Top 10 Ways to Prevent Credit Card Fraud

As we are becoming increasingly dependent on plastic money, credit card fraud is proving to be extremely harmful. Credit card frauds happen as fraudsters copy your card details through a skimmer or through counterfeiting. However, banks have taken multiple steps to prevent credit card fraud. Yet, we tend to neglect the basic steps to prevent these frauds in future.

Consumer education is a great strategy where people can self-educate and help avoid these fraudulent activities. This piece provides you with some simple steps you can follow to prevent credit card fraud.

What Is Credit Card Fraud?

When a scammer uses your credit card details and PIN to conduct financial transactions in your bank account illegally, without your knowledge, it is credit card fraud. These frauds are segmented as identity thefts and are a common issue these days.

Such events, therefore, require credit card security. However, if you opt for credit card security, it ensures your credit card safety and saves you from unwanted transactions.

What Are the Best Ways to Prevent Credit Card Fraud?

how to make payment — (source: bankrate)

Here are the 10 best ways to prevent credit card theft:

1. Keep Your Credit Card Safe

The primary way to save your credit card from fraudsters is to keep your card in a safe place that is not easily accessible.
You must ensure that the envelope or credit card kit you receive through the post has not been tampered with.
Sign immediately at the back of your card as soon as you receive it.
Please keep your card in a secured place, in a small pocket or wallet, so it is not easy for pickpockets to snatch it away.
Try to confirm the possession of your credit card even if you have not used it for some time.

Moreover, whenever you travel to international countries, try not to carry all your cards while venturing out. Lock the unnecessary ones in your suitcase or inside your bag properly. If your credit card is stolen there, report it immediately to your issuer. This is an effective way to prevent credit card fraud as it will reduce any pre-empt fraudulent charges you might face.

2. Provide Unique PIN Details

Turn on the suspicious activity alerts. This will help you to monitor credit card transactions online. Most banks offer real-time alerts allowing you to keep track of your credit card spending and uses.
Provide a unique PIN that one cannot identify easily. Do not use a birthday or anniversary dates.
Do not use similar passwords for retail sites and bank accounts. Take a multifactor authentication process since this reduces your data from getting stolen.

3. Keep Your Account Details Private

Do not allow anyone to use your card until you trust that person or that person knows how to use a credit card.
Avoid presenting your card in public places where it is not required.
Be very secure and selective when providing account details over the phone to someone. Initiate only if it is a person from your bank.
Avoid clicking on suspicious links that you receive over emails, texts and social media. They ask you to provide personal details such as PIN and bank account details, which are unsafe.
Expel all your expired, cancelled and invalid credit cards. We tend to go careless with the expired ones, which are a gateway for hackers to collect your data.

4. Always Keep Your Information Current

If you move to a new destination, notify your bank about it. This will help your bank to send all documents and other details to your new address preventing anyone else from accessing it.
For all financial alerts, provide the correct and present phone number so that they reach you. If there is any phone number that you do not use anymore, do not annex it with your bank.
Similarly, you can accept emails only in the one mailbox you handle. Do not provide multiple email ids to banks.

5. Carefully Handle Your Receipts

Consider paperless statements, and do not throw your bank receipts anywhere. Shred the ones you don’t need or dump them safely.
For statements with paper, file them safely and keep them in a safe space.
Avoid credit card trails with full credit card numbers printed on them.
If you find extra space on your receipt, do not forget to draw a line through the same. This ensures no one can scribble anything on these empty spaces.
Try to track your receipts against your account details. This will help you to notice any fraudulent activities in your account.
Before signing any bill, carefully verify the credit card receipt.

6. Secure Your Networks and Devices

It is vulnerable to allow your browser to store your credit card details. Turn off the Autofill function in each of the browsers you use to ensure safety.
Consider using a digital wallet installed on your smartphone to conduct transactions using your credit card. Digital wallets use tokenisation, encryption and authentication, which are potentially safer.
Keep your smartphone or laptop password protected through a fingerprint lock or unique passcode.
Download and install apps that help you to find your phone in case it is lost.
Memorise your PIN numbers and change them frequently.

7. Take Specific Measures

By now, you already know most of the ways to prevent credit card fraud. Yet there are certain measures you need to take to ensure online and mobile safety.

Know your merchant site properly. When shopping online, try to look for sites with 'https'. Here, 's' means secure. Also, ensure that the URL has the correct company name.
Do not allow any online or offline store to store your credit card details.
To prevent skimming, do not allow any seller to take your card away from your sight.
Always consider using safe online payment systems such as PayPal, Android Pay, etc. This doesn't allow the credit card details to be in the hands of the merchant. So, if the merchant site is hacked, your credit card details are safe.

8. Always Check Your Account

It is essential to always keep track of your account so that if there is any suspicious handling, you can notice it.
Track your recent account activity via banking apps that you can install on your smartphone.
If you have been a victim of credit card fraud in the past, always consider signing up for a credit-monitoring system. This way, you will be able to know how to prevent credit card theft online.

