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Tuesday, November 5, 2024

What is a Card Verification Value? Why Your Credit Card Has a CVV or CVC Number

What Is A Card Verification Value
Eric Bank

Writer: Eric Bank

Eric Bank

Eric Bank, Finance Expert

Eric Bank is an M.B.A. who has covered financial and business topics since 1985, appearing regularly on Credible, eHow, WiseBread, The Nest, Zacks, Chron, BadCredit.org and dozens of other outlets. Eric specializes in taking complex subject matters and explaining them in simple terms for consumer audiences, particularly in the world of personal finance. Eric holds a Master's in Business Administration from New York University and a Master's in Finance from DePaul University.

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Austin Lang

Editor: Austin Lang

Austin Lang

Austin Lang, Marketing Editor

Austin Lang has worked in writing and academia for more than a decade. He previously taught writing at Florida Atlantic University, where he graduated with a Master’s degree in English. His past experience includes editing and fact-checking more than 500 scientific papers, journal articles, and theses. As the Marketing Editor for CardRates, Austin leverages his research experience and love for the English language to provide readers with accurate, informational content.

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Jon McDonald

Reviewer: Jon McDonald

Jon McDonald

Jon McDonald, Contributing Editor

Jon leverages 15-plus years of journalism expertise to inform financial consumers about emerging trends and companies making an impact in the industry. He is most knowledgeable in the areas of budgeting, credit card rewards, and responsible credit use. Jon has a passion for writing and editing, and his articles have appeared in publications produced by The New York Times.

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What on God’s Green Earth is a Card Verification Value? And why does your credit card have one of those CVV or CVC numbers anyway? Well, the cold, hard truth is that there are fraudsters out there just waiting to swipe your credit card info

A Card Verification Value (CVV) or Card Verification Code (CVC) is a three- or four-digit security number on a credit card used to verify that the cardholder has the physical card during online or phone transactions, providing an extra layer of fraud protection.

But card issuers have developed some pretty good defenses against these ne’er-do-well thieves. One of them is that little three- or four-digit number called a Card Verification Value (CVV) — or, as some call it, the Card Verification Code (CVC). It’s your job to keep that number secret.

Climb into your favorite hammock, and I’ll walk you through the whole story in my unique, entertaining way.

How Card Verification Value Works in Card Transactions

The CVV/CVC was invented to put an extra lock on your credit card and keep fraudsters at bay.

It’s a secret password to ensure the rightful cardowner is using the card before any money changes hands.

Enhances Online Transaction Security 

That little CVV/CVC is like a guard dog, just watching over your credit card when you go to make purchases online. And even if some no-good thieves happen to get a hold of your card number, they won’t be getting very far without that magic code. 

These codes are a real fence against those sneaky outlaws who might get hold of your card number but don’t have their mitts on your card itself. Without the CVV, it’s like trying to get into the corral without the gate key — it just isn’t happening!

Verifies Card-Not-Present Transactions 

When you’re making an online or phone purchase of an item, the seller asks you for the card’s CVV. It helps keep fraudsters at bay with card-not-present (CNP) purchases where you don’t physically hand over your card.

The setup keeps rustlers from making off with your goods should they steal your account number but not your CVV.

CVVs deliver value

Nowadays, we indulge ourselves by buying things while sitting in the old rocking chair instead of traveling to the general store. Online merchants request your CVV to prove you’ve got the card in hand.

Supports Regulatory Requirements

Companies that deal in credit cards follow stringent rules and regulations set by the Payment Card Industry Security Standards Council. Using a CVV/CVC is one of those standards. 

These rules came about when people realized just how many shady card thieves were lurking around, and the CVV is one of the tools they use to help shoot down fraud. The PCI is the town sheriff, laying down the law. 

It has kept transactions safe since folks figured out that using a credit card was more convenient than bartering a cow for a handful of beans. When merchants obey these rules, they declare, “No Outlaws Allowed!” 

By using the CVV, businesses take a precaution to keep your information out of the wrong hands, like a two-ton safe protecting a saloon’s cash. It’s part of the system designed to keep the fraudsters from riding roughshod over your credit card, helping to prevent desperadoes from absconding with your hard-earned cash.

