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Do credit card security breaches, such as those that occurred at Target and Neiman Marcus last year, have you concerned about the safety of your accounts?
If so, you might want to take a look in your wallet and consider whether it is time to switch your go-to card. A recent report from Javelin Strategy & Research finds credit card security safeguards tend to be greatest for cards issued by financial institutions. Meanwhile, those issued by retailers fell short of other cards, particularly when it came to their fraud prevention efforts.
Best of the best for credit card security
Javelin, a strategic insight and research firm, looked at credit cards offered by 24 issuers and analyzed how well they did in three security areas: prevention, detection and resolution.
Overall, Bank of America was ranked best in class for security by receiving a 70 percent on Javelin's scoring model. By comparison, the average score for all issuers was 55 percent.
In addition to Bank of America, the following companies were recognized for achievement in a particular security area.
- Best in prevention: USAA
- Best in detection: Wells Fargo
- Best in resolution: Associated Bank and SunTrust
In addition, more than half of all the card issuers surveyed were ranked as one of the top five performers in at least one of the above categories. However, cards issued by retailers fell to the bottom of the rankings. The three retailer issuers reviewed placed lowest in prevention, with Cabela's WFB at 29 percent, Target at 22 percent and Nordstrom at 18 percent.
This is an indication of "inattention to factors that could help to lower these issuers' overall incidence of card-associated fraud," Al Pascual, Javelin's senior industry analyst for Security, Risk & Fraud, said in a written statement.
What happens if you are a victim
Credit card fraud was an almost $8 billion problem in 2012, and Javelin says it affected some 7.5 million Americans during that year. When it came to account takeovers in 2012, 36 percent of affected accounts were credit cards.
As part of its research, Javelin looked at how the 24 card issuers respond when their customer became a victim. According to their findings, most issuers will offer those affected access to their credit report but relatively few also provide monitoring services.
- Ability to order and pay for credit reports: 83 percent
- Credit monitoring: 38 percent
- Personal information monitoring: 8 percent
Fortunately, when it comes to liability for fraudulent charges, all cards are the same. Cardholders are only responsible for paying the first $50 of unauthorized charges. However, it may be up to you to report a potentially compromised account as soon as a card is lost or stolen.
Some credit card issuers may flag suspicious activity but don't count on the companies. Be proactive by watching your account statements closely and notifying your issuer immediately if you see an unauthorized charge.