Credit Card Fraud: The Best Ways to Protect Yourself

credit card fraud

Have you ever been a victim of credit card fraud? I was, a few years ago, right after a vacation in Las Vegas, and it was pretty scary!

Credit card fraud happens when an individual uses someone else’s credit card or credit card information to make fraudulent purchases or take unauthorized funds. Credit card fraud usually goes hand in hand with identity theft.

How Does Credit Card Fraud Occur?

Credit card fraud can happen in several ways from a simple theft of the actual card to a store or company website getting hacked.

It can be the result of responding to phishing emails or suspicious emails that claim to be from your bank or credit card company and ask for your personal information. It can happen if a dishonest salesperson uses a client’s credit card information for his own gains. It can happen if someone secretly scans your credit card and copies the information from the magnetic strip on the back. Credit card fraud is a common crime these days and it’s important that you know how to protect yourself against it.

How Can You Protect Yourself From Credit Card Fraud?

As with similar types of fraud or theft, vigilance is really the key to protecting yourself against credit card fraud. There are several ways to make it harder for any criminal to commit this crime against you and here are six of them.

Secure your physical credit cards.

Consider keeping your credit card separate from your money or your wallet. It lowers the risk in the event that your wallet gets stolen or lost. If you have more than one credit card, don’t keep them all in one place or carry them all at one time. If you have to leave your credit card at home, hide it in a safe place, preferably under lock and key.

Secure your credit card information.

Keep your credit card PIN confidential. Keep a record of your credit card number, details, the contact information in case of loss, and keep this in a secure place.

When you use your credit card to make online purchases, make sure it is a secured site and that your transaction is encrypted.

Be aware when making credit card purchases.

Make sure to keep an eye on your credit card when you use it to buy items at a store. Check your receipts before signing them and save your copy for reference. You can use these receipts for checking when you receive your credit card statements.

If you pay for your meal at a restaurant with your credit card never let the waiter\waitress walk away with your card. If they cannot process the transaction in front of you then follow them to their nearest cash register, with your credit card in hand. Also you will find locations that now use a credit card pos machine, along with an iPad, which allows them to accept cash or credit cards as payment.

Secure your credit card statements.

Keep your credit card statements in a safe and secure place. Make sure to shred them when you decide to throw them away.

Monitor your credit card transactions.

Check your account regularly to make sure all the transactions are valid. You can take advantage of alert services from your credit card company so you can receive notifications via email, text or phone call every time charges have been made with your credit card.

Report suspicious charges or credit card loss immediately.

If you notice any questionable transactions, report it immediately. If your credit card gets lost or stolen, report it immediately so that your credit card company can have it flagged as such and no one will be able to use it.

What to do if it happens to you

If you think someone has been fraudulently using your credit card, take note of the suspicious charges and report it immediately. Contact your credit card company and any other companies that may be related to the suspicious transactions and inform them of the situation. Contact the local authorities and report the incident. It is also important to know your rights and responsibilities in the event of credit card fraud.

Have you ever been a victim of credit card fraud? How did you deal with it?


    • DC @ Young Adult Money

      DC @ Young Adult Money 02/27/2013 5:22 a.m. #

      I check my credit card statements at least once or twice a week, as well as report ASAP when I am missing one (has only happened once thankfully). There are so many businesses that have your cc information it's more important than ever to stay on top of potential fraud.

      • Sicorra

        Sicorra 02/27/2013 12:01 p.m. #

        I check frequently as well. With everything being online these days it is so simple and easy to do.

    • CarolB

      CarolB 02/27/2013 5:26 a.m. #

      Hi Sicorra, thanks for sharing this very helpful information. My cards have been hacked twice in the past three years and I am usually pretty diligent. Last year, there was a large credit card number stealing ring right at a local restaurant we had been to. They stole thousands and thousands of credit card numbers - mine was probably one of them. :( But at least so far, the two credit card companies from which my hacked cards were issued from were "on the ball" with atypical transactions and notified me before too much damage was done. It's quite interesting how they sometimes use these cards. One thief used my card 3x in 5 days to buy something and get cash out, always in the $100 range so as to not raise too much suspicion. Except for the fact that these transactions were occurring in Tennessee, many miles from where all the other transactions were occurring - meaning where I live!

