Beware the mag stripe
From a technological standpoint, any card with a traditional magnetic stripe is more vulnerable to fraud since it's all too easy to counterfeit. (And, yes, in all likelihood, this currently includes most of the cards in your wallet.)
"It's very, very old technology," says Jason Oxman, CEO of the Electronic Transactions Association. "A magnetic stripe is the same technology used in cassette tapes."
Information is embedded in the form of characters -- letters and numbers -- that go across the stripe's tracks. Typically, this information includes your name, your account number, the account's expiration date and a security code called the card verification value, or CVV. This security code never changes, so once a hacker obtains the stripe's data, he or she has all the information needed to create a counterfeit card, Oxman says.
Hackers typically obtain the information through skimmers, which can be placed over ATMs or payment terminals. This practice is more common in the U.S. than you may think. According to a 2013 Nilson Report, the U.S. is the only region in the world where counterfeit card fraud has grown consistently. U.S. issuer losses due to counterfeiting accounted for 26.5 percent of global fraud losses in 2012.
"It's more common than lost or stolen cards or online fraud," Oxman says.