Unless you avoid using credit cards altogether, no one can fully prevent credit card fraud. The Federal Trade Commission says in 2017, credit card fraud was the biggest type of identity theft in the United States with over 133,000 cases reported. The problem is only getting worse. People with existing credit card accounts filed 20% more fraud reports in 2017 compared to the year prior.
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“The amount of credit card transactions that occur every day, it creates a larger opportunity for the bad guys to get a hold of that information,” says Trevor Buxton, fraud communications manager at PNC Bank.
He says there are four ways consumers can protect themselves from credit card fraud:
Check often for suspicious activity
Do you check your Facebook and Twitter feeds every day? Buxton says you should be just as diligent with your credit card activity.
“Folks would be wise to check their card activity regularly or as often as they would their social media feeds,” he says. “Make it a habit to check your account activity at least once a day. That way you can stay on top of some of these fraudulent transactions that may be occurring.”
Use secure payment methods
For an added level of security when using your credit card, Buxton suggests using mobile pay with biometric authorization, such as Apple Pay or Google Pay. Biometrics rely on unique biological characteristics that verify who you are, such as your thumbprint or facial recognition.
“With that biometric authorization component, it’s much more difficult for a fraudster to use that mobile payment information to make purchases,” he says.
Buxton says EMV chip card technology has also made shopping more secure.
“It creates a unique transaction ID for that particular purchase,” he says. “That information is encrypted and is readable only by your financial institution. So your card information is never discoverable at the point of sale. The only way a fraudster would be able to get that information is if they are able to decrypt it as it was in transit to your bank or financial institution.”
As for the old-school magnetic strip technology? Buxton says those cards are the least secure. As all of your card information is stored on the strip, he says thieves can easily capture your information as the card is being swiped.
Enable fraud alerts
Real-time fraud alerts allow you to be notified whenever suspicious activity is detected on your card. Let your credit card issuer or financial institution know that you would like to receive a text message, email or phone call whenever anything unusual is detected with your account. You may also be able to set parameters for the alerts. For example, Buxton says you can opt to receive notices when your card is being used in an area where you don’t normally make purchases.
Use credit cards instead of debit cards
Do you use your debit card when shopping? Buxton explains why it’s not wise to do so.
“A debit card is linked to a bank account, like your checking account,” he says. “If a fraudster gets access to your debit card number, they now have the ability to take that card to an ATM and pull all of your money out of your bank account. That can disrupt any type of automated drafts that you may have or pending payments you have coming out of your bank account. That’s certainly something no one would want to have to deal with.”
If fraud does occur on your credit card, Buxton says the liabilities are far more superior to a debit card. With a credit card, you have a greater window of opportunity to report the fraud to your bank or financial institution and have the fraudulent charges reversed. With a debit card, if a certain amount of time passes, the consumer may be on the hook for a fraction of the fraudulent transactions that took place.
“As consumers move away from cash transactions and are more payment card focused, that only increases the pool of available credit card numbers that fraudsters can use,” he says. “The threat is always there. Consumers are better off assuming that at any given moment their card number could be or has been compromised.”
Linda Bell joined FOX Business Network (FBN) in 2014 as an assignment editor. She is an award-winning writer of business and financial content. You can follow her on Twitter @lindanbell