      What do you know about credit cards that are micro-chipped? My primary credit card was just replaced with a new card that includes this chip.

      • Sicorra

        Sicorra 02/27/2013 12:06 p.m. #

        Twice in 3 years? Fortunately you found out quickly! Were you reimbursed for the charges that the one thief made that was getting cash back?

        We have chip Visa and Debit cards, and while the chip was designed to make things more difficult, we now have stores that let you use your chip card without a PIN if your purchase is less than $50. So my thought is, then what's the point? Plus if someone has your number and they shop online it doesn't really matter if you have a chip card or not, which again is unfortunate.

    • John S @ Frugal Rules

      John S @ Frugal Rules 02/27/2013 7:44 a.m. #

      Great tips Sicorra! I was victim to it about a year ago when my credit card company called me asking if I was vacationing on the west coast. Of course I was not, but someone had gotten a hold of my number and using it all over the place. Thankfully the cc company canceled the card and overnighted me a new one. I am generally pretty careful, so it can be a bit scary knowing something like this can happen.

      • Sicorra

        Sicorra 02/27/2013 12:11 p.m. #

        When I received that phone call from the bank, as you did, I was shaking. A million questions ran through my mind, about how it could have happened, and then once I got over that I was very intrigued by the different purchases that were made. I received a new card as well and the transactions were removed.

    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 02/27/2013 10:26 a.m. #

      Great tips, Sicorra. We have to be so vigilant these days, since it seems like there are so many ways for thieves to get our CC numbers. I have not had my CC stolen (knock on wood) but have known other people who have. Credit Card companies are getting pretty vigilant themselves as a couple of my friends were notified by the company before they even noticed and they keep a good eye on their accounts. It helped that their purchases were highly unusual from their regular purchases so that raised a red flag.

      • Sicorra

        Sicorra 02/27/2013 12:13 p.m. #

        Good to hear that you haven't been a victim.

        And yes it is interesting that the credit card companies now have triggers in place that highlight fraudulent transactions right away. I found that very interesting when it happened to me a few years ago.

    • Justin @ The Family Finances

      Justin @ The Family Finances 02/27/2013 10:26 a.m. #

      Great advice. Luckily I've never had anything fraudulent happen to me, but I know it certainly could. You're right that staying vigilant and just paying attention are two crucial preventative measures. I always review my monthly statements to make sure the only things there are what should be. Another thing to do (at least in the US) is to check your credit report three times a year, which you can do for free.

      • Sicorra

        Sicorra 02/27/2013 12:15 p.m. #

        That is a very good point about checking your credit report. Many people look at that just to see their score but if you look at it closely you might find clues of fraudulent use as well.

    • Pauline

      Pauline 02/27/2013 11:06 a.m. #

      Once I was in Paris and someone withdrew money from Colombia! The card was still with me so it must have been cloned somewhere. Thankfully the bank refunded immediately since I couldn't be two places at once.

      • Sicorra

        Sicorra 02/27/2013 12:16 p.m. #

        Good to hear that they refunded you right away! I think many banks do (hopefully).

    • Tie the Money Knot

      Tie the Money Knot 02/27/2013 12:27 p.m. #

      Good advice - this is one of those areas of personal finance that isn't fun to think about, but when it happens we will be quickly searching for information on how to handle it. I think it's vital to constantly protect information and periodically check transactions. No need to create undue stress, but still we should maintain a comfortable level of vigilance while being informed!

      • Sicorra

        Sicorra 02/27/2013 1:35 p.m. #

        True, there is no need to get paranoid. But just practice good habits when it comes to securing your personal information and watching out for any incorrect transactions

    • Corina Ramos

      Corina Ramos 02/27/2013 1:15 p.m. #

      That must have been a very stressful time and all but killed your vacation! I'm sorry you had to go through that.

      Thanks for sharing these great tips. I only have two credit cards and I keep them at home. I am very aware of my online purchases and since I don't make many it's very easy to track something out of the ordinary, so much so that when I started using it more often to push my blog they gave me a call and asked if I had been using my card more.

      Very helpful information you shared Sicorra, thanks for putting it together for us!

      • Sicorra

        Sicorra 02/27/2013 1:38 p.m. #

        Hey Corina! Thanks very much for stopping by today!

