Banks Replacing Credit and Debit Cards After Target Data Breach

Millions of consumers who used a credit or debit card in Target during the data breach period – November 27 to December 15, 2013 – have received a replacement card in the mail sometime in the past several weeks. If you haven’t received a new card already, don’t be surprised if you open an envelope one day and discover you too have received a replacement card from your bank or credit card issuer.

Why Are Banks Replacing Cards?

Many banks are “proactively" canceling credit and debit cards that may have been compromised in the Target data breach. By cancelling cards before any theft occurs, banks save millions of dollars in fraudulent charges. They also save you, the consumer, the hassle of having to deal with unauthorized credit and debit card charges.

If your bank replaces your debit card, be thankful. Consumers can be responsible for up to $500 in losses if fraud is not reported immediately. With credit cards, on the other hand, cardholders are never liable for fraudulent charges made while the card is still in their possession.

What To Do If Your Card is Replaced

While the replacement card may be an “ounce of prevention,” it doesn’t come without inconveniences for cardholders. For example, your old card may be cancelled before you’ve activated the new one, before you’ve even realized you’ve received a new one, leading to declined transactions and embarrassment at the register.

If you receive a replacement card, call the number on the front of the card to activate it right away. Don’t forget to update any automatic billing that may use your old debit card number. Check a recent bank or credit card statement – one that includes at least a full month of transactions – to get a list of companies that may have your card stored for automatic billing. If you fail you update your billing information, new transactions will likely be declined and your services could be cancelled. Worse, the biller could send your account to collections, an action that could have a negative impact on your credit report.

You may have also stored your old card number as a billing method for online services like iTunes or Amazon. If you try to make an online purchase at a website that has your payment information stored and you’re declined, check to see if you need to update your payment details with your new card information.

You don’t have to update any automatic payment information that uses your bank routing and account number. This information won’t change when you’re issued a new debit card and fortunately, your debit card will still be linked to your same account number.

If you shopped at Target during the data breach period and you don’t receive a replacement card, don’t panic. Not all banks are sending replacement cards and those that are may not necessarily send to every consumer who used their card during that time period. Continue monitoring your account for fraud and take advantage of Target’s free credit monitoring – which won’t necessarily alert you to any fraudulent charges on made on your debit or credit card, but does give you access to credit report alerts for twelve months.

Source: CNN Money