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How to Avoid Credit Card Fraud

Personal Finance

August 5, 2016

How to Avoid Credit Card Fraud

You may be more at risk than you think.

Most of us swipe our credit cards daily, often multiple times, without much thought about our personal information or how it is processed. It may not even cross your mind that personal information could be stolen and your identity could be at risk. But this is very much a reality, as everyday credit card numbers are stolen and even sold for big bucks. According to the Bureau of Justice Statistics, an estimated 17.6 million Americans – about 7% of U.S. residents age 16 or older – were victims of identity theft in 2014 (the most recent reported year).

‍What is credit card fraud?

‍Credit card fraud can happen online and offline. It is when a thief manages to obtain your credit card number. It can happen so quickly that they could max out your credit card before you even know it has been compromised. Or, thieves can utilize multiple pieces of information about you, including email accounts and online shopping log-ins from your online activity, to not only hack accounts and make charges, but ultimately steal your identity.

Credit card numbers stolen often end up going to card-buying websites such as Rescator, which sells card numbers for as low as $10 or $20 per card. Thieves can actually buy hundreds of cards at a time to go on shopping sprees with your info, and do quite a bit of damage before it is even noticed. They may even resell your information.

‍How does your number get stolen?

‍There are many ways your credit card number can be stolen. From online to a restaurant or store, it just takes a second for your number to land in the hands of a thief. Also, radio frequency scanners have become an increasingly popular method since all a thief needs to do is have a scanning device in close range of your card. All of the new technology makes it much easier. Payment processing technology such as Google Wallet could have a reader that’s easily compromised. Then, there’s the old way, which is simply copying your card number.

‍How can you avoid credit card fraud?

Be careful with the ATM:

There could be a scanning device attached to an ATM slot to read numbers and you may not even know it. If a credit card slot is not flush with the machine or if it feels strange when you swipe, this could indicate an implanted electronic device that captures your credit card information.

‍Watch your mail and go paperless:

If you like to receive your credit card statements in the mail, pay attention to your billing cycles and contact the company immediately if you don’t receive your bill on time. Your piece of mail could get into the wrong hands and a sneaky thief could even change your billing address to receive future statements. It’s always better to go paperless.

‍Keep an eye on your card:

‍If you dine out in restaurants or shop in boutiques where you lose sight of your card while the merchant is making the transaction, each time this happens your card number could be jeopardized. Although it’s not always likely, it just takes a second for someone dishonest to snap a picture of your card. While it may not be possible to avoid using your card in these scenarios, carrying cash may make purchases more comfortable.

‍Shred important documents:

Desperate thieves even resort to dumpster diving in search of pieces of personal information that may offer credit card numbers and other information of yours they can use to their benefit. Make sure to shred anything even moderately important before you place it in the trash.

‍Be aware of cybercrime:

While there are more federal and local resources responding to cybercrime, it still is a very real and concerning issue. Make sure to change your online passwords often and monitor your online accounts regularly. Don’t reply to spam or open questionable email attachments. For example, if you receive an email saying you won a million dollars for overseas and all you need to do is pay $50 and provide your personal info, clearly this isn’t a wise offer to consider.

If you do believe you have become a victim of credit card fraud or identity theft, you may file a 90-day fraud alert. This involves contacting the three main credit bureaus, Equifax, TransUnion and Experian, and they can place an alert on your account. Also, contact your credit card company immediately. While there are many ways that thieves can compromise your safety, following these guidelines can at least help to eliminate at least some of the risk and help you sleep better at night.

With further questions, schedule a 15-minute call with one of our financial advisors.

Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance on your individual situation.

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