9 Ways to Prevent Credit Card Fraud

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.

While it’s important to know what steps to take if you’re a victim of fraud, it’s even better to take credit card fraud prevention steps from the moment you get a new credit card.

The two are similar, but identity theft is broader in reach. A thief who steals your identity might use your personal information, such as your Social Security number, to open a new credit card account, get a loan or even file taxes in your name.

Credit card fraud is a form of identity theft that happens when your account is used for unauthorized purchases. For instance, when you check your credit card account online, you might notice that there are purchases that you didn’t make. Or you could see an account you didn’t open listed on your credit report.

There’s no foolproof strategy that gives you total credit card fraud protection, but since some everyday actions can increase your fraud risk, it’s worth your time to learn a few credit card fraud prevention strategies.

Sometimes, just being aware of what to watch out for can help you make better decisions and avert credit card fraud. Let’s take a look at nine easy ways to prevent fraud.

If the site is secure, you’ll see a padlock on the left side of the address bar at the top of your browser. Also, the web address will begin with “https.” Do not enter your credit card number on a website that isn’t secure. And let’s be honest, if a business isn’t offering data security for its customers, it doesn’t deserve your business.

These scams can happen by phone, email, text or even via snail mail. The objective is to get you to hand over your financial information. Here’s an example: I recently got a call from what I thought was the Social Security Administration. I was told I needed to confirm my Social Security number to keep getting Social Security checks. First, I don’t get Social Security checks. And since I knew this was a common scam, I was suspicious from the start. The caller ID even showed the call was from the SSA.

Today’s scams are technically sophisticated. You might get an email with what appears to be your bank’s logo, and you might assume it’s legitimate. If the email requests your credit card account number, you know it’s fake. A government agency or financial institution will never ask you to give sensitive information that way.

Another way to spot these scams? Look for typos in the communication. Thieves can be clever, but they often can’t spell correctly.

Credit card thieves often use a device called a skimmer to steal your credit card information. They try to hide these devices on ATMs and fuel pumps and “skim” the data from the magnetic strip on the back of your credit card. EMV chip-enabled credit cards are vulnerable to skimming because the cards still have a magnetic strip.

Whenever you pay for gas at the pump or use an ATM, look for signs of tampering. If you’re unsure at all, pay for your gas inside the store. If it’s an ATM that looks altered, find another ATM that’s affiliated with your bank. Sometimes, a tiny camera is used to get a shot of your PIN. Use your hand to shield the numbers as you type it in.

If you think this doesn’t need to be said, spend a few hours on any social media platform. If you have kids online, give them a serious talk about revealing too much personal information. Thieves comb through social media looking for clues that they can piece together about your life – where you live, your birthday, your financial data and much more. Tip: It’s fine to post a cute photo of your dog, but don’t use your pet’s name for a password.

Your credit card information is less likely to be skimmed at an in-store card reader, but the threat still exists. Increase your credit card fraud protection by using mobile payment apps, such as Apple Pay or Google Pay.

These apps use a technology called tokenization, which allows you to pay without exposing your actual credit card account number. So even if your transaction information falls into the wrong hands, your actual account number remains safe. And if you have a password-protected phone, your screen may remain locked even if the phone is stolen.

I know this is a tough rule to follow because it takes time. You have to stop, find your credit card and type in the account number. Even with retailers you trust, a data breach can occur, so it’s not a good idea to store your account information on a website. But if you can handle typing in your card account number each time, it’s an effective way to decrease your fraud risk.

If you disclose your credit card number or bank account over public Wi-Fi, you’ll be vulnerable to hackers because these networks are often unencrypted. Thieves may be lurking in public areas waiting to catch someone off guard and steal their information. Whatever financial moves you need to make, wait until you’re on a secure network.

But this doesn’t mean you have to avoid public Wi-Fi altogether. You can use a virtual private network, or VPN, to keep your information safe from crafty eavesdroppers.

As soon as you realize your credit card is gone, report this immediately to your credit card issuer so it can freeze your account.

If you aren’t sure how long your card has been missing, the safest thing to do is set up a fraud alert or a credit freeze. With a fraud alert, when a thief tries to open an account, the creditor will typically call you to verify your identity and confirm that you were the one who applied. With a credit freeze, creditors can’t even access your credit reports, making it impossible for them to approve a credit application by an impostor.

You regularly get a free annual credit report every 12 months from each of the three major credit bureaus: Equifax, Experian and TransUnion. Right now through the end of 2023, the credit bureaus are offering free weekly online credit reports. But unless you believe you’re at high risk for fraud, checking one of your reports every four months is sufficient.

For starters, you want to make sure all the data in your report is accurate. If there’s a big error, it’s possible it will have a negative impact on your credit score. You also want to make sure that you don’t see new accounts that you didn’t open. If you do, this is a sign of credit card fraud and possible identity theft. You’ll need to take steps to report the fraud as soon as possible.

It’s true that you could be diligent about credit card fraud prevention and still be a victim of fraud. Fortunately, many of the major card issuers offer zero liability on fraudulent purchases. And federal law limits your liability to $50 if you report the fraud within 60 days.

So, it’s still your responsibility to be on the lookout for fraud and to report suspicious transactions as soon as possible. If you detect fraud in the early stages, you’ll go a long way toward minimizing the financial – and emotional – damage.

Your last step for credit card fraud prevention: Check your online financial accounts several times a week. Look for signs of fraudulent purchases and report them immediately.