There’s already enough to stress about with the upcoming holiday season- finding the perfect present for everyone on your list, making holiday treats for friends and neighbors, and of course, sending out all of the holiday greeting cards. One less thing that needs to be added to that list is the stress of a credit card data breach. This holiday season, we’re examining all of the ways to pay, on and offline, and the safest way to take care of all of your holiday purchasing needs.

Credit Cards and the Recent POS Breaches

The topic of data breaches and identity theft has been in the media more and more frequently lately, so it’s natural to feel nervous about where you swipe your card. With the holiday season fast approaching, there will surely be an influx of transactions at retailers everywhere. Don’t panic. Educate yourself on how to be safe in the event of a breach. Recently, Creditcards.com conducted a survey on how likely people are to shop at a retailer after a breach. Out of the 865 cardholders surveyed, 45% were inclined to avoid shopping at retailers that had experienced a breach. One important point that these shoppers may not realize is that a store that’s already been involved in a breach is more likely to increase security protocols by running a full scan and forensic analysis to avoid additional incidents, therefore making them even safer to shop with.

Paper vs. Plastic

Of those shoppers surveyed, 48% planned to pay in cash this holiday season, which, by itself, carries its own risks. First of all, it’s inconvenient to carry around hundreds of dollars in your wallet, and, if anyone were to see you with that much cash, it could make you a target for being mugged. Even if you’re super careful about letting strangers see your cash, what happens if you lose some, or even all of it? There’s no guarantee or safeguards in place to get that money back- once it’s gone, it’s gone.
Winner: Plastic

Credit vs. Debit

For a lot of people, these cards seem like one and the same. At least how they spend anyway. As far as anti-fraud protection is concerned, credit cards are much easier to deal with in the event of fraud. Credit cards are not linked to your bank account, so should a cybercriminal get a hold of one of your credit cards, they can’t drain your account and leave you flat broke. Credit cards are a sort of loan, and you have the ability to dispute the charges before you pay the bill. That’s not to say that debit cards are unprotected, it’s just that the process is different than with credit cards. If the bank makes the decision to side with you on the issue (which is a long process by itself), it can still take up to two weeks for them to replace the money in your account. Under the Fair Credit Billing act, your liability is limited to $50 in the event of credit card theft as long as you report it to the credit card company when you notice the suspicious activity. With debit cards, you must report the suspicious charge within 2 business days. If you report it within 3-60 days, you are liable for $500 and after 60 days, you’re liable for the full amount. So if you decide to use debit cards, tread lightly and keep a super close eye on your accounts.
Winner: Credit

Pre-Paid Credit Cards vs. Credit Cards

Pre-paid credit cards offer a lot of flexibility and control over how much money you have at risk. You can set a predetermined amount of money to put on the card, and it is certainly better than carrying around an overabundance of cash. However, they work similarly to debit cards, rather than credit cards, as they are linked to actual money instead of a credit line. Most pre-paid cards do have anti fraud protection, but it is much like debit card protection. If the prepaid card gets involved in a data breach, the only money that’s lost is the amount you put on the card, and not your entire checking account. While slightly better than a debit card linked to your checking account, they’re still not as safe as a credit card. If you do choose to use prepaid over debit, be sure to research the card’s anti-fraud policies before loading it up with cash.
Winner: Credit

Digital Wallets vs. Old School Wallets
While not necessarily a new technology, it is certainly new in the spotlight with the introduction of Apple’s new mobile payment system Apple Pay. Similar to Google Wallet, which was launched in 2011, the technology uses near-field communication (NFC), a form of radio-frequency identification, which uses contactless data transfer as the method of transferring the data from your phone to the retailer. Apple Pay uses a form of two-factor authentication to authorize purchases- your phone and your fingerprint. In addition to this secure method of authorization, the phone generates a one-time use token instead of your actual credit card information to complete the transaction. With this extra layer of security, in the event of a POS data breach, your credit card information will not be accessed. However, Apple Pay is very new, launched in October of 2014, so there is not a lot of data on the usage of it yet. So far, it appears to be a safe way to pay, but in recent news, several retailers have pulled away from using it in favor of using a newer, not yet released technology called CurrentC. One of the secure things about Apple Pay is that the only entity that knows your shopping habits is Apple, and one of the key points of the new CurrentC is the ability for multiple retailers to track your spending habits in one app. So as far as privacy is concerned, Apple Pay seems to be the safer bet. In addition to these forms of payments, a lot of retailers are using Square for processing transactions. Square is an alternative for POS machines. It encrypts the transactions as soon as you swipe your card and then tokenizes the transaction on its servers, so your credit card information is not stored. Square, for now, is impervious to POS attacks.
Winner- Undetermined

What About Shopping Online?

While a lot of the same rules apply as above, there are a few other precautions you should take when shopping online. Only shop on trusted and well-known websites. In addition to shopping on secured websites, look for sites that offer PayPal as a payment option. PayPal offers buyer protection, which will protect you against fraudulent purchases you did not make as well as ensuring that you receive the item that you ordered. With all of the shopping frenzy the holiday season brings, it is sure to attract scammers galore. Be sure to verify that the sites you are making your purchase with are secured by looking for website URLs that begin with "https:" or that are authenticated by VeriSign or use the Norton Secured Seal. Additionally, if you are shopping online, make sure you are doing it from a secure Wi-Fi network such as the one at your home and never on public Wi-Fi, as many of these networks are unsecure and can leave you vulnerable to hackers.

No matter how you choose to pay this holiday season, there are always some safety precautions that you can take that will work across the board with all of these platforms.

• Avoid phishing scams. Be wary of emails that request personal information and attempt to direct you to a suspicious URL. Remember, your bank and most retailers will not ask you for any personal information via email. If you believe your account has an issue, go directly to the company’s website by typing the web address into your browser and log in there.
• Monitor your bank accounts and credit accounts closely for any suspicious transactions and report anything that seems out of place as soon as possible.
• Beware of offers that seem too good to be true. These can also be scams, which tend to appear at a higher rate during the holiday seasons.
• In the event of a POS data breach, find out what kind of data breach your information was involved in and what company that data breach occurred with. If the company that was involved with has released information on what to do with your accounts, follow their suggestions.

If you’re shopping online, add another layer of security to your computer with an Internet security software program such as Norton Security.