Credit cards are essential financial tools that make life much easier, allowing people to purchase goods and services and, in some cases, earn rewards. However, credit card fraud is a growing concern that everyone needs to be aware of. No one wants to open a credit card statement and find thousands of dollars worth of unknown charges. If you use credit cards at all, you should know what credit card fraud is, how it can occur, and, most importantly, how to protect your credit cards from scammers.
Credit card protection begins with exercising caution when using them. Only use your credit card on secure websites and with reputable merchants. Never give your credit card information to anyone over the phone or through email, and be wary of unsolicited offers or requests for personal information.
What is credit card fraud?
Credit card fraud occurs when someone uses your credit card details to make unauthorized purchases or accesses your funds without your knowledge or consent. Victims of fraud may suffer financial losses, a damaged credit score and an array of other issues. Fraudulent activity can range from small unauthorized charges to large purchases made by someone who has stolen your credit card information.
If you notice any unauthorized charges on your statement, report the credit card fraud immediately if you need to dispute a credit card charge. Your credit card issuer will investigate the charges and, if they are found to be fraudulent, will typically remove them from your account. Monitoring your credit history is another way to catch suspicious activity. Many of the companies on our list of the best identity theft protection services make this task easy.
How can credit card fraud occur?
Some of the ways in which credit card fraud can happen are stealing actual cards, hacking into accounts, phishing scams and credit card skimming.
Physical theft is one of the most straightforward ways that credit card fraud can occur. A thief steals your wallet or purse or may physically take your credit card from you. Once they have the physical card, they use it to purchase goods or services or withdraw cash from your account.
Protecting yourself from physical theft can be tricky. Don't make yourself an easy target by flashing money or cards around while in public. Keep your wallet or purse in a safe place. But also remember that if a thief threatens you, no amount of money is worth your physical safety.
Many people lower their guard when using a credit card from the safety of their own home or phone to make online purchases. Hackers exploit vulnerabilities in technology and user habits to gain access to a computer or phone. Then, they can obtain the necessary credit card information to make purchases or transfer funds to their accounts.
Using strong and unique passwords for all your accounts is crucial for thwarting these attacks. Password manager programs can generate and store complex passwords securely if you need help.
A hacker may access your credit card account information through various means, such as phishing emails or malware. Malware, or malicious software, is as scary as it sounds. Hackers won't come out and tell you to download their malware; they’ll often disguise it as a safe file a user might have no reason to be wary of. After tricking a user into downloading the program, hackers can use the malware to gain access to credit card information in several ways:
- Keylogging malware captures every keystroke a user makes on their computer, including credit card numbers and other sensitive information.
- Screen capture malware takes screenshots of the credit card information displayed on the victim's computer screen.
- Remote access malware allows hackers to access a victim's computer and search for credit card information.
- Man-in-the-middle attacks occur when hackers intercept communications between the victim and a legitimate website, allowing them to steal credit card information as it’s transmitted.
To protect credit card information from malware-based attacks, keep your computer and antivirus software up to date, avoid clicking on suspicious links or downloading unknown attachments and use two-factor authentication whenever possible.
Phishing scams are another common method scammers use to steal credit card information. As the name implies, the scammer designs a hook to catch the victim. That hook could come in many different forms but generally happens via an email or text message pretending to be a legitimate organization, such as your bank or credit card company. You may be asked to click on a link or provide personal information like your credit card number and security code or usernames and passwords. This same method can be used to get you to download malware.
To protect against phishing scams, never disclose your personal information when responding to an unsolicited email or text message, and make sure you know how your bank or credit card company contact you. Look carefully at the return address on any purportedly official financial email. Scammers will often use email addresses that are similar to official ones, with small changes.
Also, be vigilant while using any messaging service. For example, phishing is one of the most common WhatsApp scams. If you suspect a message may be fraudulent, contact the organization directly using a phone number or email address you know is legitimate.
Phishing scams can take many forms, but here are some of the most common ones:
- Email phishing is the most common type of phishing scam. Criminals send emails that appear to be from a legitimate source, such as a bank or a social media site, asking the recipient to click on a link or provide personal information. Most email providers catch many, but not all, of these emails and automatically move them to a spam or junk folder.
- Smishing involves text messages instead of emails. The criminals send text messages that appear to be from a legitimate source and ask for sensitive information or direct the recipient to a link.
- Spear phishing is a targeted attack in which criminals send personalized emails to specific individuals or groups. The criminals often use information obtained from social media or other sources to make the emails more convincing.
- Vishing uses voice calls instead of emails or text messages. The criminals call the victim and pretend to be a representative from a legitimate entity, such as a bank or a credit card company, to obtain personal information.
- Social media phishing involves criminals creating fake social media profiles or pages to obtain personal information from users. They may also use social media to send messages that appear to be from a friend or a company, directing the receiver to click on a link or provide personal information.
