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More people reach for their debit cards when making a cashless payment than any other type of card, according to the Federal Reserve.
It’s not hard to understand why people like debit cards. A debit card can allow you to make purchases without carrying cash or writing a check, help you avoid paying interest on purchases and possibly help reduce the risk that you’ll overspend.
But because debit cards are directly linked to a bank account — and the money in that account — it’s especially important to keep them secure.
Let’s look at a common security measure that card issuers use to help protect debit cards — the debit card security code.
What is a debit card security code?
Like a credit card, your debit card has multiple sets of numbers printed on it. There’s the card number, which is a 15- or 16-digit number that’s usually on the front of your card. And your card may also have issued and expiration dates on the front.
A debit card security code is a three- or four-digit number located in the signature box below the magnetic stripe on the back of the card. You may also hear this number referred to as a card verification code, or CVC, or a card verification value, or CVV.
Both debit and credit cards can have a card security code. Some card issuers, like American Express, feature this code on the front of the card.
But there are key differences between what happens in terms of security when you swipe that magnetic strip with a debit card versus a credit card.
When you use a debit card to make a purchase or pay a bill, you’re using your own money, drawn directly from the bank account the card is linked to. Using a credit card is essentially using the card issuer’s money, which it’s agreed to loan to you, to make a purchase or pay a bill.
How does a debit card security code work?
Because your debit card is linked directly to your bank account (or a specific sum of cash if you’re using a prepaid debit card), it’s important to protect it as vigilantly as you would cash.
Generally, debit card security codes are just one layer of security for card transactions — you may be asked for yours if you’re making a purchase online or over the phone. By asking you for this code, along with your account number and other information, the merchant is trying to verify that you’re the cardholder or authorized user. That’s because you’ll typically need to have the card in your possession to share this code.
A debit card security code works differently from the personal identification number, or PIN, that you selected when you got your card and that you enter when you withdraw money from an ATM or make an in-person debit purchase.
It also works differently from the unique code generated by EMV chip cards to help prevent fraud. These cards have a chip on the front that is read when you insert your card into the card reader. The reader scans the chip, you enter your PIN or use your signature, and the chip produces a unique code for that particular purchase. Unlike the security code on the back of your card though, you never see this unique code.
Along with your card number and expiration date, it’s important to protect your debit card security code, because someone can use this information to make a fraudulent purchase with your card — even if they don’t physically have the card in their possession.Learn more about identity theft
What are other ways to fight debit card fraud?
Credit card issuers and financial institutions aren’t the only ones responsible for protecting your debit card. There are also steps you can take to help keep your card secure.
- Never tell anyone your PIN. And don’t write it down or carry it with you.
- Avoid using a debit card to make online purchases — a credit card may be safer.
- If your financial institution offers them, sign up for email or text message alerts that tell you about activity on your account.
- Monitor your bills, bank account statements and credit reports for any signs of fraudulent activity, like withdrawals you didn’t make or purchases you didn’t authorize.
Along with not sharing your card number or security code with anyone, it’s important to contact your bank, credit union or card issuer immediately if your card is lost or stolen.
If you notify the debit card issuer within two business days after you discover your card is missing, you can only be held liable for $50 or the amount of any fraudulent transactions that happened before you notified the issuer — whichever is less. But if you take up to 60 days to notify the issuer, your liability could be up to $500. And keep in mind that if you report the loss more than 60 days after your statement, you may lose everything that was taken out of your debit account.
Debit card use continues to grow, and so does card fraud. Understanding how security features like a debit card security code can help protect your debit card — and what steps you can take to reduce the risk of fraud — can help you safely enjoy the convenience of paying with a debit card.