Credit Card
woman learning how to protect herself from credit card fraud.

Key takeaways

  • Review your credit card and bank statements every month, and your credit report regularly.
  • Don’t carry cards you don’t intend to use.
  • When you shop online, use only secure sites.

Credit card fraud happens more often than you might think in the United States. If you’ve recently been a victim of fraud, you’re not alone.

Some of the most common methods of credit card fraud could happen if your physical cards — debit cards or credit cards — are stolen, or your account is hacked online. This form of identity theft could result in fraudulent charges or cash advances, and loss of money. Even worse, it could be a major headache to sort out with your credit card company or bank.

In this article, we’ll give you some tips on how to avoid credit card fraud, and what to do if you notice any unauthorized purchases or fraudulent transactions on your monthly statement. The world of finance can be tough to navigate on your own — and even treacherous. Sometimes, it’s hard to know what to do next or to see the progress you’ve made. Best Egg Financial Health is in your corner. We’re giving you the tools and knowledge to take control of your finances, make confident decisions, and reach your goals.

Types of credit card fraud

Credit card theft can occur in more ways than ever. Here are some of the most common examples of credit card fraud and how identity thieves gain access to your credit card accounts.

Physical credit card is stolen

This is a classic method of credit or debit card fraud. This could happen if your card is taken from your wallet or bag or swiped from a restaurant table while you’re paying the bill. Another common occurrence is newly issued cards being stolen while going through the mail delivery system. Your card could also be taken if you accidentally leave it behind in a store’s card reader or a gas station pump. Thieves could then drain your account in just a couple of hours from cash machines. For newly issued cards, this could also result in an account being opened and used by a thief without you knowing that the account is active or even exists.

Cloned cards

This newer method happens when you unknowingly swipe your card in what is called a credit card skimmer. These devices fit over card readers at gas stations and retail sales terminals and allow thieves to obtain your information from the magnetic strip on your card.

Account takeover

This happens when a thief who has access to your personal identification information — such as your Social Security number — contacts your credit card issuer to change your password, PIN, contact information, or mailing address. This gives the thief control over your account and prevents you from accessing the account.

Digital or virtual card theft

It has become increasingly common to use credit cards when doing online shopping. Unfortunately, when you make an online purchase, your credit card account may be susceptible to theft. This could happen when internet merchants are hacked or there is a breach of systems (like a data breach). Sometimes thieves hack into the electronic devices where you have stored payment methods. This could result in unauthorized credit card charges made by thieves at other online retailers.

Fraudulent websites or digital messaging

This is a newer but common credit card scam. Thieves are increasingly building very convincing fake websites, sending texts, emailing people, and making fraudulent phone calls. They pose as federal government programs, like SNAP (Supplemental Nutrition Assistance Program), to get your card information. If you receive a suspicious email or text, do not submit any personal or financial information.

Credit card information is purchased

Another increasingly common form of credit and debit card fraud comes from thieves turning to the dark web to buy account information. This part of the internet is only accessible with special software, but thieves obtain credit card information through breaches at retailers and foreign commerce sites in exchange for cash.

How to avoid credit card fraud

While it’s tough to completely prevent credit card fraud, there are many security measures and legal protections available to keep your information safe. Here are some fraud control basics to get you started.

Review monthly statements

Make it standard practice to review your card statements and bank statements every month. This will help you identify fraudulent purchases or credit card transactions more quickly.

Check your credit report

Checking your credit report regularly is just as important as checking your monthly statements. If a newly issued card is stolen or your personal information is used by a thief to set up a new account, the only way you may be able to find out is when that account shows up on your credit report because you are listed as the credit card holder.

Keep control of cards when you are out

It’s best to know where your cards are at all times. If you have some in your wallet, be especially mindful each time you use them. Get into a regular practice of checking that they’re where they are supposed to be. For digital cards, using card security settings like two-factor authentication could help keep that information safe. If you use those cards on electronic devices that are accessed by other people, do not store your personal identifiable information on the devices. Being lax with your financial information could expose you to some of the biggest card frauds.

Don’t carry cards you don’t intend to use

If you have cards that you do not always carry with you, keep them in a safe place that only you have access to. If strangers, or even people you know, come across physical cards that are not stored safely, they could steal the cards or copy the information for use online.

Shop online using only secure sites

When you are making purchases online, check that the site is secure by locating an icon that looks like a lock at the beginning of the website’s URL in the address bar. If the lock is not present, the site is not secure, and you should steer clear.

Don’t give card number over phone unless you initiated the call

Scam calls happen regularly these days. You might receive a call that seems related to issues through credit card use on an account you have, but do not give your information to the caller. Instead, hang up and call the card issuer directly. Give out your information only if you initiated the call.

What to do if it happens

If you are a victim of credit card fraud and find an unauthorized charge on your monthly statement or credit reports, there are a few things you should do immediately.

Notify card holders

The Federal Bureau of Investigation asks that you contact credit bureaus and your credit card provider so you could prove violation of clause or violation of subdivision regarding identity theft laws to avoid any liability.

Dispute the charges

Next, dispute the charges or accounts with the major credit bureaus and consumer credit reporting companies to begin the process of removing them from your credit file.

Change or update your security information

Immediately change all PINs, passwords, and account numbers for the compromised accounts. Ensure that your contact information is correct.

Continue to monitor statements

After you report the fraud, keep an eye on your statements to make sure there isn’t any additional unauthorized activity.

This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.


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