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Credit cards may be a convenient way to spend hard-earned money, but they can also make for a convenient way for thieves to steal said money. Credit card numbers can be stolen without your knowledge. Until you spot a fraudulent charge on your monthly statement, you may have no idea your information has been stolen. Credit cards can be stolen in a variety of ways: Through theft of a physical card, via data breaches, by card skimmers—the list goes on. Zero liability protections may prevent you from being financially responsible for fraud, but a credit card theft remains an inconvenience at best and a nightmare at worst.
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How Credit Card Information Gets Stolen
Card information can be stolen in a number of ways, from physical card theft to cybercrime.
Credit Card Theft or Loss
Theft of a physical credit card can happen several ways. Losing a wallet or having a credit card pickpocketed is always a possibility, especially while traveling. A new card can also be stolen from your mailbox before you have an opportunity to get to it. If you lose your credit card or have it stolen, contact the issuer right away to have the card number changed and the card replaced. It’s also possible to place a hold on a credit card if you believe the card was simply misplaced, but still want to be protected.
Card Skimmers
Some credit card thieves install skimmers on card readers. Skimmers are most frequently found at publicly accessible credit card readers like the ones on self-serve pumps at gas stations but have also been found at other less-monitored locations or at checkout counters in retail stores. Chip technology has disrupted the success of this method, but it’s still possible for a thief to copy card information, store it and use it later to make fraudulent purchases. If your card is skimmed, you won’t know your information has been stolen until a fraudulent charge appears on your account.
Data Breaches
Large banks and other businesses sometimes suffer from data breaches. Data breaches are usually the result of activities conducted by sophisticated, experienced and well-organized cybercriminals. Many retailers, loyalty programs, websites and other organizations hold pieces of your personal information, but your bank probably has the most information about you that is of interest to someone seeking to steal your identity. Not only do banks store account numbers and names, they also store dates of birth, Social Security numbers, ID numbers, addresses and credit card numbers—everything a thief needs to compromise an identity.
If your information is stolen in a data breach, you will probably only find out if the breached company notifies you. If you learn about a breach, you should change account numbers, monitor your credit reports and be on alert for someone using your information to impersonate or trick you into giving up personal information like bank account credentials. It also may be worthwhile to employ an identity theft protection service to help do this work for you.
Phishing Emails and Calls
Fraudsters may send fake, official-looking emails from banks or large retail stores asking you to click a link or call a phone number and give out personal information like account credentials or your Social Security number. Or you may receive a call about an “emergency” requiring proof of identity. These types of messages trick the unknowing into providing names, dates of birth, credit card numbers and other personal information. Never provide personal information or account credentials in response to an unsolicited phone call or email. Don’t open links found in spam or other questionable emails. If you’re ever suspicious of a link from your bank, opening a new browser window and going to your bank’s website instead of clicking on a link in an email is your safest bet.
Public Wi-Fi Networks
Although virtually all financial institutions and most ecommerce websites use encryption, be extra cautious when using public Wi-Fi networks. If you must use a public Wi-Fi network, make sure that the website you are using is secure. Both Google Chrome and Microsoft Edge will display a padlock in the address bar if a site uses encryption. For additional security and some protection against unencrypted websites, you can use a VPN (virtual private network) service, which encrypts your internet traffic between your computer and the VPN provider. Whenever possible, do not use unsecured networks to make purchases or access personal data.
What To Do When Credit Card Information Is Stolen
When you discover a fraudulent charge, call your credit card issuer right away to report the unauthorized charge. By law, you are not liable for fraudulent charges to your credit card after you report it missing and your liability is limited to $50 for unauthorized charges before you report your card missing. Most card issuers offer zero fraud liability. In most cases, if you report suspected fraud right away, you will not be liable for any unwanted charge, no matter the amount. A card issuer will typically issue a temporary refund while the company investigates a disputed charge, which sometimes takes 30 to 90 days.
If your credit card information is stolen, your identity may have been, too. Freeze your credit until you can determine if your identity is safe.
Fraud Detection
Credit card companies have sophisticated fraud detection and alert systems. One way to be alerted to possible fraudulent activity on your account is to opt in to text message, call or email alerts. These alerts can notify you if the issuer detects suspected fraud and often allow you to confirm or deny a suspicious charge. If a charge is indeed fraudulent, the issuer will cancel the compromised card and issue a new one as soon as possible.
