5 simple steps to avoid credit card fraud
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Your credit card may offer a wide range of perks — cash-back opportunities, travel rewards points, car rental insurance coverage and more. However, paying with plastic (or metal) also comes with the potential for fraud.
According to research from the Federal Reserve, credit card fraud has gone up over the past decade (rising from 14 million in 2012 to 30.4 million in 2015 alone). While credit card issuers have introduced new protections to help prevent fraud (such as EMV chip technology now standard across almost all credit cards), but these countermeasures aren’t a magical solution to the problem. As hackers develop more sophisticated ways to steal valuable data, safeguarding your confidential financial information should be a top priority. Consider these tips to help keep your card earning rewards points while keeping the risks of being compromised low.
Want more credit card news and advice from TPG? Sign up for our daily newsletter.
Protect your mobile devices with passwords
Entering in a four- or six-digit code may seem like a hassle each time you need to respond to a message or scroll through your Instagram feed, but this basic safeguard will be your best friend in the worst-case scenario if you misplace your phone. Without a password, anyone who finds it is just a few clicks away from your banking app and the credit card statements sitting in your inbox.
Of course, you can now use face recognition technology and fingerprint technology to protect your phones and just have a numerical password as a backup. But the point is to just ensure that your phone locks so that not anyone can pick it up and go through it.
Avoid open Wi-Fi networks
From hotel lobbies to coffee shops to airports, many places offer free Wi-Fi to help customers stay connected. While complimentary Wi-Fi is convenient for your own routine (and amazing when you’re traveling — very little beats realizing the coffee shop you’ve decided to spend your afternoon at comes with free Wi-Fi), it’s also equally convenient for tech-savvy hackers who may be sitting at the next table. They can easily connect to the network and uncover a treasure trove of information — your credit card number, your usernames and passwords and other valuable data.
Simple rule: If you’re transmitting any financial information, never use an open, easily hackable network. And even when you’re just using your mobile device to scroll through Instagram, it’s best to use a VPN whenever possible.
Set up account alerts
Your bank understands your purchasing patterns — where you live, where you shop, how much you typically spend per transaction and plenty of other lessons about your personal finance behavior. This knowledge can be a powerful force in fighting credit card fraud, and you can help your bank beat hackers by programming customized alerts for any suspicious activity. For example, you can ask your bank to flag any purchase that crosses a certain threshold.
Use a shredder
You may be accustomed to doing almost all your money management via apps, email and other paperless platforms, but you still have the burden of physical receipts and monthly account statements sitting in a pile in your office. While online hacking may be more commonly seen on television and movies, old-fashioned dumpster divers can and do still steal personal information found in the trash. To avoid letting your trash be recycled into a fraud attack, buy a shredder and use it when trashing any financial documents or personal information.
Monitor your accounts
Don’t just count on your bank’s technology to recognize signs of trouble. You’re the real expert when it comes to your transaction history, and you can proactively review your account activity for any purchases you don’t recognize. There’s no need to wait for the monthly statement to arrive, either. Mobile banking has made it easier than ever to stay on top of your spending, credit score and overall finances. The more familiar you are with your own bank statements, the easier it will be for you to catch fraudulent behavior that your credit card issuer’s tools may have missed.
Related: How to prevent credit card fraud
Fraud is an unfortunate risk that accompanies using plastic — whether credit cards or your debit card. The good news is that credit card issuers offer fraud protection to help give you some peace of mind when swiping. But the best-case scenario is to prevent credit card fraud from ever happening. Use these tips to protect yourself from falling victim.
Additional reporting by David McMillan
Featured image by Shutterstock
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.