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Decluttering your wallet can give you a quick sense of accomplishment in the new year. You can check a task off your list and feel more organized and safer. A lost or stolen wallet holding too much personal and financial information puts you at risk of identity theft and fraud.
Experts don’t always agree on what you absolutely must keep in your wallet, but there’s wide agreement on cards that do not belong there. It might be simplest to start the task by taking everything out and returning only those things you actually need.
What to take out
Focus on minimizing the danger that a stolen or lost wallet would put you at risk of identity theft. Here’s what definitely should come out:
Social Security card. This represents a high risk because the number can be used by scammers to file a tax return to hijack your refund, to collect benefits and to access or open new accounts.
Debit card attached to a bank account (plus checks and deposit slips). Unlike with credit cards, where the cardholder is not out any money while fraud is being investigated, debit cards take the money from your account immediately.
Gift or prepaid debit cards you do not plan to use today. A lost gift card may be impossible to cancel and replace.
ATM and gas station receipts. These may contain up to five digits of your credit card number and the expiration date. For identity thieves, those can be puzzle pieces.
Any paper with PINs or passwords. It’s especially risky to carry them with the associated cards.
And yes, people discover they have these things in their wallets, even if they know better. Identity theft consultant and author Carrie Kerskie says Social Security cards can end up in wallets because they were put in for a specific purpose — say, when starting a new job — and just never removed. Receipts, passwords and other items may have gone in your wallet “temporarily.”
In addition, the AARP recommends you take out:
Medicare and health insurance cards. Scammers may be able to use the info to get benefits using your data.
Employee badge when not needed for workplace access.
What to keep in your wallet
There are some things that belong in your wallet or car all the time. Those are the first things that you return to it when doing your clean-out:
Driver’s license or some other form of government-issued identification.
Student ID, if applicable.
Proof of auto insurance (could also be kept in your car's glove box).
At least two general-use credit cards if you have them.
A medical alert card, if applicable.
What to carry only occasionally
Some cards you need only sometimes, such as:
Medical debit card for a flexible spending account.
Credit cards for specific retailers.
Health, dental or prescription insurance cards.
There’s no time like a new year to establish new habits. Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center, recommends relying on tools you already use — phone alarms, calendars, journals or refrigerator notes — to remind you to add cards when needed and remove them afterward. For example, add a note saying “take insurance and prescription cards” to the reminder about your doctor appointment. Set a reminder to remove them, too.
While there’s no limit to how many credit cards you can have, there is a limit to how many you should carry, Kerskie says. If you carry 25, and one is stolen, how soon will you notice? Carrying just a few is safer and lets you use an “autopay and everyday” approach to reducing fraud risk.
Avoid the dangerous workaround of taking photographs of all your cards, front and back, and storing them on your phone as photos, Kerskie says. If you want to store photos of your cards on your phone, put them in an encrypted, password-protected file.
Should your phone be your wallet?
Even identity theft experts differ on exactly which cards they carry, and in what format — physical or virtual wallet in a smartphone.
“I prefer tangible over digital any day,” Kerskie says. “You have a better chance of getting your phone stolen than your wallet. You could also leave your phone behind, or drop it or it malfunctions and stops working. Now, what do you do?”
Velasquez tends to favor digital, but that comes with a lot of habits to increase cybersecurity, including treating your phone as the small computer that it is:
Having a phone passcode of at least six digits.
Updating and backing up the device regularly.
Using antivirus software.
Signing out of every app after use.
Not using “remember me” when signing into apps and websites.
Using unique, complex passwords.
Having a remote “wiping” program in case it is lost or stolen.
But it’s not for everyone. “I have a high degree of confidence not just in the technology itself, but my ability to manage it properly,” Velasquez says. “I choose security over convenience.”
If that sounds just a little too inconvenient, you can simply "be a good steward" of your cards, taking them out of your wallet when they are not needed, she says.