Credit Card and Debt Questions and Answers

Many credit card companies are considering the use of radio-frequency identification (RFID) chips in their credit cards instead of magnetic stripes. Why RFID technology? The advantage is quicker, more efficient transactions, especially those carried out at traditionally “cash only” retail outlets, such as fast-food or convenience store purchases. Major credit card moguls MasterCard, Visa and American Express are promoting contactless versions of their credit cards, which only need to be held near a special reader at the checkout counter for a sale to go through, eliminating the need for the standard card swiper.

But do the advantages outweigh the potential drawbacks? Is our personal information safe? The sources we’ve found thus far seem to indicate the answer is a resounding “no”. The use of the RFID chip embedded into credit cards may potentially let credit card hackers steal your personal information. The scariest part is that it can happen right in your presence, without you even knowing it. In fact, we’ve shared several blog posts with readers regarding this subject to date. Our post on June 1, 2008 gave a “complete tutorial on how to spend $50 worth of equipment to hack into anyone’s credit card embedded with RFIDs”. In our September 4, 2008 post, we discussed a potential television segment that “Mythbusters” was planning to air on this RFID technology – which was subsequently killed, after reported phone threats to the Discovery network. Now if that doesn’t sound suspect, I don’t know what does.

It seems writers at creditcards.com have similar concerns about the safety of contactless cards. In a March 2009 article, they question the safety and security of the technology as well.

How does the technology work? A traditional credit card uses a magnetic strip to store account information, which is retrieved when swiped through a credit card machine. A “swipeless”, or “contactless” credit card uses RFID to store the same information within a “smart chip”. The chip is embedded within the credit card itself. When exposed to a contactless credit card reader, the electromagnetic waves emitted by the reader initiate the chip to respond via a small radio antenna, which then transmits the data to the reader and on through the card issuer’s network.

Are there other applications of RFID technology? RFID technology has been used since World War II, where it was applied to identify friendly versus enemy aircraft. It is commonly used in identification tags for people or animals, as well as warehousing or retail inventory or electronic lock applications such as cardkeys.

Credit Card Debt Questions

What are the dangers? The concern is that a potential hacker could be standing next to you with a card reader hidden out of view, lifting your account information from the card without your knowlege, in a process dubbed “skimming”. Fortunately, the card issuer’s would likely be responsible for any fraudulent charges.

How can I protect my privacy with contactless cards? You can purchase a RFID-blocking wallet with a conductive metal shield in it, usually steel, nickel or copper. A cheaper, but less reliable method is to wrap your card in tin foil to block the receipt of the RF signal.

In reality, there has yet to be any documented reports of RFID card-hacking fraud. The warnings and negativity regarding the technology is solely based upon research and controlled testing environments. Nonetheless, the data is pretty convincing, laboratory or otherwise. And our private information, which is the bridge to our credit and financial lifeblood, is perhaps the most valuable aspect of a person’s life outside of their health. Individuals need to be aware of what they are being exposed to, and make choices accordingly. Don’t need that credit card after all? Cancel it, or ask for one without the RFID technology if possible. They can only say no.

If you would like a free financial/debt evaluation, go to http://www.freeattorneyconsultation.info or call us directly at 866-868-2160.