If you've elected to cheat on your spouse using an online platform, you probably made a fiscal mistake: Paying with your credit card. 

Over the weekend, extramarital dating website Ashley Madison was breached by a group of hackers called "The Impact Team," who claim to have attained personal information (real names, addresses, financial records, emails) of more than 37 million users. 

The hackers threaten to release the information unless Ashley Madison and its affiliated platform Established Men are shut down. Avid Life Media, the parent company of both sites, has issued an apology and is now allowing users to delete their data for free, waiving the usual $19 fee. 

The extent of the hack is still unknown, but if the hackers have indeed obtained users' personal data, the deletion of an account won't save cheaters from the aftermath of a potential leak.

The biggest mistake was already made when the majority of Ashley Madison users used their own credit cards to pay for the service, despite the fact that the site accepts anonymous payment methods.

We all know the potential dangers of using credit cards, but it's a natural routine to swipe for purchases ranging from coffees to hotel rooms, and even employee compensation. The fact still remains, though, that any transaction you make with a service gives them access to sensitive data. Yes, that includes your name.

The smart thing to do would have been to use a prepaid card, which has security benefits. You aren't handing over as much personal information, since it's effectively like paying in cash, says Kari Luckett, an editor at CompareCards.com.

Adulterers aren't the only ones who stand to benefit from this payment method. If you're a business owner, prepaid cards make financing employees easier. You can also limit their access to merchants to better enforce corporate spending policies. It's also impossible to overdraft the account. 

It's still important that you consider the disadvantages. Aside from the lack of rewards that traditional checking accounts have, reloadable cards carry serious security risks. One way to avoid them is to make sure that the card is FDIC-insured (Federal Deposit Insurance Corporation), and that it isn't linked to your personal checking account, Luckett advises. This is especially crucial if you plan on making online purchases.

Susan Grant, Director of Consumer Protection and Privacy at the Consumer Federation of America, adds that using prepaid cards can be problematic if you end up having to dispute fraudulent charges. "If you use that [prepaid debit card], and somebody gets ahold of the account information, they can wipe out what's in your bank account or what's on your card," she said.

Still, if properly insured, prepaid cards are worth considering if you want to safeguard personal information in the event of a large-scale data breach. Just be mindful of what you're using it for, and carefully weigh the benefits and drawbacks.

Published on: Jul 21, 2015