Secure Your Financial Data and Long-Term Financial Security With These 8 Online Security Tips

Chris Ladd, CFP®

As a financial planner, one of the primary responsibilities to my clients when developing a comprehensive financial plan for them is to ensure that risks to their financial health are minimized. Reducing the risk of identity theft and unauthorized access to your financial accounts is a big part of managing that risk.

The risk of becoming a victim of a cybercrime is growing as more Americans are shopping online due to the COVID-19 pandemic. This trend will likely continue even after the pandemic is over. With Cyber Monday approaching, protecting your personal information when you shop online is something to keep in mind. These eight tips can help safeguard your financial information on Cyber Monday and in the future.

Tip #1: Create Secure Passwords and Protect Them

Having a secure and unique password for each online account is essential to protecting your personal information. There is no better way to create and maintain secure passwords than utilizing a password manager. Password managers can generate strong random passwords, store them for you, and they are really easy to use.

The key to using a password manager is to create one unique and strong master password to access the accounts and passwords stored in your password manager. Have a look at these PCMag review articles with The Best Password Managers for 2020 and The Best Free Password Managers for 2020 for some suggestions on best options, and take that sticky note off the side of your monitor!

Tip #2: Use Two-Factor Authentication When Possible

By now you have probably heard of two-factor authentication. This is when a second layer of security is added to an account before you can log in. When two-factor authentication is enabled, you have to approve the login on a second device, typically your cell phone. This can either be a text message with a unique one-time security PIN, or an approval confirmation or PIN generated from a third-party app on your phone.

Enable two-factor authentication on your accounts, including your password manager account, to make your personal information more secure. Yes, it's an extra step, but it's easy and creates an extra layer of security to prevent unauthorized access to your financial data.

Tip #3: Don't Access Accounts Over Unsecured Connections 

It's easy to access the internet from almost anywhere these days. However, most of those quick connections that you have stored in your phone (coffee shop, hotels, restaurants, airports, etc.) are unsecured networks, even if you have to enter a password to log in. Do not access your financial accounts or any account with sensitive information over an unsecured connection. If you must do it, make sure you enable a VPN on your device first to secure your connection. Do some research to find a VPN that works well with your device, and be wary of free VPNs.

Tip #4: Invest in Quality Virus Protection Software 

If you don’t have it already, install virus protection software on your computer to help identify and prevent viruses from infecting your computer. While there are free programs available, they don’t always provide the latest updates. There are low-cost virus protection options to choose from, and their small upfront cost can be worth it to safeguard your personal information. For some suggestions on best options, take a look at The Best Antivirus Protection for 2020.

Tip #5: Be Wary of Links and Phishing Scams

It’s a good rule of thumb to avoid clicking on any links you receive in an email, even if the email initially looks legitimate and appears to be from a company where you have an account. Cyber criminals create emails with links that appear trustworthy or like they’re coming from a reliable source, when in reality they are directing you to a site to capture your login information or to infect your device with a virus to capture the information later.

If you’re unsure about the validity of a link, click through from the company's website or better yet, access your account from the direct link you stored in your password manager!

Tip #6: Use Virtual Credit Card Numbers Online

Virtual credit card numbers are temporary credit card numbers associated with your real credit card account. These can be entered online in place of your real credit card number and then expire after a short period of time or one-time use. Even if someone gains access to the virtual card number, it will be useless for future transactions. While the process of obtaining a virtual credit card number may vary slightly with each credit card provider, the service is typically a free benefit. Check with your preferred credit card provider to see if it's an option.

Tip #7: Don't Use Debit Cards Online

If your debit card number is compromised, then so is access to your bank account. Debit card transactions are must less secure than credit card transactions. While you may eventually get your money back if money is taken from your bank account, it will likely be locked and you will not have access to your money until your bank investigates the issue. Using a credit card for online transactions is always better than using a debit card, and using a virtual credit card number is better still. 

Tip #8: Freeze Your Credit 

A last line of defense for your financial security and against identity theft is to freeze your credit. Often cyber criminals will obtain enough personal information to open new accounts in your name. Opening new accounts can often be worse than accessing your existing accounts because it could take months before you ever learn about the fraudulent accounts. However, if your credit is frozen, even if someone gains access to some of your personal information, they will not be able to open a new account in your name. Freezing your credit is not difficult and doesn't take very long. For more information, see my article on how to Freeze Your Credit for Free in 45 Minutes to Reduce Your Risk of Identity Theft.

Securing your personal and financial data isn't difficult, but it does take a little planning and initial work. Using the suggestions in this article will help create layers of protection and ultimately peace of mind knowing that the risks to your financial well-being are minimized.

By Chris Ladd, CFP®
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