Why you need to sign your credit card

This post comes from Matt Brownell at partner site Credit.com.

On the back of every credit card are two security measures. One is the CVV code, a three-digit code used for "card not present" transactions like making an online purchase. Any reputable online retailer will ask for that code upon checkout to make sure that you actually have the card in your possession (and aren't a thief who's simply stolen the data from the front of the card).

The other security measure sits right next to the CVV code, and it's comparatively low-tech: a signature field, with a warning that your card is "not valid unless signed." Much as online retailers are supposed to ask for the CVV code, so too are merchants supposed to check for your signature on the back of the card and compare it with your signed receipt to make sure they match.

But if you're hard-pressed to remember the last time a cashier examined your signature, you're not alone.

Signing your card "could possibly deter someone from using a card that's been lost," says Raul Vargas, the manager of fraud operations at Identity Theft 911. "But I'd say that's outdated --merchants no longer check it." While checking every card's signature might catch the occasional fraudulent transaction and thus protect the merchant from chargebacks by the bank, Vargas says it's still not worth the merchant's time.

That's especially true considering that a thief could easily forge your signature on the receipt. After all, it's not as if the average cashier has training in handwriting analysis. (Post continues below video.)

"I think you'd be hard-pressed to find anyone in the security industry who sees it as a substantive and significant security measure in isolation," says Alistair Newton, an analyst at research firm Gartner specializing in the banking industry. "It's pretty unsophisticated."

That's not to say it's entirely useless, though. Newton points out that if the person who stole your card spends five minutes practicing your signature before using your card, that gives you another five minutes to discover the theft and call to cancel your card.

And it's not entirely out of the question that a merchant will ask to see the back of the card.

Vargas says he was recently asked for his signature when making an expensive purchase at a jewelry store, as such high-value merchants are frequently targeted by credit card thieves who want to quickly purchase an expensive item, then pawn it for cash before the theft is discovered. So it's worth taking 10 seconds to sign the back of the card for those rare occasions when a fraud-wary merchant asks to see it.

Of course, most credit cards offer zero liability on fraudulent purchases, so you might not be too worried about credit card fraud. But if you haven't signed the card, those protections might not come into play. Your signature, says Vargas, serves to ratify the cardholder agreement between you and the issuing bank. (Indeed, he says the signature field was implemented in part to make sure cardholders couldn't try to escape charges by claiming that they never agreed to the terms of the contract.) As such, the bank could say that an unsigned card isn't covered by the fraud protections in the contract.

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"If it's not signed, then technically the contract between the bank and consumer has not been ratified," he says. "If (a thief) makes tons of charges and the merchant tells the bank that it wasn't signed, they can refuse fraud protection."

So while signing the back of your card isn't an ironclad protection against fraud, there are definitely scenarios in which doing so can save you a lot of trouble. If you haven't signed your cards yet, find a pen now.

More from Credit.com and MSN Money:

• Why do credit cards have expiration dates?
• Can you have too much credit?
• Why shredding your documents isn't enough
• Your secret credit card weapon
• Find a better credit card
• ID theft: Are we doomed?