Whenever you make a purchase with your credit card, it’s not at all uncommon to have the business that you’re making the purchase with ask you about the credit card security code on the back. Typically, this is a three digit code that’s located on the back of your card. There’s no doubt that some people wonder exactly what the point of having this number is, especially when you already have a 16-digit credit card number and expiration date, along with the PIN number, at least in most cases. Rest assured, the idea isn’t to make you crazy or force you to pull out your hair in frustration. In reality, it’s actually to protect you from fraudulent purchases.
Although the credit card security code is somewhat outdated, especially for the more modern day cards that utilize a chip, it still appears on the back of virtually every card. It’s just one more piece of information that the credit card companies use to ensure that the only person using the card is the one who is authorized to use it. For example, it’s almost always used when you make a purchase online or over the phone. The idea is that someone might be able to hack into your credit card account and get your credit card number, but this number is not provided in the same batch as your credit card number, making it harder for hackers to get a hold of. In theory, someone that has illegally obtained your credit card number will have a much more difficult time getting your credit card security code, meaning that they shouldn’t be able to use your card unless they physically possess it in their hands. In other words, the idea is to reduce the number of fraudulent charges and make sure that you don’t end up paying the price for someone else’s dishonesty.
The reason the number is somewhat outdated in today’s world is because most credit cards have an electronic chip that generates its own credit card security code. In fact, this type of security code changes every time you run your card. It’s completely computer-generated so it makes it virtually impossible to figure out what the exact code is going to be. With that being said, you still need your credit card security code for any purchases that you make online. Even when you have a chip card, they can’t run the chip when your ordering something through the internet or on the phone. Therefore, these merchants still have to rely on the credit card security code that appears on the back of your card.
Unfortunately, hackers are sometimes able to get a hold of the information, despite the fact that credit card companies and merchants alike have done everything they possibly can to make it more difficult for them to do so. The good news is that if you pay attention to your credit card statements and you report any charges that you didn’t make early on, you’re almost never held responsible for those charges. Better yet, most credit card companies will eventually reverse the charges so you won’t end up paying interest on something that you didn’t actually buy. The trick is that you have to pay attention to your credit card statement and notify your creditors as soon as you notice a problem. If the incident happened six months ago and you just noticed it last week, there’s no way you’re ever going to convince anyone at the credit card company that it was a fraudulent charge and you had nothing to do with it. That’s why it’s so important to stay on top of things and pay attention to all of your financial statements every time they come in.
As far as the credit card security code is concerned, it has managed to make things far more secure than they used to be. If you stop and think about the earlier days of the credit card where someone just laid a card on a piece of carbon paper and the information was copied, things have actually gotten a lot more secure. Back then, somebody could steal your card, run it and get away with it, whether there was any available balance on the card or not. In the end, the person whose name appeared on the card usually got stuck with the bill, even if they didn’t have anything to do with creating it. Thankfully, times have changed.