It seems hardly a week goes by without a news story speculating that hackers have obtained personal details from one website or another. So just how secure is our information on the internet, and is it safe to shop or bank online? Firsly we need to put things in perspective. There are risks associated with other methods such as telephone banking, and even high street shopping. But people tend to understand the dangers better so can minimise the risks. Would you walk round with £1000 in your back pocket or leave your passport on display in the car?
The venerable username and password is still the most common method of proving who you are online. So it is critical you use an appropriately strong password which is difficult to guess, and change it regularly. However tempting it may be don't use the same password for everything. Use the strongest passwords for those online accounts which pose the biggest risk such as home banking.I would recommend a minimum of 8 characters, including some capitals and some numbers. Many banks now offer two-factor authentication - something you know (eg password) and something you have (eg random PIN generator).

VISA and MasterCard now offer a more secure system where you enter a password in addition to your card details when buying online. But what happens if your card details are stolen? One option is to have a card with a low credit limit which you use just for online purchases. Few people buy very expensive goods online. I don't know why the credit card card companies don't let you set a limit on the value of a single transaction.

Finally be careful what you publish online. Have you put information on your public Facebook profile which is best kept private? If your bank security question is your favourite colour then that could be used to reset your password.