This guest post was written by Go Banking Rates, bringing you the important personal finance news, tools and strategies for the best ways to secure a high CD or savings account rate. Follow them on Twitter at @GoBankingRates and on Facebook at /GoBRates
In an age with rampant identity theft and credit card fraud, we do whatever we can to protect ourselves and our money. That’s what most of us think, anyway.
Take a look at your credit card. See the white strip along the back? Is your signature there?
Does it matter?
You may be surprised: It really does. It seems to be common knowledge that by not signing your card, you are somehow making it safer. Leaving it blank or printing instructions to see your ID instead will prompt the seller to check your identification and disallow an impostor from copying your signature. The problem with this well-know “fact,” however, is that it’s false. Here’s why:
Don’t Write “See ID” Instead of Signing
According to CreditCard.com, you must sign the back of your card. Writing “see ID” or “ID only” on the back of your Visa or MasterCard, for example, is not only pointless, it technically invalidates the card. A merchant isn’t supposed to complete any transaction that uses a credit card lacking a valid signature.
Don’t believe it? The VISA Rules for Merchants handbook specifically states, “See ID or Check for ID is not a valid substitute for a signature…A refusal to sign means the card is still invalid and cannot be accepted.” But wait, there’s more. The handbook also explains that if this rule is ignored, the person who processed the transaction becomes financially liable should the cardholder dispute the charge.
Signature is for Legality, Not Security
Most people believe their signature is required on the back of their credit card in order to establish identity ‚Äî the signature confirms they are the true owner of the card. Technically, the signature can be compared against the one on the receipt if a fraudulent transaction is suspected. It isn’t main purpose of the signature, though.
Your signature is actually meant to solidify a contract between you and the issuer of your card. It’s not considered valid if left unsigned because you have not fully committed to the customer agreement. By leaving this space blank or writing something other than your name, then using the card to make purchases, you are actually violating the terms of your agreement.
There Are Better Ways to Protect Your Credit Card
Think about it: How often does a merchant actually ask for your ID, no matter what’s on the back of your credit card? Most of these people never bother. When they do, they don’t even compare the signatures on both cards, they only match the names and maybe check your photo, too. Signing the back is not going to make any difference in the safety of your card.
This means your best bet is to go ahead and sign it. At least your signature would be harder to forge on receipts and you’ll be in compliance with your credit card company’s terms and conditions. Then, take some real, effective actions toward keeping your credit card safe from fraud:
- Only carry what you need. Don’t put every piece of plastic you own in your wallet. Only bring a card if you plan to use it. If your wallet gets stolen, you won’t have to worry about canceling cards and reversing charges.
- Write everything down. Record all of your credit card numbers, expiration dates and bank telephone numbers and keep this information somewhere safe. If a card is stolen, you can have it canceled right away, hopefully before any charges are made.
- Check your credit report. Periodically reviewing your credit report will alert you to any fraudulent activity you were unaware of.