Keeping Your Credit Cards Safe

Most of us will experience credit card fraud at some point...

Most of us have or will suffer from credit card fraud at some point. Credit card fraud refers to charges for purchases not made by the owner and unauthorized cash withdrawals from accounts. It is one result of identity theft but it is narrower, more easily preventable and easier to correct. Consequently, it is a good place to start when you are trying to maintain excellent data hygiene.

Credit cards by law have a $50 maximum for unauthorized charges. One industry group estimates that US credit card issuers may lose as much as $10 billion from credit card fraud by 2020, so the issuers have good reason to help their customers keep their card data safe.

Before I list a set of basic protections, let me give two rules that should always be followed.

Rule #1. Never give any financial information to someone who calls on the phone, no matter who they say they are.

Never. Ever.

They are only trying to steal your personal information. No legitimate financial or governmental institution will ever call and request information.

Never. Ever.

The recent Homeland Security warning about the spoofing of their phone number is one example of why you never, ever give any information to this type of caller.

Rule #2. Immediately report any suspicious activity to the credit card issuer. The issuer will often wipe out even the basic $50 liability and will immediately open a new account for you. You can also report the fraud to the Federal Trade Commission but they will not help you fix it. That is the responsibility of the credit card issuer.

With those two key rules in mind, here are ways to keep your card data safe:

  • Sign new credit cards immediately.
  • Carry cards and cash separately to minimize the risk of theft. My own experience says that’s especially important when traveling.
  • Carry only one card at any one time. That could lead to a 2-card rule: one card to carry with you and one to keep at home for online purchases. You could keep a third card safely stored away for major purchases. The other advantage of using different cards for different purchases is that it’s much easier to review the card activity.
  • Keep your credit card in view when using it whenever you can.
  • Don’t sign blank receipts or leave any lines blank on a receipt.
  • If you keep physical receipts, store them carefully, shredding, or at least tearing into small pieces, both receipts and paper statements when they are no longer useful.
  • Even better, regularly check your transaction records online. Waiting for a paper statement wastes valuable time.
  • Examine the issuer’s website for security settings like notification of suspicious activity. That’s a valuable early warning.
  • Try to shop with merchants whose systems include chip readers. The chip on the credit card offers an additional layer of protection.

Is it worthwhile to subscribe to any of the paid credit card protection systems? In a word, No. Read their advertising and websites carefully. They only monitor and report suspicious activity after it has happened. You can do just as good a job yourself—free and perhaps more quickly.

That’s the best way to prevent a personal loss from credit card fraud.


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