When it comes to signing the back of your card, you’ll get different answers depending on whom you talk to. Your credit card company requires you to sign your card for it to be valid. Technically, merchants aren’t supposed to accept your card if there is no signature on the back.
You might think this requirement is designed to protect you from credit card fraud and identity theft, but it’s not; the signature requirement is designed to protect the credit card companies. Your signature indicates that you accept their terms of service, and doesn’t do anything to make your transaction more secure.
As more and more checkout lanes allow you to swipe your own card, there is no interaction between the merchant and the card. That means the signature issue becomes a moot point, as there is no way they’ll know if it’s signed.
Ultimately, we agree with security advocates who say it is safest to write “See ID” or “Ask for photo ID” on the back in lieu of a signature. If you do sign the card, you’re only giving a potential identity thief a copy of your signature to practice forging.
The downsides are slower transactions, and some merchants will refuse to let you use the card with them if it’s unsigned. We’d say that’s a risk worth taking, and as more and more cash registers become customer terminals, the signature will be less of an issue.
In the last year and half, creditors in the US have moved to adopt more secure payment security methods. Known as “chip & PIN” or “chip & signature”, this involves embedding a RFID chip in the card itself. You “dip” the card into the reader, where it scans the chip and creates a unique transaction code. This is more secure than the old magnetic strip method, and should make it even less imperative that you sign the back of your card.
Eventually, it’s expected that cards needing a PIN will outnumber those approved with a signature. In the meantime, consider leaving your signature off of the back of the card and don’t let it annoy you when the merchant asks to see your ID. When they ask, they’re acting to protect themselves and you from the scourge of identity theft.