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The value of a credit card

By Janna Herron · Bankrate.com
Tuesday, December 20, 2011
Posted: 2 pm ET

A lost or stolen credit card causes all sorts of headaches, stresses and financial uncertainty for a consumer, especially if key parts of your identity are breached. For issuers, losses can run into the millions of dollars, not to mention the cost to invest in prevention measures.

But, when it comes right down to it, how much is one credit card really worth? Only $3.50 on the black market, according to a Bloomberg report on credit card fraud.

Now that sounds cheap. In an earlier Bankrate article about card fraud, Mike Urban, FICO's fraud chief, told me hackers could get $5 to $10 per account info. Waiters who skimmed credit cards under the table could get as much as $20 to $40 per swipe.

But due to too much supply and more safety measures on the issuer side, it's a buyer's market, according to the report. To keep in business, thieves have to offer stolen data at bargain-basement prices. Call it criminal capitalism.

The report compares these illicit sites to commonplace website retailers such as Amazon or eBay. Some offer ways to narrow your search for a compromised card number by specifying bank, card type, credit limit or ZIP code. Others rate buyers and sellers with stars and reviews.

Fill up your virtual cart with your illegal merchandise, and check out. Most purchases are handled through an escrow system overseen by a trusted senior hacker, the report said. And most transactions run up into the tens of thousands as swindlers snatch up thousands of card accounts.

But here's the good news: Your liability for losses from a stolen or lost credit card is $50 under federal law. (The same does not apply to debit cards.) The rest is on the card companies.

Still, you'll want to keep your credit card safe as it could be a gateway to your financial identity. So the quick tips are these: Monitor your accounts online, and sign up for mobile alerts; do all your banking from a secure computer; and report any suspicious activity to local police, your issuer and the credit reporting agencies.

What's your advice on keeping your credit cards safe?

Follow me on Twitter: @JannaHerron.

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