We’re not as secure as we thought. The major American banks are falling behind when it comes to providing a competent and efficient credit card and debit card prevention system. This news comes at the heels of data released by the Nilson Report, which shows that for every $100 spent through credit and debit purchases in 2010, approximately 4.46 cents was lost to hackers and thieves.

While this number is substantial, it is actually decreased from the previous year, when 4.71 cents were lost to fraud. This information points out the huge flaw in our current financial system, but it is a problem that the American government is attempting to fix.

Banks overseas, mainly Asia and Europe, are more secure than American banks, according to the Nilson Report. In Europe and Asia, it is not uncommon to find a card with computerized chips or fingerprint recognition in order to make purchasing secure for the consumer.

On the other hand, banks in the U.S. are moving at a snail’s pace when it comes to changing and updating their credit card and debit card security. And that data shows it. According to the Nilson report, last year the United States represented 47 percent of all fraud losses in the global market. This figure has been steadily increasing, as it was at 44 percent in 2005, and 46.5 percent in 2009.

"We [the United States] have a disproportionate percentage of the global total, and a considerable part of that is because we have an old infrastructure," Robertson said. "The U.S. will account for a steadily rising share of the global total until it embraces chip-based card security."

Other factors play into it as well. According to Robertson, America faces difficulty on many levels. For instance, in Asian banks and financial centers, banks will decline transactions that they deem risky, while the United States are more competitive and have to be more lenient with risky transactions, as many American consumer have more than one credit card from different credit card issuers.

Worldwide, $7.6 billion lost dollars were attributed to fraud in 2010. This is 10 percent more than what the number was in 2009. This could be in part to the string of bank breaches that happened this year alone. Earlier this year, Citigroup Inc. announced that 200,000 of its credit cardholders accounts were compromised due to hackers. Lockheed Martin Corp., Sony, and Google Inc., are other companies that have suffered electronic breaches of security.

Despite the increasing number of security breaches and the amount of fraud losses, Robertson claims that American banks are still profitable. But the fact remains that the banks overseas are handling their credit cards in a more secure manner. European banks have implemented an extra security figure called “chip-and-pin” which is embedded into a card and makes it more difficult for thieves to skim credit card information and make fake credit cards in the future. This is an issue that American’s still face.

One good thing about “chip-and-pin” cards is that they don’t have a moveable payment terminal. That’s good news, because even when you’re at a restaurant you don’t have to part with your card, the waiter or waitress will bring the payment terminal to your table.

Many analysts believe that the United States will hop on the bandwagon once the upgrades prove profitable to our nation. According to the Nilson Report data, total global credit card losses have consecutively increased since 1994.

The security of the American credit card is a real issue in this decade. For that reason it is important to be vigilant when you apply for a credit card, and make sure you factor in credit card security, identity theft and fraud protection.