Fantastic plastic: Ways to dodge credit card fraud
Although your credit card may be safely in your wallet or purse, thieves may have already accessed your account information and are spending your hard-earned dollars. In this digital age, crooks can access your credit card number a variety of ways. So how can you protect your identity and make sure you are the only one swiping your plastic?
Plastic is fantastic, but it can also be worrisome to the millions of consumers who regularly use their credit cards for purchases.
That fear isn't unfounded — the Federal Trade Commission estimates that credit card fraud is responsible for 26 percent of all types of identity theft, totaling more than $500 million in damages each year.
Here are some strategies to help you dodge credit card fraud so you can avoid being a victim of identity theft.
By limiting the accessibility of your credit account, you can prevent fraud before it even happens, says Howard Dvorkin, founder of Consolidated Credit Counseling Services.
"Contact your credit card company and ask to automatically decline any payments made to an international or overseas merchant," he said. "Lots of credit thieves actually reside outside of the United States and rely on hacking into computer systems to steal credit card information."
Set up alerts
Most credit card companies allow customers to set up alerts to notify them when suspicious activity appears on their statement — either via text or by a phone call.
"For example, I went out to a new restaurant for the first time, used my credit card to pay for the meal, and minutes later, my bank called," Dvorkin said. "They had never seen the restaurant name on my bill before and checked to make sure it was a legitimate transaction."
Check statements often
Although checking your credit card statement often may seem like a hassle, Dvorkin recommends doing it every day — especially if you use your credit card on a daily basis.
"Sign up for online banking and download an app for your smartphone to make checkups easy," he advised. "If fraudulent activity does show up on your account, you'll be able to contact a representative and stop the payment before it even goes through."
Keep those statements safe
Some statements include your full credit card number. Always check your mail regularly and soon after it arrives, if possible, and keep those statements in a safe location.
If you want to discard the statements, shred them before disposing of them.
Keep in touch with the card issuer
If you're traveling out of town, let the card issuer know so your account isn't frozen if the financial institution sees unusual charges.
Let your card issuer know right away if you move, as well, so new cards aren't sent to old addresses.
If your card is stolen or lost, notify the financial institution right away. To make this easier, keep a record of your credit card numbers, as well as the contact information for the financial institutions.