Credit card fraud was the most frequent type of fraud reported in 2022, according to the Federal Trade Commission. The total loss due to credit card fraud? A whopping $219 million.
It’s advisable to take preventative measures against credit card fraud right from the moment you receive a new credit card, rather than only knowing what to do in case you fall victim to it.
Federal laws and most credit card companies offer zero-liability policies, meaning that the bank bears the monetary loss in case of fraud, and the victim’s maximum liability is limited to $50 if reported within 60 days.
Nevertheless, having to report a stolen credit card number, waiting for a new card to be delivered, and updating autopay accounts can be a hassle for consumers, while for some, there may be an emotional toll from the feeling of privacy breach.
While you won’t be able to avoid all credit card fraud, you can limit your vulnerability and avoid hassles. So, here are 7 tips how to protect yourself from credit card fraud.
1. Beware of ‘phishing’
Phishing is a fraudulent activity that aims to deceive consumers into giving out sensitive information, such as their credit card numbers, through various channels, such as email, phone, text, or even traditional mail.
Scammers may attempt to gain trust by using logos and names of familiar companies, and misrepresenting themselves. To protect yourself, it’s important to be cautious of any requests for personal information, regardless of where they come from, and to verify the authenticity of the party requesting your credit card number before providing it.
2. Identify ‘skimming’
Skimming refers to the act of stealing a credit card number during a legitimate transaction, which is then used to create a fake card or to conduct unauthorized transactions that do not require a physical card, such as online purchases.
Examples of how skimming can occur include when a restaurant waiter or a call center operator handles your credit card, or when a skimming device is secretly installed on a payment terminal, particularly at unstaffed locations such as gas pumps or ATMs.
Although chip cards have helped reduce fraud resulting from skimming devices, it’s important to remain vigilant when using unattended payment terminals. If you notice anything suspicious in the card slot, avoid using it and notify an employee immediately.
3. Use different cards for autopay vs. everyday spending
To avoid the inconvenience of having to change your autopay accounts and risk incurring a late payment fee in case of a credit card breach, it may be beneficial to designate one of your credit cards solely for autopay accounts, such as website subscriptions and wireless phone bills.
It’s recommended that you refrain from using this card for any other purchases so that it’s not being used by retail clerks, restaurant servers, or at gas station pump readers. Instead, use other payment cards for your everyday spending. While this strategy won’t prevent fraud on your other credit cards, it can at least prevent the hassle of having to update your autopay accounts in case of a breach.
4. Pay with your phone
Mobile payment services, such as Apple Pay and Google Pay, offer a safer alternative for in-store payments by using tokenization technology that generates unique payment information for each transaction, instead of sharing actual credit card numbers with the merchant.
Moreover, these services typically require the user to authenticate with a password or biometric identification, like a fingerprint, to unlock the device’s lock screen, making it unusable without proper identification.
5. Think twice about paying for anti-fraud services
Although credit monitoring services may market themselves as a way to protect you from identity theft, in reality, they only alert you after an incident has already occurred. These services essentially monitor your credit reports and notify you of any suspicious activity, but they don’t offer any proactive protection against fraud. In fact, there are steps you can take on your own, such as regularly checking your credit reports, setting up fraud alerts, and freezing your credit, which can provide similar protection without the cost of a monitoring service.
It’s also worth noting that, as a consumer, you’re typically not liable for fraudulent credit card purchases, which may reduce the incentive to pay extra for insurance or a monitoring service. While these services may offer additional peace of mind, it’s important to weigh the costs and benefits before signing up. In general, taking basic steps to protect your personal information and monitoring your accounts regularly can go a long way in preventing and detecting identity theft.
6. Don’t Use Public Wi-Fi for Financial Transactions
Disclosing your credit card number or bank account information over public Wi-Fi can make you vulnerable to hackers since these networks are often unencrypted, leaving your personal information exposed. Cybercriminals may be waiting in public places, such as coffee shops or airports, to intercept sensitive data and steal it for their own purposes.
To protect yourself, it’s recommended that you wait until you’re on a secure network before making any financial transactions or sharing sensitive information online. However, this doesn’t mean you have to completely avoid using public Wi-Fi. A safer option is to use a virtual private network (VPN), which encrypts your internet traffic and provides a secure connection between your device and the internet. By using a VPN, you can protect your information from potential hackers and keep your personal data safe.
7. Don’t Save Your Credit Card Information Online
Following this rule can be challenging as it requires time and effort. To input your credit card number, you must pause, locate your card, and manually enter the account number. Even with retailers that you trust, it’s still risky to store your account information on their website as data breaches can happen at any time.
Storing your credit card information on a website for convenience may save time in the short run, but it could be risky in the long run. In the event of a data breach, your personal information could be exposed, leading to potential fraud and identity theft. Therefore, it’s best to take the time to manually enter your credit card information each time you make a purchase to reduce the risk of your information being compromised.
I hope these tips will help you to stay safe and protect your credit card details from fraudsters.
