How to Prevent Credit Card Fraud - NerdWallet (2024)

A stolen credit card number is unlikely to cost you money, but it can be a major hassle, which is why it’s worth taking steps to prevent fraud in the first place.

Most credit cards offer zero-liability policies, and federal law limits your liability to $50 at most for fraud reported within 60 days. So the bank is more of a monetary victim than you are.

For consumers, the headache lies in discovering and reporting a stolen credit card number, waiting for a new card to be delivered and revising autopay accounts linked to the stolen card number. And for some, there’s an emotional component, a feeling that one's privacy has been breached.

While you won’t be able to avoid all credit card fraud, you can limit your vulnerability and avoid hassles.

» MORE: Pros and cons of shopping with a credit card

Beware of 'phishing'

What it is: Phishing is a scam to trick consumers into revealing personal information, including credit card numbers. It can occur via email, phone, text or snail mail. Phishers sometimes try to gain trust by using familiar logos and company names in misrepresenting themselves.

Fraud prevention: Be generally wary of requests for personal information, regardless of the source. Independently verify the legitimacy of those requesting your credit card number.

Stop fraud in its tracks

With a NerdWallet account, you can see all of your credit card activity in one place and easily access your credit report to spot any red flags quickly.

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How to Prevent Credit Card Fraud - NerdWallet (1)

Identify 'skimming'

What it is: Skimming is when a thief steals a card number during a normal transaction and uses it to make a counterfeit card or conduct transactions that don’t require a physical card, such as online purchases.

Skimming could happen when you give your credit card to a restaurant waiter or a call center operator. It can also happen via a skimming device secretly attached to a payment terminal, often at unattended ones such as those at gas station pumps or ATMs.

Fraud prevention: EMV chip cards are helping to alleviate fraud from device skimmers. But it’s worth paying special attention to unattended payment terminals. If you see something unusual in the card slot, don’t use it and alert an employee.

🤓Nerdy Tip

Even though EMV significantly bolsters security for in-person transactions at payment terminals, be aware that the technology delivers no benefits for transactions online or by phone, known as card-not-present transactions.

Use different cards for autopay vs. everyday spending

Consider designating one of your credit cards to be used only for autopay accounts, such as wireless phone bills and website subscriptions. Then don’t use that card for anything else. That way, this just-for-bills credit card is not in the wild being processed by retail clerks and restaurant servers, or being swiped through gas station pump readers. Use other payment cards for everyday spending.

This technique won’t prevent fraud on your everyday spending card, but if one of the cards is breached, at least you won’t have the hassle of changing your autopay accounts and potentially incurring a late-payment fee.

Generally, it’s a good idea to keep a record of where your credit card number is stored.

Pay with your phone

Smartphone-based payment services such as Apple Pay and Android Pay make paying at stores safer because they use tokenization technology to change payment information with every transaction. The merchant never collects actual credit card numbers.

Additionally, the device’s lock screen is often password-protected, making the phone unusable without unlocking, usually by personal identification number or biometric identification, such as a fingerprint.

» MORE: Credit card tools you can use to help prevent fraud

Think twice about paying for anti-fraud services

Credit monitoring services seem to claim to protect you from identity theft, but they don’t. They alert you after it happens. Overall, they don’t do much more than you could do yourself. Besides, as a practical matter, you’re not liable for fraudulent credit card purchases, which reduces the incentive to pay extra for insurance or a service.

Do the little things right

  • Never provide credit card information over social media.

  • Follow best practices for security when making card purchases by phone.

  • Don’t let other people use your card.

  • Don’t conduct credit card transactions in public places, such as libraries and airports, and on public Wi-Fi.

  • Strengthen online passwords to include random combinations of letters, numbers and special characters — different for each account, ideally.

  • Shred unwanted documents that show your credit card number.

  • Keep apps and anti-virus software up to date.

  • Trust your instinct. If a website seems shady, don’t use it.

Limit the damage, if it comes to that

Much of preventing fraud is limiting the damage after a credit card number is compromised.

  • Act fast when your wallet is stolen. Your first task is to cancel those credit cards.

  • Monitor your financial statements. Review credit card and bank statements to make sure you recognize transactions. Using a card issuer’s smartphone app and setting up text notifications are ways to stay updated.

  • Check credit reports regularly. You’re entitled to one free credit report every year from each of the three major credit reporting bureaus. Consider requesting one report every four months to check for suspicious information, especially new credit card accounts you don’t recognize.

Were you a victim of credit card fraud? Here are resources:

NerdWallet’s cybersecurity and identity theft guide

What to do if you lose your credit card

How to prevent credit card fraud

Is identity theft protection worth it?

Rattled by card fraud? Use a simple ‘autopay and everyday’ tactic

Card lock: What it does, who offers it, how to use it

How to Prevent Credit Card Fraud - NerdWallet (2024)

FAQs

How to Prevent Credit Card Fraud - NerdWallet? ›

Check credit reports regularly. You're entitled to one free credit report every year from each of the three major credit reporting bureaus. Consider requesting one report every four months to check for suspicious information, especially new credit card accounts you don't recognize.