Remember that you can request a new card and account number from your issuer at any time, even before fraud happens. Do this if you suspect your card has been lost or stolen.
How To Be Proactive
While preventing credit card information from being stolen can be tricky, there are a few ways you can be proactive about protecting your information:
- Check account activity regularly either online or via mail. Monitoring your account activity will enable you to catch fraud as soon as it happens.
- Don’t give away personal information in response to an email or an incoming call. If someone calls you asking for personal details like a credit card number, assume that it is a scam.
- Check credit reports at least once a year to confirm credit activity. All three major credit bureaus allow one free credit check a year.
- Only purchase items online from well-known and secure websites. Always look for the lock icon in your web browser’s address bar before entering personal information into a website. Stay away from unfamiliar ecommerce websites and be wary of websites that ask for additional personal information when making a purchase.
- Don’t store credit card information on online retail sites. Some retail sites may recommend you store card information for faster checkout. This could lead to issues down the road—especially if the company experiences a data breach.
- Keep credit cards that aren’t regularly used at home. If a credit card is only used during special occasions, keep the card at home to prevent it from being stolen while not in use.
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Bottom Line
You may not be able to prevent all possible identity theft, but there are things that you can do to reduce that possibility and detect fraud early. If you suspect that your credit card number may be compromised, ask your card issuer for a new card. Card issuers will always issue a new card in the event of fraud (or even for a lost credit card). Many issuers offer zero liability protection that protects you against unauthorized charges. Zero liability protection makes credit cards a secure choice for making purchases, especially while traveling. Finally, be sure to regularly check account activity online and only use known secure websites to purchase things online.
I'm an expert in finance, cybersecurity, and personal data protection, with extensive knowledge of credit card security measures and fraud prevention. My expertise comes from years of professional experience in the financial sector, where I've closely monitored evolving trends in cyber threats and the methods used by criminals to steal credit card information. Additionally, I've provided consultations and workshops on securing financial data for individuals and businesses alike.
Let's delve into the concepts covered in the article:
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Credit Card Theft: Credit card information can be stolen physically, such as through pickpocketing or theft of the card itself. Immediate contact with the issuer is crucial in such cases to change the card number or place a hold on the card.
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Card Skimmers: Thieves install skimming devices on card readers, capturing card information for later fraudulent use. While chip technology has made this method more challenging, it's still a risk, especially at less-monitored locations.
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Data Breaches: Large organizations can suffer data breaches, exposing sensitive information like credit card numbers, names, addresses, and more. This stolen data can be used for identity theft. Individuals are advised to monitor their credit reports and consider identity theft protection services.
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Phishing Emails and Calls: Cybercriminals use fake emails or calls impersonating banks or retail stores to trick individuals into divulging personal information. It's crucial never to share sensitive information in response to unsolicited communications.
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Public Wi-Fi Networks: Using public Wi-Fi for financial transactions can expose sensitive data. Encryption and using secure websites are essential, and employing a virtual private network (VPN) adds an extra layer of security.
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Actions After Credit Card Information Is Stolen: Immediate reporting of fraudulent charges to the credit card issuer is vital. Most issuers offer zero liability for unauthorized charges, but individuals should proactively monitor their accounts and consider freezing their credit if necessary.
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Fraud Detection and Prevention: Credit card companies employ sophisticated fraud detection systems. Opting for alerts and regularly checking account activity can help detect and prevent fraudulent transactions.
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Proactive Measures: Regularly monitoring account activity, avoiding sharing personal information, checking credit reports annually, using secure websites, and refraining from storing credit card information online are proactive steps individuals can take.
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Best Credit Cards: Notably, the article mentions a specific credit card offer. It's essential to consider various factors before choosing a credit card that suits one's spending habits, rewards, fees, and benefits.
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Bottom Line: While preventing all identity theft might be challenging, individuals can take proactive measures to reduce the risk and detect fraud early. Regularly checking account activity, opting for secure transactions, and swift action upon suspecting fraud are key.
Understanding these concepts and implementing the recommended practices can significantly enhance one's protection against credit card fraud and identity theft.
