What is a postal code on a credit card?

The credit card postal code is not the same as the zip code on your physical credit card.

It's the zip code associated with your billing address.

Merchants use the postal code to verify the identity of the cardholder and prevent fraud.

It's an extra layer of security beyond just the card number.

If you move and don't update your billing address with the credit card company, your new postal code won't match and transactions may be declined.

The postal code is required for certain types of purchases, like online or over the phone, but not always for in-person transactions.

Some credit card companies allow you to have multiple postal codes on file, so you can use different billing addresses for different types of purchases.

The postal code requirement was introduced in the 1990s as part of the Address Verification Service (AVS) to combat credit card fraud.

Merchants must obtain the postal code in addition to the card number and expiration date to get full authorization for a transaction.

A mismatch between the entered postal code and the one on file can trigger a "partial approval" where the transaction goes through but with a higher fraud risk.

Postal codes are tied to physical street addresses, not post office boxes, so you can't use a P.O.

box as your credit card billing address.

In some countries, the equivalent to the US postal code is called a "postcode" instead.

The verification process works the same way.

Certain credit card rewards programs may track your spending by postal code to offer location-based perks or discounts.

Lost or stolen credit cards can be more easily misused if the thief also has access to your postal code information.

Recurring payments like subscriptions often require you to re-enter your postal code each time, even if the card number stays the same.

Some merchants will let you complete a transaction without the postal code, but may charge a higher rate or fee if they can't fully verify the cardholder.

The postal code requirement applies to debit cards too, not just credit cards, as an anti-fraud measure.

In the digital age, the postal code has become more important than the card's physical security features for verifying identity.

Merchants that don't collect the postal code may be liable for any fraudulent transactions that occur, incentivizing them to always request it.

The postal code is a static piece of information, unlike a dynamic CVV or expiration date, making it a less secure way to verify identity long-term.

Some credit card issuers now offer virtual or digital card numbers that can have different postal codes associated with them.

As online and mobile payments continue to grow, the postal code will likely become an even more crucial piece of credit card authentication.