How To Avoid Credit Card Fraud Online

You can avoid credit card fraud online by securing your online accounts, avoiding saving your payment information on websites, being cautious of phishing scams, keeping a look out for credit card skimmers and more.

Continue reading to learn more about how you can avoid credit card fraud online and how to report it if you’re a victim. 

What Is Credit Card Fraud?

Credit card fraud is when an unauthorized individual uses your credit or debit card to make purchases without your permission. The biggest sign that you’ve been a victim of credit card fraud is seeing charges you didn’t make on your credit card statements. These charges can be as small as $1, up to thousands of dollars or more.

10 Ways You Can Avoid Credit Card Fraud Online

Here are ten ways you can avoid becoming a victim of credit card fraud online.

1. Secure your online accounts 

One of the best ways to help avoid credit card fraud online is by securing your online accounts with strong passwords. Each of your accounts should have its own unique password. This means you should never use the same password across multiple accounts. Reusing passwords places all of your accounts that use that password at risk of becoming compromised if only one account password is cracked.

The best way to ensure your passwords are always strong is by using a password manager. A password manager is a cybersecurity tool that aids you in generating, managing and securely storing all your passwords.

In addition to strong passwords, your accounts should also be secured with Multi-Factor Authentication (MFA). MFA is a security measure that adds multiple layers of protection to your accounts. Instead of only having to log in with your username and password, you would also have to provide additional authentication like a Time-based One-Time Password (TOTP) code from an authenticator app. 

2. Don’t save your card information on websites

The internet is constantly making online shopping easier, which means people are doing it more often than ever before. It’s crucial that when you’re shopping online, you’re taking the right steps to prevent yourself from falling victim to credit card fraud. One thing you should avoid doing while shopping online is saving your debit or credit card information on retail websites. There’s no way of knowing if the website you’re shopping on is going to experience a data breach, which could place your card information at risk of being leaked and used to commit credit card fraud. 

As a cybersecurity precaution, avoid saving your card information on retail websites or in other insecure locations such as your email account. 

3. Be wary of phishing scams

Phishing is a type of cyber attack that aims to persuade potential victims into disclosing personal information such as credit card numbers. Typically phishing scams work by cybercriminals displaying a sense of urgency and pretending to be someone the victim knows or a company they have an account with so the victim acts without thinking.

To prevent falling victim to credit card fraud, you should learn how to spot phishing scams. Some common signs of phishing scams include:

• Sudden requests for personal information
• Threats with serious consequences 
• A sense of urgency
• Offers that seem too good to be true
• Unsolicited links and attachments

4. Keep a lookout for credit card skimmers

Credit card skimmers are devices used by cybercriminals to steal your card information. Credit card skimmers are placed on top of actual card readers, such as those used in ATMs or at a gas pump. When an individual inserts their card into these skimmers, the skimmer scans it and sends the card information to the cybercriminal through Bluetooth. The transaction goes through normally so the victim doesn’t suspect a thing. When a credit or debit card is skimmed, a cybercriminal now has the victim’s cardholder name, number, expiration date and Card Verification Code (CVC) which they can then use to commit credit card fraud. 

To avoid having your card information stolen through credit card skimmers, inspect card readers closely before deciding to pay to ensure it’s not a skimmer. One way you can check for a skimmer is by checking for alignment issues. Because skimmers are placed on top of actual card readers, you may notice them sticking out at an odd angle or covering arrows on the panel. The FTC also has a few more ways you can detect card skimmers, along with pictures of what they look like. If you feel suspicious about a card reader, avoid using it and alert someone who can investigate further. 

5. Tap your card instead of inserting or sliding it

According to the FBI, credit card skimming is estimated to cost more than $1 billion each year for both consumers and financial institutions. Rather than sliding or inserting your card into a possible card skimmer, tap it instead. Most gas stations and grocery stores have enabled tap as an option to pay, which is actually a lot safer to do than inserting or sliding your cards since you can prevent skimmers from stealing your card’s information. 

If possible, use Apple Pay or Google Pay to make purchases, as these payment methods hide your actual card number with something called a “virtual card number.”

6. Use mobile payment apps

Mobile payment apps like PayPal and Venmo are great ways to make payments online without placing your actual card information at risk of being stolen. When using these mobile payment apps to complete online transactions, your data is encrypted end-to-end to prevent it from being exposed to cybercriminals. This means if you use a mobile payment like PayPal to make an online transaction, you won’t expose your card information – which can help protect you from becoming a victim of credit card fraud online. 

