The Federal Trade Commission (FTC) reports that credit card fraud complaints are on the rise once again, after something of a lull in 2020 and 2021. In the third quarter of 2022, the FTC received 20,963 complaints of credit card fraud—an increase of 14.5% over the same period in 2021.
Whether you shop online or in-person, protecting sensitive information such as your credit card number is essential to your financial health. You can avoid credit card fraud by staying proactive and using your card only when you truly trust a transaction, among other things.
Here are seven ways you can prevent becoming a victim of credit card fraud, and what to do if you do fall victim.
7 Ways to Avoid Credit Card Fraud
Keeping these measures in mind can help protect you and your credit card information and prevent credit card fraud:
1. Don't Give Out Your Card Number
This is probably the oldest and most basic credit card security tip there is, but it bears repeating.
Many of us have grown used to typing card numbers into shopping websites and the like. It's important to think twice before providing your card number (or even its last four digits) when prompted via email, chat or by phone.
Unless you're absolutely sure you're dealing with someone you can trust—based on more than the fact that they've identified themselves as such—don't disclose your credit card number. If anyone asks you to do so, mental alarms should go off. Explain that you're not comfortable giving out your number, and then contact the company or agency making the request to make sure the communication is legitimate.
2. Only Shop on Trusted Websites
If an email or online ad touts a deal that sounds too good to be true, it probably is. Clicking a link may send you to a dodgy shopping site or one that's posing as a reputable retailer.
You're best off not clicking at all; but if you succumb, double-check the web address of the site you're on to make sure it's what it claims to be. Better still, begin your online shopping ventures by typing in the addresses of sites you know and trust, rather than following external links.
3. Don't Store Card Numbers With Online Retailers
Even when you've taken steps to confirm you're using a reputable online store, resist the urge to save your card information in your online shopping account.
The concern isn't that the retailer will misuse your data, but that doing so could allow a criminal who obtains your shopping account password to make purchases without even having to know your card number.
4. Be Wary of Verification Texts
Scammers' use of text messages is on the rise, and one of their ploys is pretending to be a credit card issuer verifying your identity.
While you may be wary of anyone asking you for your credit card number, scammers might ask for less obviously critical information, such as the amount of your last statement balance or the location of your last transaction. These are questions your real card issuer might ask to confirm your identity, and the scammer is hoping to use them to impersonate you so they can hijack your account.
Instead of responding to a text seeking personal information, contact your card provider using a phone number or email address you know is legit and ask if there are issues with your account.
5. Guard Your Cards
There's good news and bad news about cards that allow you to make contactless payments by tapping or waving them over a scanner.
The good: Those tap-and-pay cards allow you to make purchases without giving up control of your card, zipping it through a potential skimmer or even having it touch anything. On larger transactions your signature may be required, but at many points of purchase, that's not even necessary, which can make checkouts a breeze.
The bad: The same features that make purchases easy for you can do the same for anyone who has your card. So, if your card is stolen, a thief can quickly rack up purchases with ease.
This means it's more important than ever to take care with whom you allow to take possession of your cards. Keep an eye out for odd transactions if your card has been out of your sight when making a payment, like at a restaurant. And if your card is stolen or goes missing, take action immediately to cancel it and stop unauthorized payments.
6. Know (and Use) Your Cards' Security Features
If your card issuer offers a companion smartphone app for managing your account, it's a good idea to use the app.
Installing and registering the app may take a few minutes, but once you've set it up, it can simplify account payments, track transactions and, in many cases, allow you to disable the card temporarily if you've misplaced it or are concerned it has been stolen. This option can be a lifesaver when you're sure (but not 100% sure) you know where you left a card, and you don't want to report it missing or request a new card.
If you do need to cancel a card altogether and request a new one, your smartphone app may let you do that as well.
7. Go Cardless
If your card's smartphone app supports contactless purchases, or if you load your card information into a digital wallet app, you can use your phone for tap-and-pay transactions without having to carry your cards—or risking their loss or theft. Your phone's security features typically can prevent card fraud even if a thief manages to grab your phone.
What to Do if You're a Victim of Credit Card Fraud
If you believe you've been victimized in a credit card scam, you should take action immediately to minimize the damage:
- Contact your card issuer immediately to report the matter and request reversal of any charges and replacement of your compromised card.
- Change the password on your online account and smartphone app, and on any bank accounts you may have enabled to provide electronic payments to that credit card.
- Alert law enforcement about the scam. Starting by filing an identity theft report at the FTC's IdentityTheft.gov website. You can provide a copy of that report to state or local law enforcement agencies as appropriate, on advice from your card issuer.
- Consider placing an initial fraud alert on your credit reports at one of the three national credit bureaus (Experian, TransUnion and Equifax). Fraud alerts instruct lenders to verify your identity before processing any credit applications they receive in your name. Requesting one at any of the national credit bureaus automatically applies alerts to your credit reports at all three credit bureaus. Fraud alerts can thwart criminals attempting to use your personal information to impersonate you.
The Bottom Line
The convenience of credit cards and online shopping bring a need for extra vigilance to prevent abuse and theft. These common sense actions can help you avoid becoming a victim and decrease losses that cost lenders millions of dollars each year—and increase the costs of using credit cards for all customers.
If you're concerned that your personal data has been compromised, keep an eye out for unfamiliar transactions on your credit card statements, and consider using Experian's free credit monitoring service to detect unauthorized credit applications made in your name so you can take quick action.