Credit card fraud has always been an issue, but nowadays, it seems like there's a new hacking at a major retailer's website every few weeks. It's a bit unnerving, for sure. But fortunately, there are steps you can take to prevent credit card theft.
Here are eight easy ways you can stop credit card theft in its tracks.
1. Never give your account numbers over the phone or via email
This is called "phishing" and it's an old scam. It's still around because fraudsters find it effective. Here's an example of a phishing email: "There appears to be an unauthorized purchase on your credit card account. Please click the link below to allow us to confirm your identity."
If you got a message like that, your first reaction would be to click the link and make sure fraudulent activity doesn't go any further. But don't click the link or give them a call if they provide a number. Your bank won't ever ask you to reveal sensitive financial data over an email or a phone call. So unless you made the initial call to the bank using their customer service number, don't give out your account information to anyone. These types of scams are also attempted via text messages, so be on the alert for that, too.
2. Check your credit card accounts online
If you have reason to worry, check your online accounts every day. Otherwise, checking your accounts a few times a week should suffice. When you review your accounts, look at every purchase that has been made.
Sometimes, thieves will run a small dollar amount through your account to see if it's "live." The thief is checking to see if you've canceled the account. So don't skip over any line item. If you see something suspicious, contact your card issuer immediately.
Recently, you've probably received a replacement credit card that contains a chip. These are "smart cards" and they are much more secure than the current magnetic-stripe cards. But don't get lulled into a false sense of security.
Cloning a card is by far the most common way a thief commits credit card fraud. The thief gets his or her hands on the numbers and makes a physical copy of the card. It will be more difficult, if not impossible, to physically clone a smart card.
But due to this, it's predicted that fraudsters will shift their focus to easier ways to commit fraud. So the incidence of online theft (where the thief has the numbers, but not the physical card) could increase. Bottom line? Be diligent about checking your online accounts so you can catch unauthorized purchases as soon as possible.
3. Pay attention to the appearance of ATM machines
A thief will often attach a skimmer to an ATM machine (or to the card swiper that you use to pay for gas at the pump). This device skims, and basically copies, your credit card information from the magnetic stripe when your card is swiped. The intent is to make a duplicate card using your account numbers and it's called "cloning."
It's tricky to spot these devices, but there are a few things you can try. Try to wiggle the area where you insert your card to see if it's secure. And since there are often cameras installed in an attempt to watch you key in your PIN, put your hand over the numbers as you type them in. Notice the feel of the keys when you punch in your PIN. If anything feels off, notify the bank and use an ATM at a different location.
Using a credit card with a chip does help make the skimming scam more difficult to pull off, but it doesn't eliminate the risk. Smart cards will still have a magnetic stripe on the back that contains your valuable information.
4. Check your free reports
You get three free credit reports from the major credit bureaus once every 12 months at AnnualCreditReport.com. You need to check everything in your reports, including your personal information. A red flag for fraud? Spotting a new credit card account that you didn't open.
You can choose to get your reports all at one time or you can spread them out and get one every four months. For instance, you might get your Equifax report in January, your TransUnion report in May, and your Experian report in September. This isn't foolproof, of course, but spreading them out over a year might help you catch fraud or an error more quickly.
5. Get a replacement credit card if you suspect your account has been hacked
If a retailer where you frequently shop has been hacked and your bank has reached out to you, be proactive and ask for a new card. Sometimes, fraudsters will hang on to stolen account numbers and wait for the attention to shift somewhere else. So just because you haven't seen anything fishy in your accounts, that doesn't mean you couldn't be a victim six months from now.
This goes for debit cards, too. With debit cards, you could lose all of your cash to a hacker. You might get most or all of it back, but you'd be without the cash for a short time. For some, this is enough to create havoc with cash flow and pending bills.
6. Get a security freeze
If you've been a victim already or worry that your data has been hacked, you can ask for a credit freeze to prevent credit card theft. With a freeze, if someone applies for new credit, the potential lender can't see the credit report. This alone will cause the lender to be suspicious.
But don't worry, if you need to apply for credit, you can temporarily "unfreeze" the report. This isn't convenient, but it's not as inconvenient as recovering from credit card theft!
Note that freezes aren't usually free and the fee varies by state. However, if you have already been a victim, you might qualify for a free credit freeze. You will have to show the required paperwork, such as a police report, to be eligible. But again, the ability to get a free credit freeze varies by state.
7. Be careful using public WiFi
This is something that's easy to forget about. You're used to having the Internet at your fingertips and checking your accounts at will. But while you're sitting in a coffee shop checking your bank accounts, you run the risk of being hacked.
The Federal Trade Commission (FTC) warns that many public WiFi networks are not secure and to protect your information you should only use sites that are fully encrypted. Translation? Only use sites that show "https" at the start of the web address. The "s" stands for "secure." Don't just look for it on the home page. Look for it on every page within a website where you are entering sensitive data.
8. Use strong passwords and change them often
It's important to have tough passwords and to have a different password for each site that you use. Yes, this can be a pain. But if you include capital and lower case letters, numbers, and punctuation, your passwords will be stronger and offer more protection against hacking.
There are many password managers on the market to help you keep track of them. But choose the app you use carefully and make sure it uses encryption to keep your data safe.
Overall, remember this: There's no such thing as total security when you're dealing with the Internet. But if you practice all these tips, you increase the chances of keeping your data safe, or at the very least, minimizing the damage.