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Credit Card Protection Basics

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Point of Threat: Credit Cards

Identity theft and credit card fraud are not the same crime, though the two are often lumped together as one. Identity theft is much more far-reaching than credit card fraud. When a criminal steals you identity, they may have financial motivation, but you'll suffer more than fraudulent charges on your credit cards.

Identity thieves may change account information, create new accounts, use your identity to commit crimes, and even use your identity to establish a new life. Credit card fraud, on the other hand, is limited to charges on stolen credit card numbers. A criminal gains access to your account number and then uses it to purchase products online or in person and then resells those goods to get the cash.

So, if credit card fraud is not identity theft, why address it? The simple answer is because credit card fraud can be an element of identity theft. It can also lead to identity theft.

Preventing Credit Card Fraud

Credit card fraud is a crime that can often be prevented. For example, something as simple as a signature on the back of your card could prevent the card from being used if it’s been stolen. Even better, put the letters CID (which stands for See ID) on the back of the card. Then when a merchant attempts to verify the signature on the receipt with the card, they’ll request to see your identification.

Everyone is familiar with the basics of protecting your credit card. Don’t loan it out. Don’t leave it laying. And don’t give the number to someone you don’t know without first verifying they are legitimate.

But there are lesser known strategies for protecting your credit cards and card numbers, too. And these are the strategies that you should know well and use constantly.

  • Keep your card in sight. Whenever possible, keep your credit card where you can see it. Some places, like restaurants, take your card away and then bring it back after they’ve secured authorization for a transaction. It’s when the card is out of your sight that it’s often swiped through a card reader that stores the information from the magnetic strip for criminals to use to create a duplicate card later.
  • Ask about multiple swipes. It’s not uncommon when you hand a merchant your card for them to swipe it more than once. Usually, this happens because the card reader doesn’t read the magnetic stripe on the back of the card, but savvy criminals will also use a second swipe as a method to copy the information from the magnetic stripe to a storage device to later be transferred to a duplicate card. If your card is swiped more than one time, always ask why.
  • Never use your credit card on an unsecured Web site. A secured Web site will have a small lock in the lower right corner of the page, or the status bar for the page. If the lock doesn’t appear there, then the site is not secure. Don’t use your card on an unsecure site, because anyone with a little skill can capture the number and use it for their own purposes.
  • Never carry multiple cards. If you lose your wallet or purse, you lose everything that’s in it. Another danger here is that someone will go through your wallet or purse when it’s left unattended and steal just one card. Leave any card you won’t be using at home, and try to stick to putting all of your purchases on just one card.
  • Never give out your credit card number while you’re on your cell phone. Cell phones have become such a large part of our society that we often forget everyone around us can hear our conversations. If you need to provide your credit card number for a purchase while on the cell phone either request to call the company back from your own home, or find a place that’s private (like inside your car, alone) to provide the number.
  • Consider purchasing pre-paid credit cards for online shopping. Pre-paid credit cards are one of the best ways to protect yourself. You load the card with a set amount and then use it just as you would a regular credit card. The good news is, if the number is stolen or the card is lost, your liability and the amount of damage that’s done is limited by the money that’s available on the card. As an added bonus, there’s no interest on a pre-paid card since technically you’re spending your own money, anyway.

Credit card fraud may not be actual identity theft, but it’s often a step along the way. And even if the criminal that fraudulently charges your card isn’t interested in your identity, the expense and frustration of dealing with credit card fraud is reason enough to protect yourself.

Be smart. Use caution. And always be aware of how your credit card is being handled by someone else.

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