comes to fraud. The bank balance linked to the card is at risk.
- Smart phones now have similar technology to make the same contactless payments with your credit cards as you can do with a physical card
- Contactless Technology appears to be here to stay. This will likely become more popular over time due to the convenience