Credit cards have completely changed how we perceive credit, and how we pay, shop, eat and manage finances. Credit cards are a powerful financial tool that allows you access to an easy line of credit for you to make any transaction. They may resemble your normal debit card in a lot of ways, except that in a debit card, you need to have cash in your account to avail any service or make a transaction, while with credit cards, you can do all of these without having any credit in your account.
In this sense, a credit card can be thought of as an extended loan subjected to various interest rates, annual maintenance charges, and more. While any type of loan tends to affect the credit score, note that regularly paying back your credit card bills can help push up your credit score and highlight your creditworthiness.
But while these cards have numerous benefits, they also are the easiest target for fraud.
Yes, that's right! Credit card frauds are highly common and come in all shapes and sizes.
But what may constitute credit card fraud? How can you safeguard yourself against such scams and frauds? Read further to know!
Credit card frauds
Credit card fraud may not be simple theft of information or credit. These scams can be of many kinds. A few are mentioned below -
Phishing can be loosely described as individuals impersonating officials, business persons, and others to steal your personal information through emails, calls, and text messages. These individuals may also use well-known business logos and names to trap you.
Skimming is a common form of credit card fraud. Here, credit card details and information are 'skimmed' off through devices attached at common card swiping places like ATMs, gas stations, restaurants, and more. The stealer may produce a counterfeit card using your details.
3. Keystroke fraud
This is online fraud, wherein malware records every key you press to deduct your credit card details, PINs, and more. This is more common when individuals shop on unverified sites or transfer money.
Do remember that these are not the only kinds of fraud that happen. Stealers may take advantage of 'n' a number of things, like your debit card numbers, bank account details, Aadhar, PAN, and more, to design a fraud.
Can you be the victim of credit card fraud?
The answer to this question is Yes! As scary as it may sound, you can walk yourself right into a fraud without realizing it, not before it's too late. If you are careless with your card, visit unverified websites, share details with every person, and/or have weak passwords, you may become a potential victim.
Precaution is always a better solution. Prepare and safeguard every inch of your information with the latest tech and some of the below-mentioned pointers!
How can you protect yourself from credit card fraud?
Now that you understand how credit card fraud can happen, it is important to know how you can shield yourself from the same. This can be done through various means and methods. Let us read a few in detail!
1. Going for ‘zero liability’ cards
Several cards offer zero liability protection, limiting your liability to zero (subjected to terms and conditions). This means you would not be held liable for any amount in case of fraudulent purchases and similar transactions.
2. Having stronger passwords
The simplest protection against credit card fraud is to opt for strong and non-decodable passwords. Your password is recommended to be a tough combination of letters, numbers, and special characters. Also, make sure none of your credit cards has the same passwords. Having your name or that of your spouse or kid can be a potential invitation to information and credit theft.
Besides, never share your passwords with anyone for any reason whatsoever.
3. Looking in advance for security features
Before signing up with any credit card company, make sure you are well acquainted with their security features. This is particularly important so that you are aware of your security status and can avoid falling into fraud and mischievous transactions. Furthermore, watch out if your credit card company has free credit monitoring services and other security features to safeguard your credit.
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4. Monitoring your credit accounts
It is paramount that you monitor your credit transactions regularly. In a sea of transactions, you may fail to catch fraudulent or unauthorized transactions. On early deduction, you can not only alert the concerned authorities but also minimize your losses.
Besides, monitoring your credit inflow and outflow is a healthy exercise and induces spending and saving discipline.
5. Signing up for transaction alerts
Manually managing or signing for credit monitoring is a good move. However, there is another feature you can avail yourself of to be alert of your credit card usage, adding another layer of safety. Through this feature, whenever you make a transaction, an alert can be generated to you (through text message or email). Now, you can set alerts on various criteria like balance, exceeding limits, national, international transactions, etc., and more!
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6. Securing your information
Now, this is one thing that most credit card users ignore – the safety of websites, people, and places.
Surfing unverified sites, click baits, exposing your credit card numbers, shopping at unverified places, and revealing sensitive information on sites, websites, and phone calls can all lead to your sensitive information getting leaked. It is extremely important that you are careful with your credit card information and reveal information only in secured and verifiable places.
7. Investing in anti-fraud services
As a binary, as this advice may appear, it is better to be safe than sorry. Even with credit cards, you are better off prioritizing safety than later regretting not doing so. Even at a cost, investing in security and anti-fraud services may be the right move. You may want to keep all your security apps and features up to date for added safety.
8. Avoiding the use of credit cards in public places
Mostly, credit cards are used in places such as shopping malls, airports, etc. If you are not careful, you may be opening yourself to a considerable amount of risk, which can be cash or even information. For example, it is highly recommended that credit card users never use public Wi-Fi as theft of information is extremely common and high. Not to mention, your card can physically be robbed of you.
Also, you are better off if your credit card is used only by you and not by others.
9. Using different sets of credit cards for different payment obligations
As credit card users, you can make a smart move of not using only one card for every payment obligation. Payment of monthly bills, subscriptions, and other daily utilities can be done through one card/autopay, whereas if you purchase costly goods or make a large payment, a specially designated card can be kept aside.
This way, a random restaurant or a gas station does not have access to your credit information.
Other do’s and don’ts when using a credit card
While you can prevent major credit card frauds using the above-mentioned pointers, below are other simpler steps you can take to be extra cautious and vigilant.
1. Shred any documents that have your credit card details
2. Keep changing your credit card passwords regularly
3. Never update your credit card information on any social media
4. Avoid public Wi-Fi at all costs
5. Never say yes to 'Remember me/my password' on websites
6. If your wallet is stolen, cancel your credit card immediately and call concerning authorities
7. Before shopping, check the authenticity of the website. Do not engage if you find it shady
8. Review your credit statement every month with a fine comb to catch fraudulent activity, if any.
A credit card is an excellent financial product. It allows you to enjoy a few services, at the convenience of paying later. But it must be remembered that these cards are heavily susceptible to fraud and can acutely damage your credit score. Remember the pointers mentioned above to safeguard your credit card and always be wary of where, when, and how you use your card.