No Need of your Signature on Purchasing Credit Card

Mastercard Inc. (NYSE: MA), Discover Financial Services (NYSE: DFS), American Express (NYSE: AXP), and Visa Inc. (NYSE: V) all announced that they would stop requiring credit card signatures by April of 2018. Some issuers are dropping the requirement for all purchases made in the U.S. or North America, while American Express is dropping the signature requirement worldwide.

New, improved methods for fighting fraud

With the advent of chip technology, machine learning, and improved data management, banks have fraud detection methods that are far more sophisticated, and faster, than a simple signature.

Have you ever received a fraud detection notice from your bank? Has your bank ever shut down your credit card because you forgot to tell them you were traveling out of state or abroad? If so, that's your card issuer's fraud detection system at work.

Banks have massive amounts of data stored on all cardholders. This information includes everything from where and how often you use your credit card to the kinds of purchases you typically make and what time of day you make them. This data forms a spending pattern that allows card issuers to detect and flag anomalies as potential fraud.

If this weren't enough, signatures have now been made completely obsolete by the advent of chip cards. The implementation of that EMV chip in your credit card, along with terminals that use chip readers instead of swipers, has caused a massive decrease in credit card fraud.

How to protect yourself from credit card fraud

You shouldn't just rely on improved technology to keep you protected, though. There are a number of ways you can prevent and fight credit card fraud.

Act quickly if your credit card is lost or stolen. Call your bank immediately and freeze your accounts, even if you think you may have simply misplaced it.

Check your credit card statements vigilantly. You can set up purchase alerts so that your bank notifies you of certain behaviors like a purchase made over a certain dollar amount.

Use a mobile wallet. Because phones now require biometric data to be unlocked, and mobile wallets encrypt your information, they're safer than carrying a physical credit and traditional online shopping.

Monitor your credit report regularly. Many credit cards now offer free credit monitoring. If you notice your score drop, pull a report and find out why, as it could be the result of fraudulent activity.