How do you defend against credit card fraud? ›

The following are good steps to take to protect your credit accounts.
  1. Keep Your Credit Card Information Secure. ...
  2. Monitor Your Credit Regularly. ...
  3. Use Secure Websites for Online Purchases. ...
  4. Be Aware of Phishing and Skimming Scams. ...
  5. Use Additional Security Measures.
Aug 30, 2023

What should be protected on credit card to prevent fraud? ›

Card details – card number, card holder name, date of birth and address –- are stolen, often from online databases or through email scams, then sold and used on the internet, or over the phone. This is often called 'card-not-present' fraud.

How can credit card fraud be solved? ›

5 steps to take if you're a victim of credit card fraud
  1. Call your credit card company immediately.
  2. Check your credit card accounts and change your passwords.
  3. Notify the credit bureaus and call the police if necessary.
  4. Monitor your statements and credit reports.
  5. Check your online shopping accounts.
Oct 15, 2023

How can card present fraud be prevented? ›

Physically secure the card reader with a secure stand or a tether to prevent theft and replacement. Set up security cameras to capture activity near card readers, and keep an eye out for planted recording devices designed to record cardholder's numbers and PINs.

How can you protect yourself or a business against credit card fraud? ›

It's important to know that your credit card company or bank would never call to ask for personal information like your credit card number, expiry number, PIN, or the security number on the back of your card. Protect your credit card like you protect your cash. Never leave them unattended in your car or at work.

How do I challenge credit card fraud? ›

In general, most cardholder agreements and legal rules require that consumers first approach the merchant who charged the card to resolve the problem. If that doesn't work, consumers may request a refund or chargeback through their credit card issuer, which is often a bank.

How do I stop someone from using my credit card? ›

The Federal Trade Commission (FTC) online at IdentityTheft.gov or call 1-877-438-4338. The three major credit reporting agencies. Ask them to place fraud alerts and a credit freeze on your accounts. The fraud department at your credit card issuers, bank, and other places where you have accounts.

How are credit card frauds caught? ›

How Do Banks Investigate Fraud? Bank investigators will usually start with the transaction data and look for likely indicators of fraud. Time stamps, location data, IP addresses, and other elements can be used to prove whether or not the cardholder was involved in the transaction.

What is the most common method of credit fraud? ›

FAKE AND COUNTERFEIT CARDS

The creation of counterfeit cards, together with lost / stolen cards pose highest threat in credit card frauds. Fraudsters are constantly finding new and more innovative ways to create counterfeit cards.

How often is credit card fraud solved? ›

It really depends on the actions taken by a cardholder after they notice a possible attack and the prevention methods a bank or card issuer takes to detect fraud. Some estimates say less than 1% of credit card fraud is actually caught, while others say it could be higher but is impossible to know.

Can police do anything for credit card frauds? ›

Yes, the police handle credit card fraud, especially for cases in which the fraud is extensive, involves a larger criminal scheme or requires criminal investigation and potential prosecution. Their involvement typically follows reports from banks, victims, or credit card companies.

What is the precaution of credit card fraud? ›

Never Make Credit Card Information Public

Always be aware of scammers and potential threats of phishing. Credit card number and other sensitive information related to the credit card should never be provided over the phone or through text messages.

How do I stop my card from being scammed? ›

9 Ways to Protect Yourself
  1. Get Banking Alerts. ...
  2. Go Paperless. ...
  3. Don't Make Purchases With Your Debit Card. ...
  4. Stick to Bank ATMs. ...
  5. Destroy Old Debit Cards. ...
  6. Don't Keep All Your Money in One Place. ...
  7. Beware of Phishing Scams. ...
  8. Protect Your Computer and Mobile Devices.

How do you prove card fraud? ›

The Federal Trade Commission advises that you create an identity theft report with the agency and send it to the credit bureaus, along with proof of your identification and a letter providing input about the fraudulent charges.

How do you counter credit card fraud? ›

Five strategies to help prevent credit card fraud
  1. Monitor your accounts. What's the best way to help detect credit card fraud? ...
  2. Sign up for fraud alerts when possible. ...
  3. Watch out for phishing and smishing scams. ...
  4. Avoid using unsecured websites. ...
  5. Regularly check your credit reports.

How can you protect yourself against credit card fraud wise? ›

Here are a few credit card safety tips from the FTC and other federal government agencies you can use to help protect your financial information.
  • Secure your account information. ...
  • Stay safe online. ...
  • Be aware of scams. ...
  • Monitor your credit for fraud.

What recourse do you have for credit card fraud? ›

Immediately contact your credit card issuer of the fraudulent transaction. Some issuers allow for fraud reporting in their app or on their website, though you may need to call the number on the back of your card.

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