Credit cards are the perfect purchasing tools if you ask us. They’re there when we’re short on cash and reward us with loyalty points from simply purchasing. Because they’re valuable, it’s no surprise that scammers target credit card users daily.
You may have had a near encounter with credit card scammers, which begs the question—how do you avoid scams and protect your credit cards?
Having your credit card stolen can cost you big time, particularly in terms of the hassle and dollars lost.
Hackers can steal your credit card details in many ways. Not knowing what you’re up against makes you vulnerable to scams, but you shouldn’t let fear prevent you from enjoying the perks of being a credit card user.
As credit card users ourselves, we understand how you feel. So, we looked into authoritative credit card resources online and studied how common credit card scams work. We also read reputable sources and credit card expert insights on how to protect against credit card scams.
We’ve also unearthed the top tip for keeping your credit card details safe from scammers. Don’t stay vulnerable—read on.
What are credit card scams, and how can you avoid them?
Credit card scams are a form of identity theft, especially as they involve unauthorized access and harvesting of another person’s credit card information. They also intend to charge purchases onto the stolen credit card or withdraw amounts from it.
According to the Federal Trade Commission, in 2020, citizens filed more than 2.2 million identity theft and fraud cases. This is a sharp 26% increase from 2015 and a whopping 138% from 2010.
Many of these cases include credit card-related frauds, taking up more than 40% of identity theft cases.
Unfortunately, this data only constitutes cases reported to and filed by law enforcement and agencies—numerous credit card fraud incidents remain largely unreported.
How to avoid credit card fraud
Credit card scammers are becoming craftier and more sophisticated by the day. Think of them as just being around the corner, biding their time, and finding a way to strike.
From old to new scams, there’s nothing they wouldn’t do. Thankfully, there are ways you can protect your credit card and your identity safe:
1. Keep your physical credit card safe
Although criminals typically steal credit cards online these days, physical credit card theft remains a problem.
Simply losing your wallet or dropping your credit card empowers thieves to use your information for various scams and frauds.
That said, it’s important to keep your credit card safe at all times. Here are some of our recommendations:
- Don’t dictate your credit card numbers out loud in public. If you’re on the phone with your credit card company, go somewhere private before reading it out. Anyone who can hear you can simply write them down for malicious use.
- Keep your wallet or purse safe at all times. Never leave it unattended, and pay attention when returning your credit card after use.
2. Keep on the lookout for phishing emails, texts, and calls
Criminals use phishing scams to steal your identity through emails, texts, and even calls.
The phishing emails contain content to trick you into clicking on malicious links, filling out information on seemingly authentic websites, or sharing sensitive information over calls after pretending to be company representatives.
3. Use your credit cards on secure websites and stores only
Many of us use credit cards and mobile wallets to pay online—credit card payments make up 27% of many Americans’ payment transactions.
To us, this means convenience and connectivity. For scammers, this means a huge target area for identity theft.
For this reason, it’s important to use your credit cards in secure stores only. This means trusting in websites that use encryption and additional security layers.
Make sure you use a secure payment channel with the lock icon on the address bar and OTP (one-time PIN) options.
4. Protect your physical mail
This is our top and most important tip, often overlooked by many.
Your data is always at risk online, but don’t forget about the real world. Credit card criminals can also steal your trash through the mail, especially since they know that documents can include financial information.
For this reason, make sure to keep your mailbox protected. If you can, have it replaced into something you can lock—don’t take any chances!
If you wish to get rid of your mail, don’t simply throw it away. Shred or rip it before chucking it in the bin. Again, you never know who gets access to your documents.
Some common credit card scam methods you must know about
To understand how to avoid credit card fraud, it pays to know the common methods criminals use. They may use various online and offline tactics, so it pays to be vigilant.
How do hackers get your credit card number, anyway? Here are some examples of common credit card fraud methods:
1. Phishing scams
Phishing happens when a fraudster illegally obtains your credit card information (or any personal information) by pretending to be a legitimate email or website.
Unfortunately, many people fall for this trick because it can be difficult to tell whether links or websites are indeed authentic. Thankfully, there are warning signs to look for before clicking or sharing information:
- Phishing emails typically ask for sensitive information, a telltale sign you’re dealing with a criminal. Banks and other financial institutions will never ask you to provide your passwords, credit card CVV, and other confidential data over email.