        Your phone call from your bank about using your credit card more reminds me of that episode of Friends in season 1 where Rachel gets a call from her bank asking if she is okay because she had stopped using her credit card so much. Opposite reason to you but interesting that they take the time to call people.

    • krantcents

      krantcents 02/27/2013 1:27 p.m. #

      Over the years, my credit card has been compromised a number of times. The credit card company has caught it every time before I caught it. I usually always check my bill before I pay the bill. I bought some athletic shoes online that turned out to be fakes. I returned them and the CC company helped me get not only money but the postage too.

      • Sicorra

        Sicorra 02/27/2013 1:39 p.m. #

        That is excellent that they helped you get a full refund including the postage back. One of the advantages of using a credit card.

    • Kim@Eyesonthedollar

      Kim@Eyesonthedollar 02/27/2013 8:42 p.m. #

      My business card once had a charge for over $2000 for a dental clinic. I called the number listed and it was a private residence in Montana. The credit card company refunded the charge and sent me a new card. I have no idea how they got my information, but I'm sure it happens all the time.

      • Sicorra

        Sicorra 02/28/2013 10:13 a.m. #

        I always find the stories around this interesting. Good thing you got it sorted out.

    • Justin@TheFrugalPath

      Justin@TheFrugalPath 02/27/2013 9:01 p.m. #

      A while back my father in law got a message from our mechanic explaining that their customer's card numbers were stolen.
      Last month, we used our card at the same shop and a week later a suspicious purchase was made and we received a new card. I'm hoping that it was from the mechanics because I don't like the idea of having to look over my shoulder every time I use a card.

      • Sicorra

        Sicorra 02/28/2013 10:15 a.m. #

        Interesting story. Businesses shouldn't be allowed to keep credit card numbers on file anymore.

    • KK @ Student Debt Survivor

      KK @ Student Debt Survivor 02/28/2013 6:39 a.m. #

      I recently received a fraud alert from one of my card companies that my card had been used at a hotel somewhere in the middle of the country. I hadn't used that card in over a year so that flagged something for them to question whether it was a fraudulent charge, I'm sure glad they caught it because I hadn't looked at my statements (there were no charges) for several months. The refunded the charges immediately, thankfully. These are good reminders I need to stay more on top of this.

      • Sicorra

        Sicorra 02/28/2013 10:17 a.m. #

        You bring up a very good point! Quite often people stop using one or all of their cards but the accounts remain open. Because they stop using them they may stop checking their statements figuring they do not owe anything so why should they, but that is where it becomes more important than ever to check those.

    • AverageJoe

      AverageJoe 02/28/2013 8:04 a.m. #

      I WAS a victim of credit card fraud. I was buying stuff on the internet and didn't know (yet) to check for the "httpS:" and the lock on the site to make sure it was secure. Sure enough, moments after my purpose, my credit card was drained (the bank told me later that within three seconds the crook had purchased high priced computer equipment and porn...whatever....).

      I called the bank and their fraud department worked with me. They credited all the stolen money back to my account and they went after the thief.

      • Sicorra

        Sicorra 02/28/2013 10:21 a.m. #

        Good to hear it all got sorted out for you!
        Clearly that site you bought stuff on was being monitored, and how quickly they work to spend anyone else's money.

        The thing is most of these criminals are never caught and the credit card company ends up writing off the loss.

    • Kevin Watts

      Kevin Watts 03/02/2013 10:44 a.m. #

      Important post. It is easy to get careless with your credit card. Luckily I have never been a victim yet but I have had few friends not been so lucky. The most important thing is to report any suspicious activity as quickly as you can.

    • Tanya @ Eat Laugh Purr

      Tanya @ Eat Laugh Purr 03/05/2013 7:04 p.m. #

      Great post! Unfortunately I have been the victim of credit card fraud too. It happened on my Corporate card. My best guess is someone at one of the hotels that I was working with to host an event took my number since they had it on file. Thankfully, AMEX caught it right away and called me. I'm really good at monitoring my personal cards, but honestly never paid much attention to my Corporate card beyond paying the bill. :)

      • Sicorra

        Sicorra 03/06/2013 10:48 a.m. #

        Sorry to hear that your corporate card was a victim. At least when this happens many times the credit card companies are very quick to notify us and to help look after things.

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