How Do Thieves Scan Credit Cards in Your Purse?

The identity-theft risks of a stolen wallet offer good reasons to keep a tight grasp on your purse strap. Someone who gains temporary but legitimate access to your credit card -- a restaurant server or checkout clerk, for example -- can steal its information directly off the card itself. New credit card designs can disclose your card number and other information at a distance. The best protection against these frauds starts with an understanding of how credit cards carry personal information.

Conventional credit cards encode your identification information into a strip of material equivalent to a short piece of audio recording tape. That rust-brown stripe on the back of the card consists of a piece of plastic coated with ferric oxide. Its recording method explains why credit cards placed on top of speakers and other sources of magnetic energy lose their encoding and no longer swipe properly at the checkout counter. Unless thieves manage to read the numbers off the front of these cards or gain physical access to them to swipe them through reading devices, their data-storage stripes don't give up their secrets. Watch out for phony ATM terminals or skimmers attached to legitimate ATMs, however, as these pieces of hardware can fool you into thinking you've accessed a genuine piece of bank equipment.

New developments in data recording make it possible to access a credit card's data without swiping it through a point-of-sale terminal. These contactless cards incorporate radio frequency ID tags that a merchant can read at a distance with a scanner. The same RFID technology provides the basis for toll-pass cards that register each time you drive by a highway payment point and employee badges that unlock gates and doors when you wave them in front of a scanning device. Inside your RFID-enabled credit card, a tiny radio antenna draws credit data from a microchip and makes it available to a purchase terminal. The convenience these cards offer comes with a built-in negative. With a pocket-sized radio frequency scanner that can cost less than $100 or a smartphone equipped with near field communications capabilities, thieves can obtain the data from a credit card right through your wallet and purse, providing they stand close enough to you for a sensor to register the information. Early generation credit cards with RFID tags encode the card information necessary to make a large purchase, unlike newer cards, which minimize their scanner-readable data.

To deter would-be thieves' attempts to steal your credit card data, wrap your wallet or cards in aluminum foil or carry your cards in an aluminum or steel wallet. You also can request that your card issuer send you a traditional magnetic-stripe card instead of a contactless version. If your wallet includes more than one card with an RFID tag in it, the aggregate of their data may confuse a scanner and cancel out the information on any one card. Estimates of the time required for a scanner to access RFID-enabled card data vary, but if you see someone holding a cell phone near another person's wallet or acting strangely in a checkout line, move away and ask store personnel for assistance.

Banks insist that the data on their contactless cards represent encoded information that's difficult for thieves to interpret, and that the time required for a scanner to access these cards' data makes skimming impractical. Nonetheless, an ounce of prevention costs less than a pound of cure. Start by taking cards you don't use out of your wallet altogether and storing them in a safe place at home. In that same safe place, keep a list of all your cards' numbers, expiration dates and security codes, along with the card issuers' customer service contact information. If you lose your wallet or someone accesses your card data, you won't need to look up the phone numbers before you file a report.