9. Report Lost Cards

If you lose your credit card, you must immediately report it to your bank or service provider.
Try to memorise your CVV number and scratch it off or remove it from the card to avoid misuse of the same in case it gets stolen.
Always keep their number handy to avoid delays in informing your service provider.
Do not give your card to any family or friend if you do not trust that person. In case it is lost, the situation becomes sensitive.
Ask your bank to block your card and account number when your card gets stolen. Your bank will eventually provide you with a new card and account number.
Also, do not forget to remove your card details from all the online shopping sites where they might be saved.

10. Use RFID Blocking Cards

Most modern contactless credit cards come with RFID chips, where you do not require swiping them while using them. This means credit card hackers can easily hack your credit card data through the RFID system just by standing beside you. In that case, investing in an RFID-blocking wallet can be beneficial.
In addition, do not use public Wi-Fi frequently to make payments via credit cards.

So, these are some of the online credit card fraud prevention techniques you can keep in mind. Now, let’s learn how credit card fraud can occur.

How Does a Credit Card Fraud Happen?

There are several ways through which skimmers conduct credit card fraud. Although the internet and application-based banking help people enjoy banking facilities at home, they are risky and initiate fraud. Here are the ways how credit card fraud might happen -

1. Physical Theft or Pickpocketing

One of the easiest ways your credit card details get transferred to an unwanted individual is through theft. To ensure the security of your card, you must keep your card safely in your wallet. Do not initiate a credit card purchase unless necessary.

Your credit card can accidentally fall among the many cards you keep in your wallet. This can cause someone else to pick it up and never return it.

2. PoS Fraud or Skimming

Skimming is a dangerous way of stealing your credit card details these days. Expert skimmers use a card skimmer device on the credit card swiping machine on PoS or Point of Sale counters. These devices scan and store your credit card information as you complete your transaction through a credit card swipe.

This way, all the details get automatically read by these people when you are swiping your credit card for the original purchase. This is a way where the skimmer does not require your card and yet steals all information. When your fraudsters skim your credit card information, you will not know about it unless banks accuse you of charges that you never made.

Skimmers keep these devices on ATM card slots to clone data. They keep a hidden camera on the keypad to capture your PIN.

3. Dumpster Diving

Dumpster diving involves credit card fraudsters rooting through your trash that might include access codes or passwords noted down. They gain information from your cell phone lists or calendar notes to access all your data. Also, they gather information when you discard documents, bank receipts, and bills with full credit card details written on them.

4. Hacking

There are many websites and stores that you regularly shop that offer to save your card for their convenience. While this can help you in further transactions, it also threatens your safety since hackers who access company databases can steal the saved information from your credit card.

5. Phishing

Phishing involves personally soliciting card details from you by impersonating official communication from banks. This acts as a trick or bait for you and tempts you to click on false links. This takes you to so-called secure websites.

As you enter your card details, credit card fraudsters can access data. They ask you to share an OTP to verify your card, avail bonus points, etc.

6. Keystroke Logging

Since most transactions happen online, hackers use keystroke logging systems via malicious software to steal credit card data. This happens when you have accidentally clicked on a suspicious link and unknowingly installed the malicious software in your system.

This dangerous software captures all PINs and personal data that you enter via a keyboard on your system. So, stealing PIN and card details become easy while you are unable to know anything.

7. Stealing via Public Wi-Fi

Public places such as airports and coffee shops use public Wi-Fi, which is not safe. Hackers use MITM or 'man-in-the-middle' attacks to interfere with your connection and steal data that you enter. This includes all PIN numbers and credit card details.

8. Data Breaching

As per recent studies, data breaching has increased to almost 68% from 2020 to 2021. There are reports that say that fraudsters have hacked numerous accounts through social media since people are most active there. Hackers can access numerous credit card data through a single data breach on Dark Web.

9. Carding

A recent type of credit card hack, carding is a process where a fraudster steals your credit card first. Then they use this credit card to purchase gift cards or recharge prepaid cards. Carding involves the fraudster purchasing gift cards. Then, they sell these products for cash to other people. Credit card hackers who use carding systems to steal data are known as 'carders'.

Now, you have a clear idea about how to prevent credit card fraud. A careful attitude will prevent you from saving your details from such hackers.

In this regard, treating your credit card just like any other valuable asset is essential. Try to familiarise yourself with all the security features on your card. Use your card with utmost care and avoid carrying too many of them while travelling. The best way to prevent credit card fraud is to choose debit cards for a transaction or avail cash payments wherever necessary.

Frequently Asked Questions

✓ What is an unauthorised credit card charge?

When your credit card is used by an unknown person illegally or without your knowledge, it is known as an unauthorised credit card charge. This happens when your card is lost or stolen.

✓ What is a counterfeit credit card?

It is a fake card with the actual credit card data from the victim. This card has encoded magnetic strips and bears the logo of the original user.