Depending upon the country in which you reside, one of the ways to limit your exposure for online purchases is by using a prepaid credit card. This is relatively new in some countries. The prepaid cards function exactly like a normal credit card. The merchant will not be able to tell the difference between a regular credit card and a prepaid one.

The prepaid card has a limit which you set by the amount of funds that you place on the card. For example, if you purchase a hundred dollar credit card and use it to buy fifty five dollars of merchandise, your exposure is limited then to forty five dollars, without any further funds added to the card. If the merchant has a security issue and that particular credit card is exposed immediately, there be a limited concern about forty five dollars. It is far less that what would be at risk if a regular credit card had been used.

If the merchant keeps a data base and your credit card finds its way onto that information pool, there is the protection that your prepaid credit card may no longer be valid if there is a future security breach. Some people are using the prepaid credit cards in brick and mortar stores too. With data bases being compromised from outside hacker attacks and from personnel within companies, the prepaid credit cards provide protection from identity theft.

There are terms of service to consider. There are no universal standards that apply. The small administrative fee that is necessary is more than offset by the time and energy necessary if a normal credit card should happen to be compromised. The prepaid credit card provided one additional safeguard. It limits spending to what you have placed on the card already. You won’t be accumulating credit card debt.

Catherine Forsythe
Director of Operations
FlyingHamster: http://flyinghamster.com/

Tags: prepaid credit cards, security, data breach, identity theft, hackers, data base, debt