Where to Find the Card Verification Value on Your Cards

It’s mighty important to know where the CVV or CVC is hiding on your card because it’s the key to keeping no-good varmints from riding off with your money. Different cards stash it in different spots, so if you’re looking to protect your funds, you’d best know where to find it.

  • CVV on Visa, Mastercard, and Discover: You’ll usually find the CVV on the back of Visa, Mastercard, and Discover cards next to the signature panel. It’s a three-digit number that stands off by itself, separate from the main card number, silent but deadly against would-be hackers and fraudsters. It may be only a tiny number, but it is like the lock on a cattle gate — without it, the rustlers can’t make off with your wealth. If you aren’t paying attention to it, you might as well leave your safe wide open!
  • CVV for American Express Cards: Things are a little different if you’re using an American Express card. The CVV — or,  in this case, CVV — sits on the card’s front, a four-digit number above the card number. It’s about as hard to miss as a coyote in a henhouse, and Amex likes to make sure you can find it without breaking a sweat. So, it’s a little more prominent compared to other cards. It’s as if Amex is waving a flag, saying, “Here I am!” With Amex, you look at the card front to get the code you need.
  • Differences in CVV/CVC Formats: The length and placement of CVV/CVC codes depend on the card issuer. Some cards, such as Visa, Discover, and Mastercard, use only three digits, while Amex goes the extra mile with four. 

Some cards, such as virtual ones, do not even physically display a CVV. Instead, each transaction is accorded a new number.

How Card Verification Values Prevent Fraud

It’s helpful to understand how CVV/CVC numbers keep both consumers and merchants a little safer from fraudsters who, quite frankly, would love nothing more than to run off with your money

This little code stands guard between your card and any no-good scoundrel who hopes to make some easy money off your account.

Mitigates Card-Not-Present (CNP) Fraud

When you go shopping online or over the phone, the CVV/CVC code may save the day by keeping CNP fraud at bay.

CNP fraud

It would be easier for thieves to steal your identity when not physically present,  but that CVV acts similar to the bouncer at the saloon door. It checks if you can prove you have the card before letting you proceed.

If a thief gets hold of your card number without the CVV, they likely will fail when trying to pull off an unauthorized purchase. That little number gives businesses a way to ensure that the customer is the real deal, not just some criminal with a stolen account number.

So, even though card-not-present transactions are trickier to secure, the CVV makes it an awful lot harder for the bad guys to run off with your money.

Protects Cardholders After Data Breaches

Now, let’s say there is a data breach, and someone gets access to a whole bunch of credit card numbers.

Data breaches

CVVs come in very handy here, seeing as they’re usually not stored with all the other details of your card. 

Even when the crooks get the number of the card, they’ll still be missing that key piece of the puzzle — like finding a gold mine map with no labels.

It works like an extra lock on the bank vault, keeping your money safe even when part of your information has been compromised. Yes, the bad guys can get close, but they really can’t get to the finish line without that secret code.

After a data breach, you’ve still got the CVV as an extra layer of defense protecting you from the fraudsters who thought they struck it rich. 

Merchants Also Help Keep Consumers Safe 

Merchants act to ensure consumer safety by asking them for CVV/CVC codes for most card-not-present transactions.

Consumer safety

It is a big part of the job, like checking IDs at the door and making sure the right folks are getting the right treatment. 

Without checking the code, merchants would be letting all kinds of outlaws slip through the cracks. The merchant may end up facing chargebacks or disputes if they don’t take steps to prevent fraud. 

Merchants collect CVVs so that rustlers cannot steal your whole herd, so to speak. The buyer-to-seller transaction stays on the straight and narrow, keeping the bad apples out of the barrel.

Credit Card Verification Values Are an Important Safeguard

When push comes to shove, credit card verification values/codes are like your trusty guard dog, ready to keep you safe from credit card crooks and scoundrels. 

Whether you are buying online, over the phone, or are just generally in a tizzy about data breaches, that little number adds some rock-solid protection, making theft harder than wrangling a wild stallion on a moonless night. 

It will keep both the consumers and the merchants toeing a straight line and, at the same time, reduce fraud while the process runs as smoothly as a well-oiled wagon wheel.