Every day scammers send people phone calls, emails and other messages made to take advantage of the recipients. Be vigilant and cautious when somebody requests personal information or before downloading a file through email, text messages, phone calls, or social media. Before sharing any sensitive information, verify the legitimacy of the request. Even if a phishing attempt doesn't ask for credit card information directly, identity theft and social security scams are also possible.
Credit card skimming
Credit card skimming is stealing credit card information from a physical card reader, such as at an ATM or a gas pump. Scammers install skimmers to the card reader terminal and capture your credit card information when you swipe your card.
Always inspect card readers before using them. Look for any signs of tampering or loose components, and consider using the chip reader instead of swiping your card. If you see a terminal that looks suspicious, report it right away.
With a terminal, you have the time to decide if it appears safe. But your vigilance shouldn't end there. You should protect credit cards from electronic pickpocketing, as well. While not common, criminals can use a scanner to wirelessly capture card information if the scanner gets close enough.
No one wants to worry about the person behind them in line at the store stealing their information. To set your mind at ease, you can buy RFID-blocking wallets that protect credit cards from scanners. For a sleeker option, get a specially-designed sleeve to protect credit cards. These accessories protect credit card chip radio frequencies that emit account information.
Credit card fraud prevention tips
Credit card fraud can happen to anyone at any time. However, you don't have to stay up all night wondering how to protect yourself from credit card fraud. Take steps to protect your credit card information as soon as you can. Here are some tips to help you prevent credit card fraud.
Be careful who you give your information to
One of the most important things you can do to protect your credit cards is to never give your credit card number or personal information to someone you don't trust. Make sure that the website or business you are dealing with is legitimate and reputable. Some scammers create websites that look identical to official sites, with the only difference being the actual website address. Look for errors in spelling or unusual domains.
Use tools that protect your data
Different tools can keep your data safe in various ways. The safest approach for credit card protection would be to have more than one line of defense.
Virtual private network (VPN)
A Virtual Private Network (VPN) encrypts your data and keeps your browsing history private. VPNs are especially useful for blocking hackers from accessing your personal and financial information when you're on public wifi or any unsecured network.
A password manager stores all your passwords in one secure place, and you only need to remember one master password. You no longer have an excuse for using your pet's name as the password for all your accounts, which makes you vulnerable to hackers.
Virtual credit cards
Virtual credit cards are a relatively new tool to protect credit card information. Virtual credit cards link to your actual credit card but use a temporary number for online transactions. If some unscrupulous character gets hold of your virtual credit card number, they won't be able to use it for another transaction.
Install malware protection
Malware protection software is one of the best ways of preventing credit card fraud. It scans your computer for any malicious programs and prevents them from running. Should you fall prey to a well-crafted scheme and unknowingly download malware, the malware protection software should keep your computer safe.
Don't use public wifi to access personal or financial information
Public wifi networks are often unsecured, making them easy targets for hackers looking to steal credit card information. When you use a public wifi network to access personal or financial information, you're basically announcing that information to any hacker on the network. Instead, use a secure wifi network or your mobile data plan to access this information. If you must use public wifi, use a virtual private network (VPN) to encrypt and protect your data from prying eyes.
Insert the chip instead of swiping
Chip cards, or EMV cards, are more secure than traditional magnetic stripe cards. Inserting a chip card into a chip-enabled terminal generates a unique code for that transaction. This code can't be used again, making it difficult for criminals to use your credit card information. Whenever possible, use your chip card instead of swiping the magnetic stripe.
Heed your browser's "unsecure website" warning
When you're browsing the internet, your browser will sometimes display a warning that a website is "not secure." That's your cue to proceed with caution because the website doesn't use encryption to protect your data. Count on hackers waiting for personal or financial information to fly across these websites. If you want to be sure a website uses encryption, look for the "https" in the website's URL. That "s" means "secure."
The dangers of your credit card details falling into the wrong hands
All credit card issuers employ various methods of credit card fraud detection but don't rely solely on those methods. The scammers’ business is to find ways around them. The consequences of credit card fraud can be severe. Racking up debt, paying for criminals’ fun, and ruined credit are all possible outcomes. Worse still, losing control of sensitive personal information can lead to identity theft. The emotional toll would weigh heavily even if you trust that financial institutions will support you through such an ordeal.
If you suspect you have become the victim of fraudulent activity, report the credit card fraud as soon as possible can limit the damage. Many credit card companies have fraud protection policies that reimburse you for unauthorized charges. However, it's essential to read the fine print and understand the terms and conditions of your credit card agreement.
Summary of how to protect your credit cards from scammers
Credit card fraud can happen to anyone, so don't beat yourself up if it happens to you. Take steps now to protect your credit card information. Be careful who you give your information to, use tools that protect your data and stay vigilant for any suspicious activity on your account. Monitor your credit card accounts regularly for unauthorized transactions and immediately report any suspicious activity to your financial institution. Following these simple steps can prevent credit card fraud and keep your financial information safe.