Smartphone apps can lock credit, debit cards

LOS ANGELES (KABC) -- You lock your house, your car, even your smartphone. Have you ever thought about locking your credit or debit card? New apps are designed to do just that, prevent unwanted charges by letting users turn off their cards.

When a flyer from his bank arrived in Scott Kilmer's mailbox advertising a new app that would lock his debit card with a quick tap and swipe, he signed up.

"That was really the feature that stood out to me most, where I could say it's time for me to turn this off and just know that I have the peace of mind that no one can get to this account but me," Kilmer said.

The app Scott has is one of several banks are offering designed to let customers prevent unauthorized charges.

Here's how it works: open the app and toggle a button to "activation" and the debit card is "on". Transactions are approved. But toggle that activation switch the other way, and try to buy something, the card is declined.

"We're all familiar with the bank systems that identify suspicious activity, but this is one that actually stops the fraud before the transaction occurs," Nessa Feddis of the American Bankers Association said.

Robb Gaynor of Malauzai Software, the maker of the app Kilmer uses, predicts this technology will be the next big thing in banking, and says right now more than 80 smaller banks and credit unions are offering their app for debit cards and the functions of this technology go beyond turning a card on or off.

"You can also do things such as asking for ATM limit increases, point of sale increases, or letting the bank know if you're going to be outside of the country," Gaynor said.

Keep in mind though, in order to change any card settings with an app, you've got to be digitally connected. If you lose your phone or the battery dies when your card is locked, you could be looking for a plan B to get money or make a purchase.

Feddis says these applications could be beneficial to customers and to banks, but when it comes to security, nothing is foolproof.

Even so, Kilmer trusts the app he uses and hopes it will help keep crooks locked out of his account.

"I know exactly where my money is being spent and better, where's is not being spent," Kilmer said.

Right now, only about 80 small banks and credit unions are using the app. Whether or not big banks adopt this new technology depends on if it grows in popularity at the banks that already use it.