So Your Credit Card Was Hacked, Now What?

NEW YORK (TheStreet) -- The news that more than 40 million Target customers paying by credit or debit cards for their holiday shopping purchases over the past three weeks may have been hacked is stunning and scary. But if you happen to be one of those whose card's information was compromised, it doesn't mean the end to your plastic shopping habits.

But what it does bring to light is a lesson in financial responsibility.

The Minneapolis-based retailer confirmed on Thursday that it was aware of "unauthorized access" to payment card data that "may have impacted certain guests making credit and debit card purchases in its U.S. stores" between Nov. 27 -- the day before Thanksgiving and just before the Black Friday shopping weekend -- and Dec. 15.

Customer names, credit or debit card numbers, card expiration dates and the three-digit security codes on the backs of cards were among the list of compromised data, Target said.

Given the level of sophistication of the card compromises -- reports are saying that hackers likely targeted Target's point-of-sale system, i.e. the cash registers used to ring up purchases, and that it was possibly an inside job -- it's unlikely that a consumer could have avoided it, unless they used cash.

Unfortunately the reality today is that despite high-tech banking and payment systems, there are equally brilliant, yet malicious minds that want to compromise those systems.

So while it might not be all that preventable, customers can mitigate the level of how much they are affected by the hackings.

"The biggest takeaway is the responsibility for your credit and banking information belongs with you," says Ben Woolsey, director of marketing and consumer research for CreditCards.com, a marketplace for consumers to find credit cards that best match their lifestyle and credit score.

"There is a misconception that banks will catch it," Woolsey says. "That's does happen sometimes, but more often than not a consumer has to catch it and notify the bank."

As well, the protections afforded to credit cards and debit cards differ vastly. While credit cards are protected under federal guidelines, debit cards are less so. Meaning that a customer can potentially be liable if the fraud is on their debit card as opposed to a credit card, Woolsey notes.

If you do find yourself with a compromised card, the first and most important step is: Don't panic.

"Any kind of data breach does not expose a person to identify theft, it just exposes you to card theft," Woolsey says.

Next: Contact your card issuer or bank to inform them of the situation. Most likely the most prudent action will be to cancel the card and get a new account number.

After that: Be diligent about keeping tabs on your accounts, particularly debit accounts. Monitor statements regularly to keep track of any suspicious activity. Banks make it easy these days with mobile apps where customers can set up text or email alerts for suspicious activity or if accounts fall below a certain minimum.

"Most people don't check their debit card transactions. They don't check their bank balances on a regular [basis], he says. "You can potentially get your entire balance wiped out by a breach."

Consumers should specifically look out for small purchases, sometimes for just a few cents. Woolsey says these are purchases where the hacker may be testing the account to see if they can get authorization -- making way for an eventual larger transaction.

"If all of a sudden you see that on your account, that's certainly a harbinger of bad things to come," Woolsey says.

You may want to contact one of the three major credit bureaus -- Experian, Equifax or TransUnion -- to put a fraud alert on your card.

"That's a free thing and will last for 90 days that would keep a criminal from setting up any new credit, but that is more applicable if you've had your identity stolen," Woolsey says.

If it makes consumers feel more comfortable though, by all means contact the credit bureaus. Just be aware that putting a fraud alert on your credit history works both ways. A criminal may not be able to set up new credit but neither can you, so if you're taking out a loan or getting another credit card, be sure to take the fraud alert off.

Finally: Don't be nervous to shop at Target or another retailer after the attack.

Typically, it's the largest stores that have the best security measures, but nothing is perfect.

"There is no way to completely protect yourself unless you pay cash at point of sale, but using a credit card will always be more secure than using a debit card," Woolsey says. "You're always going to have a lot better protections with a credit card."

-- Written by Laurie Kulikowski in New York.

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