However, if you choose to use PayPal or Venmo, make sure to secure your account with strong passwords and MFA. Additionally, instead of choosing to link your bank account to your payment app, link your credit card instead, since it offers more consumer protection. 

7. Avoid conducting transactions over public WiFi

Using public WiFi comes with its risks, including the possibility of having a cybercriminal intercept your data through a Man-in-the-Middle (MITM) attack. A MITM attack is when a cybercriminal intercepts data that is sent between two entities for the purpose of stealing data and eavesdropping. 

When using public WiFi, avoid making any online transactions until you’re using a secure, private network. 

8. Immediately report when your card is lost or stolen

Losing or having your credit or debit card stolen can be scary because you don’t know the person who may have it. As soon as you notice that you have lost your card or have had it stolen, report the incident to your bank so they cancel your card and send you a brand new one with new numbers. The sooner you report it, the less damage that can be done with it. 

9. Keep your cards in a secure location

To prevent your cards from getting into the hands of cybercriminals and other malicious threat actors, you should always keep your credit cards and card information in a secure location. Your physical cards should always be kept in a physically secure location that you can keep an eye on. If you’re someone who likes to keep their card information stored somewhere online, like in their browser, because it provides easy access, we recommend removing it immediately. Browsers are not made to securely store sensitive information like credit card numbers and can be easily accessed by cybercriminals. 

If you wish to store your card information somewhere safe where you can easily access it, we recommend storing it in an encrypted password manager. 

10. Enable transaction notifications

Transaction notifications are when you receive an alert every time a transaction goes through your banking account. Usually, you can enable transaction notifications for a specific amount of money. For example, if you set a transaction notification to go off when you spend more than $10, every time you make a purchase that is $10 or more, you’ll receive a notification. If you want to receive notifications for every transaction that goes through your account, set your transaction notification to $1. You can update these settings on your bank account’s mobile application.

If you ever receive a notification for a transaction that you didn’t make, you can act quickly rather than notice after the fact when it’s too late. 

The Risk of Credit Card Fraud 

There are several risks associated with becoming a victim of credit card fraud, the major risks being identity theft and negative impacts on your credit report. Depending on how a cybercriminal was able to commit credit card fraud, such as hacking into one of your online accounts, there’s no way of telling how much information of yours they could have gotten away with. If a cybercriminal is able to get away with enough of your personal information, they could use it to steal your identity.

Cybercriminals often misuse the credit of the victim they’ve targeted, which can lead to major decreases in your credit score. Having your credit score severely impacted due to credit card fraud can make it hard for you to take out future loans under your name. 

How To Report Credit Card Fraud Online

You can report credit card fraud online by contacting your card issuer, placing a fraud alert on your credit report, freezing your credit and reporting it to the FTC.

Contact your card issuer

If your card is not physically lost or stolen, call the number on the back of it to report the credit card fraud to your card issuer. If your card is physically lost or stolen, go onto your card issuer’s website and locate their phone number to report the fraud. 

Place a fraud alert on your credit report

To place a fraud alert on your credit report, contact one of the three major credit bureaus: Experian, TransUnion or Equifax. Once you’ve placed a fraud alert with one bureau, that bureau will alert the other two. Placing a fraud alert on your credit report will prevent anyone from being able to open a new credit card or loan under your name. The fraud alert you place lasts one year, but you can renew it if you need to, and cancel it at any time. 

Freeze your credit 

Once you’ve placed a fraud alert on your credit report, you should also freeze your credit. In order to freeze your credit you’ll need to contact each of the three credit bureaus, not just one: Experian, TransUnion and Equifax. Contacting only one credit bureau and not the others will only freeze your credit with the bureau you contacted. Freezing your credit with all three will prevent anyone from accessing your credit report until you lift the freeze, which you can do at any time. 

Report the fraud to the FTC

The Federal Trade Commission (FTC) is constantly gathering information about fraud so they can notify the public about cyber crimes and support investigators to find perpetrators. You can submit a report to the FTC by going to the FTC website and clicking “Report Now.”

Keep Your Credit and Debit Cards Safe From Fraud

Credit card fraud can cause a lot of harm to your credit which can be difficult to recover from. In order to avoid becoming a victim of credit and debit card fraud, you must take the necessary steps to decrease the risks by securing your accounts with strong passwords and MFA. 

To make your life easier, consider investing in a password manager that not only helps you secure your online accounts but also secures your card information in an encrypted vault that only you can access. Start a free 30-day trial of Keeper Password Manager today to start mitigating the risks of fraud.