- Criminals can fake links and redirect them to credit card scammer websites. So, if you wish to visit a website from an email, manually type the URL instead of simply clicking on it.
- Secure websites always begin with https:// and NOT http://.
2. Credit card skimming
Skimming is a recent credit card scam method wherein a thief uses an electronic device called a “skimmer” to steal credit card information. The device will then transfer the information onto another card to pose as a similar credit card.
Unfortunately, skimmers are notoriously challenging to spot. They look like regular card readers used in cashier stations and ATMs.
The best thing you can do is to check before using your credit card. Examine the card reader carefully for signs of tampering and anything out of the ordinary. More importantly, trust your gut.
3. Internet hotspot scams
We all need WiFi connections to survive, especially when we work on the go. Unfortunately, not all public networks are trustworthy.
Some of the latest credit card frauds involve the use of unsecured networks. Criminals can easily monitor these networks, and given lax security measures, you’ll easily lose your credit card information.
In most cases, they can also pretend to be a network you can connect to. Once your laptop or mobile device finds public WiFi, you’ll be prompted to input your information to “pay” for access. Other scammers, however, offer “free” internet access.
The catch is that they’ll be watching your every move, recording passwords you use, checking your bank accounts, and so on.
If you need to access public WiFi, it’s best to stick to store or restaurant WiFi. Ask for the Network name and password to ensure you don’t end up connecting to a scam hotspot. It’s also best to avoid logging into your bank and other financial accounts.
4. Arrest phone call scams
This type of credit card scam relies on fear. Scammers usually call victims to force them to pay for debts, taxes, or fines they allegedly owe, claiming to be representatives of agencies like the IRS, FBI, and SSA to command fear and authority.
These criminals coerce victims with threats of arrests, warrants, and other legal action if they fail to pay.
Remember that real agencies will never force, threaten, or coerce you into anything—especially on unexpected and completely random phone calls.
What to do about CC scams
Credit card scams run rampant, and they seem difficult to avoid. However, you can take steps to control the situation, especially after falling into a scam or losing your credit card.
Contact your credit card company immediately
Call your credit card company as soon as possible if you lose your credit card or suspect that someone has stolen the details.
You want to take action before the criminals begin using your credit card for purchases or loans.
If criminals have hacked your credit card with a balance, you may ask, “Will my bank refund me if I get scammed?” Fortunately, they can.
Major credit card networks like Visa and Mastercard suffer from countless scams, so they’ve developed a “zero liability” policy for customers victims of credit or debit card fraud. They will typically waive unauthorized charges or put the money back.
Can the bank find out who used your credit card?
While it can investigate the transaction and determine when and where it happened, it usually won’t have information about who used it.
Monitor your credit card bills
Seeing the first signs of credit card fraud is only the tip of the iceberg.
You’ll want to monitor your credit card bills carefully for the next few months, as fraudulent charges may continue to appear—even months after thieves have stolen your credit card information. You need to dispute these charges as soon as possible to avoid liability.
Practice vigilance when online shopping
eCommerce platforms usually ask you to save your credit card information for future purchases, and while this seems convenient, it’s best not to do so.
Hackers can easily enter your accounts when they’ve stolen your personal information, so never store any of your credit cards. Just go the extra mile of typing everything in the next time you checkout!
Credit card fraud and identity theft
Credit card fraud is closely linked to identity theft, mainly because it’s a consequence of stolen personal information. Criminals make use of your credit card information to make authorized purchases.
Unfortunately, identity theft can go beyond just these fraudulent purchase schemes. Identity thieves can also steal the rest of your information to make new IDs, open new credit cards, or even apply for loans. There’s no limit to what they can do with your information.
Credit cards are undeniably useful to us, especially given the promise of perks and rewards with every use. However, they can be easy to steal online and offline, which keeps you at risk for identity theft.
The best step toward credit card scam prevention is awareness and education. From understanding the warning signs of credit card scams and learning the best ways to avoid them, this guide has it all!
At the end of the day, though, don’t let fear stop you from enjoying the joys of owning a credit card.