How to Get the Best Credit Card Fraud Protection

How to Get the Best Credit Card Fraud Protection article image.

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Identity theft is big business for criminals. According to the Federal Trade Commission (FTC), identity theft reports more than doubled from 2019 to 2020, from 650,572 to 1,387,615. Credit card fraud is one of the most common forms of identity theft, making up roughly 28% of all reports the FTC received.

Federal law limits your liability for fraudulent purchases on a credit card to just $50. But some credit card companies go the extra mile and won't hold you liable for any unauthorized purchases at all.

What Is Credit Card Fraud Protection?

Credit card fraud protection is a benefit that protects you from unauthorized purchases on your credit card.

The Fair Credit Billing Act prohibits credit card companies from holding you responsible for unauthorized purchases on your credit card if you report it stolen before the thief uses your card. The same goes if someone manages to steal your credit card number but not your physical card.

If the fraudulent purchase occurs before you report the card stolen, federal law limits your liability to $50. However, many credit card issuers offer zero-liability protection, which means that regardless of the circumstances, you're not responsible for any unauthorized purchases at all.

Credit card companies have also taken additional measures to prevent fraud, including using complex algorithms to spot spending that's out of the ordinary based on your typical habits. This is why you may have a charge declined while you're traveling. Once you confirm that the transaction is legitimate, you can proceed with the purchase.

Here are other features that some credit card companies offer:

  • Card lock: Most major credit card issuers allow you to lock your card through your online account or mobile app as soon as you realize it's been lost or stolen. If you end up finding it between the couch cushions or somewhere else, you can immediately unlock the account and continue using it.
  • Virtual card numbers: Capital One, Citi and Wells Fargo offer virtual card or account numbers to their credit card holders. This feature allows you to create a new card number for different websites when you're shopping online. While each of these numbers is tied to your main account, they keep your real account number safe from prying eyes. Also, if someone manages to steal a virtual card number, you can simply delete it instead of having to request a new card from the issuer.
  • Contactless cards: Most major credit card issuers offer contactless credit cards. These cards use the same technology as mobile wallets like Apple Pay and Google Pay, allowing you to tap your card to an enabled reader instead of swiping or inserting it. The process goes faster than using your card's chip but provides the same level of security.

With these added services, credit cards do some of the hard work required to keep your identity safe.

Credit Cards With the Best Fraud Protection

If you're looking for a new credit card and security is one of your top priorities, it's important to shop around to find the right fit. Here are a couple of our favorite cards based on their security features:

  • Blue Cash Preferred® Card from American Express: Before you travel somewhere, it's generally recommended to contact your credit card company to let them know. But American Express is one of few card issuers that uses sophisticated enough fraud protection measures that you don't need to let them know you're going somewhere. This card also offers contactless capability and a card lock feature. Terms apply.
  • Capital One Venture Rewards Credit Card: This card provides contactless capability, virtual card numbers, card lock and credit score access and alerts. Keep in mind, though, that Capital One provides access to your VantageScore® credit score, which isn't as widely used by lenders as the FICO® Score.

As you consider these cards and others, take your time to consider the full benefits of each option before you make a decision. For example, consider the card's welcome offer, rewards program, promotional interest rates and other features that can provide value as you use it regularly. To find out which credit cards with fraud protection you're matched with, use Experian CreditMatch™.

How to Protect Yourself from Credit Card Fraud

While credit card issuers invest a lot in fraud protection initiatives, their efforts don't take the place of your own responsibility to keep your credit card information safe. Here are some concrete steps you can take to protect yourself from credit card fraud:

  • Keep your physical cards safe. It's best to keep your credit cards in your wallet or purse and to avoid leaving them around where they may be stolen. Also, be careful about who you allow to use your card. Add cards to a digital wallet like Apple Pay or Google Pay so you don't have to carry them everywhere you go.
  • Learn how to spot phishing attacks. Phishing is a type of scam that involves an email or text message that looks like it's from a legitimate source but will instead take you to a fraudulent web page where you may be asked to enter passwords or other information. Criminals often include links or attachments that can install harmful malware on your computer or phone if you click on them. With this malicious software, hackers can steal information directly from your device. Avoid opening email attachments unless you know for sure that they're safe, and always double-check links for the destination URL, which will appear when you hover your cursor over the hyperlink.
  • Use a virtual private network (VPN). Coffee shops, airports and other public places often provide Wi-Fi networks that anyone can access without a password. While they're convenient, they're also a hotbed for identity thieves who can "eavesdrop" on data you transmit from your phone or computer via the unsecure network, including credit card information. To protect your connection, consider using a VPN to add an extra layer of security.
  • Check your online account regularly. Credit card issuers have gotten good at spotting fraudulent transactions, but their methods aren't foolproof. Instead of waiting to get your monthly statement, check your online account at least once a week to make sure you recognize all account transactions. You may even choose to request transaction alerts so you get a text message or push notifications on your mobile device every time the card is used.
  • Monitor your credit. Checking your credit report regularly won't stop someone from using one of your current credit card accounts, but it can alert you if someone has managed to open a new credit card account in your name or take other actions that can harm your credit.

If you've fallen victim to credit card fraud, take steps to protect yourself quickly. Start by calling your credit card company to report the fraud, so it can cancel your card and send you a new one. If you have recurring charges on that card, you'll need to update the account information with the merchants when you receive the new card.

You'll also want to file a police report and an identity theft report with the FTC. Finally, consider adding a fraud alert to your credit reports or even freezing your credit to prevent fraudsters from opening new credit accounts in your name.

Use a Credit Monitoring Service to Maximize Protection

While checking your credit reports regularly is important, some credit monitoring services can provide additional convenience by updating you every time something on your credit report changes.

For example, Experian's free credit monitoring service provides real-time alerts when a new account or inquiry shows up on your Experian credit report. The same goes when new personal information is added to your report.

Using a credit monitoring service can help maximize your protection against credit card fraud and other forms of identity theft because it allows you to respond quickly instead of waiting until significant damage has already been done.

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