How to Stay Safe from Debit and Credit Card Fraud
Tips to protect yourself from credit and debit card thieves and what to do if you become a victim.
Laura Adams, MBA
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How to Stay Safe from Debit and Credit Card Fraud
So you’re in a store, you see that thing that you’ve been eyeing for a while, and today it’s finally on sale! You reach for your credit card to make the purchase … but it isn’t in the usual spot. As your heart starts to race, you frantically check a few different places, and that’s when you realize: your credit card is gone. If you’re lucky, you might remember where you left the card and get it back without a problem.
But if your credit or debit card was stolen—or if you have the card but someone used your number to go on a spending spree—I’ll tell you exactly how to protect yourself and your credit.
6 Ways Thieves Steal Your Card Information
First, let’s cover how thieves typically get your confidential information in the first place. Here are 6 ways crooks can lift your debit or credit card:
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Stealing: A thief can take your wallet, purse, credit card, or personal documents the old-fashioned way, by snatching them when you’re not looking.
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Dumpster Diving: This dirty pastime involves rummaging through trash bins looking for bills, statements, or other documents with confidential information that you neglected to turn into confetti.
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Skimming: A skimmer is an electronic storage device that steals your card number. It can be installed over the swipe slot on a self-service machine, like a gas pump or an ATM. Dishonest clerks can also use a skimmer while they process your card in a store or restaurant.
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Database Access: Corrupt employees can steal credit card numbers from their company database, or sell them to other thieves.
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Phishing: This is an email scam where a crook pretends to be a financial institution, government agency, or a well-known company and tries to dupe you into giving up your personal information.
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Changing your address: A thief can divert your mail so it goes to another location where they take your account numbers and other confidential information. Once a thief has your credit card information, they can change the billing address on the account, hoping it’ll take you a while to catch on to their shenanigans.
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How to Stay Safe from Debit and Credit Card Fraud
It’s not always possible to prevent debit and credit card fraud; however, your goal should be to become a difficult target so a thief will just move on. Here are tips to minimize the possibility of becoming a victim:
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Never carry cards with you that you don’t need and if possible, carry them separately from your wallet.
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Don’t keep your debit card PIN with the card or anywhere in your wallet.
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Never loan your debit or credit card to anyone.
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Never email your card number to someone or give it in response to an email solicitation.
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Keep an eye on your card during purchase transactions and get it back as quickly as possible.
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Never sign a blank credit or debit charge slip.
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Monitor your credit card and bank accounts online at least once a week to watch for unauthorized charges.
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Save your receipts in a safe place and then match them to your credit card and bank statements on a regular basis.
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Shred all financial statements and receipts before throwing them away, even if they only contain the last few digits of your account number.
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Opt for electronic bills and statements so you reduce the amount of paper mail you receive that contains confidential information.
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When you’re shopping online, make sure the web page URL where you enter your card number begins with “https” instead of “http,” which indicates that it’s secure. Also, never enter any confidential information while you’re using an open, unsecured wi-fi connection.
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When making a large purchase, or buying over the phone or online, always use a credit card instead of a debit card to limit your liability. I’ll tell you more about this in a moment.
What To Do If You’re the Victim of Credit Card Fraud
If you lose a debit or credit card or discover unauthorized charges on your account, immediately call the card issuer and report it. Your potential liability for fraudulent charges is different for debit and credit cards.
For a credit card, once you report the loss, you can’t be held responsible for charges you didn’t make. Here’s the great thing about credit cards: If you report a card theft before any fraud occurs, your liability is zero. And if you report it after a thief made charges, your maximum liability is only $50 per card.
For a debit card, your liability can be much higher and it depends on when you report the loss. If you catch it early and report a stolen debit card before any fraud occurs, you have zero liability. However, if you don’t catch debit card fraud early, here’s how much you could have to pay:
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If you notify your bank within 2 business days, your maximum liability is $50.
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If you notify your bank within 60 days after your account statement was sent to you, your maximum liability is $500.
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If you notify your bank more than 60 days after your statement was sent to you, your liability is unlimited.
In other words, if it takes you more than 2 months to view your account statement and notice unauthorized charges, you could lose every penny in the account linked to the debit card, plus be responsible for overdraft fees and penalties. So never forget that using a debit card can be much riskier than a credit card when it comes to your financial responsibility for fraud.
The best way to catch a thief quickly and limit the damage caused by fraud is to understand how thieves get hold of your personal information and to monitor the transactions in your financial accounts on a regular basis.
How to Prevent Identity Theft
To prevent identity theft—which is when a thief opens a new credit card or loan in your name—you must monitor your credit report on a regular basis. I created a step-by-step video tutorial that shows you how in my free Credit Score Survival Kit. You’ll also get 3 top strategies to build excellent credit and find out where to get your free credit score with no strings attached.
Click here to download your free Credit Score Survival Kit!
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Check Out These Related Posts and Resources:
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About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.