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5 simple steps to avoid credit card fraud

Oct. 13, 2020
5 min read
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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.

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Protect your mobile devices with passwords

(Photo by Billion Photos/Shutterstock)

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.

Related: How to secure your data when using public Wi-Fi

(Photo courtesy of Alexander Spatari/Getty Images)
Public, open networks can open the door for your information to get stolen. Avoid sending financial data while on a public network, and always use a VPN when possible. (Photo courtesy of Alexander Spatari/Getty Images)

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.

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Use a shredder

(Photo by phakji east/Shutterstock)

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

Bottom line

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.

Related: How (and when) to dispute a credit card charge

Additional reporting by David McMillan

Featured image by (Photo by Shutterstock)

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  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
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  • Choose the color that suits your style. Gold or Rose Gold.
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  • Terms Apply.
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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees