Home > Credit Cards > Your Credit Card Might Have an Off Switch Soon

Comments 1 Comment

Emerging technology gives consumers the ability to turn their credit and debit cards on and off through a smartphone app, a capability that can not only help families and businesses control how authorized users shop with the card but also, and perhaps more importantly, help prevent card fraud.

One of the companies developing this tool is Ondot Systems, which works with payment processors to make the technology available to banks and their customers. The on-off function, in addition to other control preferences, is available to cardholders through their bank or credit union’s mobile app. Some financial services companies are working to develop their own technologies as well.

A Remote Control for Your Credit Card

“The basic idea is very simple,” said Rachna Ahlawat, founder and executive vice president of products at Ondot Systems. “Almost everybody has a credit or debit card in their wallet, and most everybody has a smartphone, so what we essentially created is a remote control for the cards they already have in their wallet.”

With CardControl, the primary accountholder has a suite of preferences at his or her fingertips, Ahlawat explained. There’s the simple on-off switch, which prevents any transaction when a card is turned off, whether it’s in a bricks-and-mortar store or a card-not-present transaction, such as a phone or Internet order. If someone attempts to use the card when it’s off, the cardholder receives an alert — if he was trying to use it but forgot to turn the card on, the cardholder can just flip the switch on his smartphone. Otherwise, the cardholder has just been alerted to attempted unauthorized use of his card.

CardControl goes even further (if you want it to): You can set location preferences, so the card doesn’t work outside certain areas, as well as merchant categories. This feature comes in handy for cardholders with authorized users on their accounts, Ahlawat said.

“My daughter, her card is open for use at gas stations around the San Francisco Bay area and for department stores,” she said. Her daughter is an authorized user on her card, and her daughter can also set preferences of her own (within the parameters set by the primary account holder). Because you can also set spending limits, parents can prevent their kids from abusing authorized user privileges.

These features can benefit company accounts, as well. Not only does this help the card administrator better control use of company cards, it can reduce company risk exposure, since business cards don’t have the same fraud liability protections as consumer credit cards.

Prevent Fraud With Current Technology

Ondot Systems works with payment processors — they’re essentially the middlemen between merchants and banks, and consumers don’t interact with them — and these authorization entities work with banks to incorporate the technology into their consumer offerings. CardControl is currently available through about 10,000 U.S. financial institutions, Ahlawat said.

Even if your bank or credit union doesn’t offer such technology, it likely gives you the option to set up transactional monitoring, which can help you spot unauthorized activity. You can set up alerts for transactions greater than a certain dollar amount, and because mobile applications are widely available for financial institutions, you can easily check your card activity daily.

Consumers should prioritize such account monitoring because credit and debit card fraud can seriously damage your finances, even if it’s just for a short time. Debit card fraud can be particularly troubling, because you may need the money stolen from your account for bills, and no matter how quickly you spot the issue, the missing money could cause you to miss a payment or overdraft your account.

The credit damage you sustain from fraud could put you in a serious bind if you’re applying for financing, setting up utilities, looking for a job or apartment hunting. Depending on the extent of the fraud, it can take months to get back to normal, so take the time to review your card activity regularly, request your free annual credit reports and check your credit scores for signs of anything suspicious. You can see two of your credit scores every month for free on Credit.com.

More on Credit Cards:

Image: AbeStock.com

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • http://bajamisdeudas.com/ bajamisdeudas

    We would love that feature if credit card companies will push that but there is always an underlying fact that they will still find a way to somehow rake money from this.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team