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Credit card fraud is a serious issue, with thousands of cases reported each year. It’s a leading cause of identity theft, leaving victims to deal with the frustration of charges they never made. While credit card companies take strong measures to prevent fraud, it can still leave those affected feeling vulnerable and overwhelmed.
What Is Credit Card Theft?
Credit card theft involves the stealing and manipulation of credit card numbers with the intent of engaging in fraudulent activities. This kind of theft can occur in various ways. For example, a thief might search through your trash for receipts or credit card statements that contain the account numbers. Similarly, your information could be taken when you hand your card over for payment, such as a waiter surreptitiously stealing the same information while you are dining. Fraudsters also use the internet to steal your data. They may create a website that looks identical to your bank's site. Additionally, scammers may contact you by phone or email, claiming that you need to log onto that site to resolve an issue. They often emphasize unauthorized charges to create a sense of urgency and prompt people to act without verifying first.
- Credit card fraud is a type of identity theft that involves using another person's credit card information without their permission to make purchases or access funds.
- Credit card fraud may also involve creating counterfeit cards, stealing someone's mail, and hacking into a person's account.
- You can take precaution to protect yourself from being victims of credit card fraud by regularly monitoring your credit score and account activity, avoiding giving out personal financial information online, and reporting suspicious activity to authorities.
How Can You Protect Yourself From Credit Card Theft?
Credit card fraud is a form of identity theft. There are ways to mitigate the risk of a major credit disruption. If you are contacted by that would-be representative, for instance, who is urging you to go to a website, or divulge information associated with your credit card accounts, you have the right to simply hang up or otherwise disengage. You might tell them that you find it unusual that you are being contacted and will reach out to your bank on your own. This will foil their attempts to get information with your unwitting help and make it much more difficult for them to steal from you.
In an age when credit cards are used in myriad settings, including online from your easy chair, you have more control than you might think when it comes to protecting yourself from credit card theft. An obvious way is to keep track of your physical cards. Keep them in a safe place and if you lose one, immediately call to stop service and request a new card. This way, if it is found, when it is inevitably used, any sale or request will be denied.
What Happens if You've Been Victimized?
As a consumer, you may wonder how to avoid becoming a victim of credit card theft and what happens if it occurs. If you are a college student, for instance, you'll likely be offered any number of credit card opportunities, but you should educate yourself on each before applying. You might pay particular attention to how a credit card company deals with lost or stolen credit cards.
If you've been victimized and are worried that your credit score will be affected, you can contact the three major credit bureaus to dispute any claims you feel need to be addressed. Experian, Equifax and Transunion employ representatives that will try to work with you on these matters, if you simply reach out to them. Advocating is one of the keys to remedying victimization. They might not necessarily reach out to you, but you can certainly reach out to them to plead your case.
Tips to Protect Yourself from Credit Card Fraud
One of the first things that you can do to minimize your risk is to thoroughly review your credit card statements every month. If you see anything that appears to be out of order, you should call your card issuer immediately. Being very protective of your account information is also a mitigator. Destroy old statements, for instance, rather than simply throwing them into your trash or recycling, where somebody down the road might pluck them out.
Cynicism is a little bit of an asset when it comes to protecting yourself from credit card fraud. Be wary of anybody reaching out to you, saying that they represent some agency that is requesting your personal information. These folks can be hard to capture, but relatively easy to thwart. If you recognize a phishing scam, for instance, you'll know to disengage immediately. This will have the effect of turning the scammer away from you and on to their next potential victim.
What Is Your Credit Score?
FICO® stands for the Fair Isaac Corporation, which was a pioneer in developing a method for calculating credit scores based on information collected by credit reporting agencies. Your FICO score is effectively the same thing as your credit score. Although different credit reporting agencies may weigh factors slightly differently, they are all essentially measuring the same thing. There is a range of FICO, or credit, scores. While a poor credit score is anything below 600, a good credit score is around 700.
The FICO score is calculated using different elements of a borrower's credit card data, which is grouped into five categories. Each represents a percentage of the overall score:
- Length of credit history
- Amounts owed
- Payment history
- Credit mix
- New credit
Credit, or FICO, scores fall into five levels, from poor to excellent. All of your decisions and actions or inactions determine which level you fall into. More importantly, other people's actions with your credit cards can determine your overall score. Each level represents a portion of the score:
- 300-579 equals Poor Credit
- 580-669 equals fair credit
- 670-739 equals good credit
- 740-799 equals very good credit
- 800-850 equals excellent credit
Should You Worry About Credit Card Theft?
The short answer is yes because it happens with enough frequency that the need to protect yourself is real. That being said, it is unfortunate when consumers alter their spending habits because of fraudsters that are looking to steal their credit card numbers and other bits of crucial personal information that lead to the hacking of credit card accounts
