Storing a credit card as a payment method — think keeping your card on file with your favorite takeout place so you don’t have to enter your card details the next time you order — can make online transactions easier and more convenient. But there are risks involved with storing your cards this way.
For example, data breaches can jeopardize your card information and lead to fraudulent charges. Plus, not all companies comply with data guidelines that can help to protect your information.
But there are ways to protect yourself and steps you can take to help keep your card information safe when storing your credit card as a payment method. Here’s what to know.
Risks of storing a credit card as a payment method
There are a number of ways your card can be stored online. For instance, while checking out with a merchant, you may be prompted to create an account and link a card for a faster checkout in the future. Similarly, based on your settings, your phone or computer’s “autofill” feature can automatically fill in your card information during checkout if you’ve used the card on the device before.
Digital wallets, like Apple Pay or Google Pay, also allow you to store cards and use a smartphone or smartwatch to make purchases. These processes can make online transactions smoother, but they come with potential safety risks you should be aware of.
Data breach or fraud
Storing your card online can increase the likelihood that your card information is exposed and used for fraudulent purchases in the event of a data breach. This can happen even when cards are stored on password-protected devices, and especially when you use your card on public devices or over public WiFi networks that can be hacked.
The Payment Card Industry Data Security Standard (PCI DSS) outlines safety measures companies should adhere to in order to protect cardholders’ data when they store your card information. But not all businesses fully comply, and even with compliance, breaches can still happen that put your information at risk.
Issues with updating your card information
Keeping your card on file can often lead to hiccups in the event that your card information is updated due to a product change, card expiration, fraud or the like. For example, if you get a new version of your credit card with a new number, but you’ve used the previous version with a specific merchant, your issuer might automatically update your card number in that merchant’s system — even if the previous card was replaced because of fraud.
This can lead to unauthorized or unexpected charges on new cards.
How to protect yourself
You can take steps to mitigate risks when storing your credit card information online:
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Use password-protected devices. Storing your card information on a publicly accessible computer can increase the risk of fraud. It’s important to keep your cards only on personal devices like your home computer, and to set up strong passwords and multi-factor authentication to further protect your card data.
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Pay with a digital wallet. Although digital wallets are a way to store your card, they offer stronger protection than storing your card on file with a merchant. That’s because when you pay with Apple Pay or Google Pay, there’s a built-in process called “tokenization”, which generates a random one-time code that conceals your actual credit or debit card number.
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Use a virtual number. Like digital wallets, virtual card numbers can help protect your card data because they don’t require entering your actual card number online. Instead, they’re one-time-use card numbers that you can request through your issuer, payment network or app, and use to make an online purchase.
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Check where your card is stored. As noted above, when you get a new card, an issuer may automatically update the new card information wherever your old card had been previously stored. This can be particularly dangerous if you ordered a new card due to fraud, because fraudulent charges may continue on your new card. Some issuers offer tools that show cardholders where their card is stored or what subscriptions their cards are linked to. For instance, through Chase’s app, under “Account Services,” cardholders can see where their card is currently being stored. You can also check your browser settings to see whether you have cards stored on your computer or phone.
