Spotlight on safety: How card issuers are protecting customers

Dec 3, 2020

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Credit Cards Week banner for the 2020 TPG Awards

When you think “safety,” your first thought probably involves physical wellbeing. In fact, last week’s spotlight on safety as part of Airlines Week for the 2020 TPG Awards highlighted how carriers are keeping customers physically safe during the coronavirus pandemic.

But financial safety is also important. One of the reasons we advocate putting spending on a credit card — aside from the rewards you can earn and perks you can receive — are the protections that come with using a credit card over cash or debit.

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Today, I’m going to walk through the ways using a credit card — during the pandemic and when things are more “normal” — can help protect you financially.

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In This Post

 

Fraud detection services

Thanks to legislation such as the Fair Credit Billing Act and the CARD Act of 2009, consumers are entitled to certain rights and protections when they use their card. Notably, the Fair Credit Billing Act protects cardholders from being on the hook for fraudulent purchases and gives cardholders avenues for disputing incorrect charges.

However, credit card issuers have gone beyond the minimum requirements in recent years, making it easier than ever to monitor and report for fraudulent behavior to protect yourself and your finances. Most issuers and payment networks use artificial intelligence (AI) to help catch fraud early. But if you lose your card or believe you may be the victim of fraud, issuers have also made it easier in recent years to report fraud and put temporary freezes on your cards to prevent further damage.

For example, Amex lets primary cardholders and authorized users freeze an account. While you won’t be able to use the card on new purchases (helping to stop potential fraud), recurring payments such as autopay bills will still go through. This helps protect you without forcing you to change out half a dozen autopay credit cards across other accounts.

Related: Credit cards that offer a pause button and when to use it 

(Photo by eclipse_images/Getty Images)

Travel and purchase protections

Another way using a credit card can help protect you financially is through travel and/or purchase protections that many rewards credit cards offer to cardholders.

Travel protections — such as trip cancellation and interruption insurance — can help save you hundreds or even thousands of dollars if something goes wrong during your travels. There are restrictions on what is covered or not covered (fear of traveling due to COVID-19 is not a covered reason under trip insurance, for example), but in many cases, using a card with travel protections like this can offer peace of mind and potentially really save you if the worst-case scenario happens while you’re traveling.

Chase’s Sapphire credit cards take the cake when it comes to these protections, offering an impressive lineup that includes travel accident insurance, trip cancellation and interruption insurance, baggage delay insurance, primary rental car insurance and more. But Amex has stepped it up recently, adding more travel protections across many cards at the beginning of 2020.

Related: Best cards with travel insurance 

(Photo by The Points Guy)

Additionally, some cards come with purchase protections that cover you if an item is lost, stolen, or damaged. As you start holiday shopping for friends and family (or even taking advantage of deals for yourself), knowing you’re covered can especially be a lifesaver for online purchases that are shipped to you.

Going contactless

Contactless credit card technology actually helps keep you financially and physically safe. While this payment option has been slower to catch on in the U.S., the 2020 coronavirus pandemic has accelerated its adoption.

Like EMV technology, contactless payments with mobile wallets or your tap-to-pay credit cards adds an extra layer of security when you pay with something called tokenization. When you pay with a contactless credit card, each transaction is initiated through a token. This way card readers only have access to a one-time token rather than your actual credit card number and details.

Contactless technology also provides a way for you to potentially limit your risk of contracting COVID-19 while you are out and about. By going contactless at your favorite merchants, you eliminate a touchpoint in the payment process. And the fewer touchpoints you interact with, the less likely you are to transmit or contract the disease.

Related: 6 ways to pay without touching anything 

Bottom line

Rewards and credit card benefits are two things we talk about a lot at TPG. In fact, our TPG Reader’s Choice Awards are all geared toward highlighting which cards offer the best earning rates, redemption options and other benefits for cardholders across certain categories. But rewards aren’t the only reason you should be using a credit card to pay.

Card issuers have come a long way over the years in providing additional safety protections for cardholders, and I’m excited to see how technological innovations continue to improve safety measures for cardholders in the future.

Featured image by wk1003mike/Shutterstock

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15.99%-22.99% Variable
Annual Fee
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Balance Transfer Fee
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Excellent/Good

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