Skip to main content

Credit Card: Card Protection At Low Cost, Users Will Benefit

One safety rule many international travellers follow is blocking and destroying their credit cards after a trip. Judicious travellers know that fraudsters can easily capture the details stored on a card's magnetic strip and misuse it by making a new one.

HDFC Bank, Citibank and Axis Bank have already begun upgrading their customers to EMV cards. Others like Deutsche Bank will soon introduce the feature.

HDFC Bank have started providing EMV cards to our platinum card customers and others who travel abroad. This has proven to be more secure than earlier technology.

There are a number of other measures that regulator and card companies are using to protect cards against fraud or to free cardholders of liabilities in case of misuse.

Card Protection Plan (CPP): This is the most popular plan that card companies have resorted to. An independent agency sells this plan through all private and some government issuers in the country. CPP covers customers for liability arising in case of loss or theft of a card.

There are two plans that cover liability, up to `50,000 and `1lakh. It covers frauds that occur seven days prior to the customer blocking the card. There is no cap on the number of cards a person can register under a single CPP. However, there is a cap on how much cover a single card can get, in case of loss. In the classic plan, the sum insured of 50,000, the cover is on each card. In the premium plan, the sum insured is `1lakh and the cap on each card is 40,000. The insurance does not cover the card holder for online misuse or skimming of cards.

Tracking spending patterns: It card companies are studying the customer's usage pattern. Any deviation in this pattern and the company gets in touch with the customer to verify if the transaction was authentic. For instance, when the accounts of card holders, who usually avoid using their credit card internationally suddenly show such transactions, the issuers immediately call up the customer. The company even takes pre-emptive action in some cases.

Built-in insurance: Many issuers provide cardholders with insurance against loss of cards. Prominently, this feature is available for top-end customers like platinum card users. The card company ties up with an insurance company and pays a premium on behalf of the customer to cover against misuse due to loss or theft of card.

But both the cover period (prior to reporting loss of the card) and the cover amount could differ depending on the card company.

One needs to check with the issuer on the areas they would provide cover for. While some issuers cover the customer for any liability arising out of skimming, others may not cover online frauds. One should also know the amount the insurer will cover in case of such frauds.

Internet transactions: According to a Reserve Bank of India mandate, all card issuers have introduced a second-level authentication for credit cards. When a person uses his card for an internet transaction, he needs to enter a password for every transaction made on the net, after punching the card details.

To further reduce scope of fraud, some issuers have started sending out text message alerts to customers whenever there is a request to change the password.

Phone transactions: Next year on, all card companies will provide users a PIN for any transaction done on phone. To pay mobile phone bills or book airline tickets on a credit card, the customer just needs to punch the

Tool Feature

EMV Reduces skimming fraud

IVR PIN Reduce misuse for transactions done through phones

Behavioural patterns Card blocked in case of deviations from cardholder's usual spending pattern.

VBV/MCSC Second layer of security for internet transactions.

CPP *Covers misuse of card for the seven days prior to card being blocked.

Built- in insurance **Cover for losses due to theft, loss of card, skimming or misuse between 12-48 hours prior to the card being blocked.

Popular posts from this blog

Mutual Fund Review: Religare Tax Plan

Tax Plan is one of the better performing schemes from Religare Asset Management. Existing investors can redeem their investment after three years. But given the scheme's performance, they can continue to stay invested   Given the mandated lock-in period of three years, tax saving schemes give the fund manager the leeway to invest in ideas that may take time to nurture. Religare Tax Plan's investment ideas revolve around 'High Growth', which the fund manager has aimed to achieve by digging out promising stories/businesses in the mid-cap segment. Within the space, consumer staples has been the centre of attention for the last couple of years and can be seen as one of the key reasons for the scheme's outperformance as compared to the broader market. It has, however, tweaked its focus and reduced exposure in midcaps as they were commanding a high premium. The strategy seems to have worked as it returned a 22% gain last year. Religare Tax Plan has outperformed BSE 100...

Good time to invest in Infrastructure Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Good time to invest in infrastructure The Sensex has gained almost 10 per cent from May 15 till date, while the CNX Infrastructure Index has gained almost 17 per cent in the period. The price to earnings ( P/ E) ratio of the BSE Sensex is 18.96; for the CNX Infrastructure Index, it is 24.57. The estimated P/ E for next year is 14.04 for the Sensex. Of the 24 companies that make up the CNX Infrastructure Index, six have a P/ E higher than 20. Does this mean infrastructure is fairly valued? Or, has it run up quite a bit? According to experts, barring stray companies, the infra sector is fairly valued and it is a good time to invest. Even if some companies are facing debt restructuring problems, once interest rates come down and regulatory norms become flexible, they will start giving good re...

Stocks with a high dividend yield

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India) Stocks with a high-dividend yield can provide investors additional cash flow. More importantly, it is tax-free   With April 2011 just over, the 'earnings season' is well and truly here. This is the time most companies pay out a portion of their profits as dividends to shareholders. Since dividends are tax-free, they are an attractive income source with a select class of investors, who depend on these for additional cash flow. SIGNIFICANCE A company doing well and generating profits will usually be in a position to declare dividends regularly. Hence, a key parameter one should look at whilst investing in a stock is whether the company has a good dividend record. Typically, dividend yield stocks are large-caps and generally not capital-intensive. This is suggestive of the fact that the downside risk on...

Mutual Funds: Past Performance is not just everything

Many a times your agent / distributor / relationship manager tries to push you some mutual fund schemes by enticing you with a typical sales pitch…"Sir, this scheme has generated 20% returns in the past one year." And this sales pitch often gets louder when the market conditions have been favourable. Some of the agents / distributors / relationship managers have another unique way of luring you. They say, "Sir / madam this scheme has been awarded the best scheme award in the past by a leading business channel"... And hearing all these sales talks you investors very often get attracted and sign a cheque in favour of the respective scheme.   But please ask yourself do you hear these sales talks when the capital markets turn turbulent? Why is it so that your agent / distributor / relationship manager avoids talking to you during turbulent times of the capital markets and doesn't boast about returns generated by the respective funds or awards being conferred on t...

Systematic withdrawal plan

  Start Systematic withdrawal plan Online Although an SWP gives you regular income and saves on taxes in the long term, you cannot open an SWP on a scheme where you have an ongoing SIP   iStockPhoto If you are planning to take a sabbatical from work or are retiring soon, you may be looking at different investment options that give a regular income. Usually, a lump sum is invested to get regular fixed amounts later. Popular products include post office monthly income scheme, Senior Citizens' Savings Scheme and monthly income plans (MIPs). A lesser known option is the systematic withdrawal plan (SWP) in mutual funds. Recently, some funds have even removed the exit load on SWPs if you were to withdraw up to 15-20% in the first year, to encourage people who want to start investing in this instrument. Here is a look at what an SWP is. WHAT IS SWP? Many of us would be familiar with a systematic investment plan (SIP ), where a corpus ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now