False Credit Card myths

September 23, 2011  /  Lifestyle

It would be tough to riffle through any wallet or purse and not be come across 2, 5, or even 6 credit cards within. The world has become obsessed with credit cards with the average household in most western countries hovering around $10,000 of credit card debt. Due to the complexity of larger financial institutions, this has many credit card carriers curious as to some of the pervasive myths that have come to surround these innocuous pieces of plastic.

Many people are told told write “check ID” on the back of their card instead of a signature. This is done to absolve the owner of liability as well as well as force the clerk or cashier to double check the signatures. This does not work for multiple reasons. First, if the thief cannot reproduce an exact signature, it is likely that the clerk will not have the training to check for minute changes to handwriting. Secondly, credit card owners are liable by law for $50 worth of used credit if a card is stolen, unless waived by the company itself.

Another common myth is that retailers can enforce a minimum for using a credit card. This myth is not only false, it completely violates the contract between credit card companies and the retailers. Retailers are charged a small amount per transaction, so they attempt to set a minimum to make the transaction worth their while. Any retailers caught doing this are often barred from using that credit card company.

A final myth, and perhaps the most common, is when retailers ask for an ID when using a credit card. This is another severe breach of contract between the retailer and the credit card company. Many retailers ask this to prevent fraud, but it is in fact one of the leading causes of fraud as clerks and cashiers will then have access to credit card numbers as well as personal information off of the ID.

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