I hand over my credit card all the time without thinking. When I'm shopping, paying for a meal, or paying for any of the other million things I have to pay for, it's my go-to.
But the reality is that these days, it's far from the smartest way to pay. I'm more conscious than ever about a server walking away with my credit card, and the number of retailer and database breaches makes it feel like my 16 digits are constantly at risk.
The solution is to start using a digital wallet. I resisted for so long, but once I finally switched, I realized exactly what I'd been missing all along.
Start using a digital wallet to boost your security
Keep your cards in your pocket
When shopping in person, don't pull your credit card out of your wallet unless you absolutely have to. Use your phone instead. iPhones and Android phones alike can make digital payments. All you have to do is add your cards to Apple Pay or Google Wallet and tap your phone against the same payment terminal you would normally tap your card against. If you have a Galaxy phone, you can use Samsung Wallet instead.
Each of these apps keeps your credit cards hidden from the retailer, instead creating a virtual token, which is effectively a temporary replacement number to funnel the payment through. The retailer can't track your shopping patterns because your number changes each time.
If the retailer suffers a data breach, you don't have to cancel and replace your credit cards. The numbers you used when making purchases are already gone anyway. For example, VISA found that its tokenized payment methods (tap-to-pay, virtual cards, etc.) were a core part of a 30 percent reduction in online fraud, while also reducing some types of PoS fraud by 90 percent.
I was skeptical at first, but now I get why digital wallets are safe to use, because those enormous fraud reduction figures don't lie.
Consider using temporary virtual burner cards
If a virtual card gets burned, the damage is limited
Some digital wallets are less helpful for online shopping. More websites than ever accept Google Wallet, for example, but many still don't. That number drops even further with Apple Pay.
For an option that you can use on any website, consider using a virtual card instead. Your bank might offer this feature, but if not, you can sign up for the service through a company like Privacy.
Privacy's cards are accessible through a web browser and via a mobile app — and yes, virtual cards are also safe to use. If you're using Privacy, when you're ready to make a payment, you can create a new card with a single tap for one-time use or one for a single retailer. The latter is helpful for recurring subscriptions, such as Netflix. It's also great for places where you shop frequently but don't pay a monthly fee, like Steam.
Unlike digital wallets, these virtual burner cards are not tied to your existing physical payment cards. Instead, you connect Privacy to a funding source such as your bank account or debit card. Because Privacy lets you track how much you spend on each virtual card, it can also help with budgeting.
At the very least, use PayPal
Add a degree of separation
If you want to use your existing payment cards, stick with a service like PayPal, at least when you're shopping online. PayPal has been around for decades and is accepted at many websites. It lets you save all your payment cards in a single PayPal account, so you don't have to re-enter your cards every time you check out. PayPal does not share your actual card numbers with sellers, protecting you in the event of data breaches.
Unlike digital wallets such as Apple Pay, Google Wallet, and Samsung Wallet, which are accepted anywhere that accepts NFC payments, you can't use PayPal at every store. It's up to the seller whether to accept PayPal. Amazon is a prime example of a place that doesn't. So, while PayPal can be part of how you secure your cards online, you can't bank on it as your only solution.
Shopping online has long come with added risks, but since retailers collect and store some of our financial data, in-person shopping isn't without risk either. But with the right tools, you can reclaim some of your financial security. Or you could stick to cash.