How to Protect Your Credit Card From Theft and Fraud

Credit cards are widely used in daily transactions, offering convenience and certain security features. Consumers must actively understand and implement protective measures to prevent financial harm from theft and fraud.

Safeguarding Your Credit Card Details

Protecting physical credit cards involves proactive measures. Upon receiving a new card, signing the back immediately deters fraudulent signatures. Keep the card in a secure location, such as a wallet or purse, and avoid leaving it unattended in public spaces. When a card expires or is replaced, shred the old one into small, unreadable pieces to ensure sensitive information cannot be retrieved. At automated teller machines (ATMs) and gas pumps, check card readers for unusual attachments or loose parts, which could indicate a skimming device designed to steal card information.

Securing online credit card transactions involves practices to shield sensitive data. Always verify that a website uses “HTTPS” in its address bar, indicated by a padlock icon, before entering payment information. Create strong, unique passwords for all online accounts, especially those linked to financial information. Avoid saving credit card details on merchant websites, as this exposes information if the website experiences a data breach. Some card issuers offer virtual card numbers, which are temporary, randomly generated numbers linked to the primary account, providing an additional layer of security by masking the actual card number during online purchases.

Protecting against digital theft requires awareness of common scam tactics. Phishing attempts often arrive as emails, text messages, or phone calls that try to trick individuals into revealing personal or financial information. These messages may appear to be from a legitimate company or government agency, using urgent language to prompt immediate action. Never provide credit card details or other sensitive information in response to unsolicited requests, and avoid clicking suspicious links or opening attachments from unknown senders. Refrain from using credit card details over unsecured public Wi-Fi networks, as these connections are vulnerable to eavesdropping by cybercriminals.

Vigilant Account Monitoring

Regularly reviewing credit card statements is a fundamental step in detecting unauthorized activity. Cardholders should meticulously check both paper and digital statements for any unfamiliar or suspicious transactions. Reviewing statements at least once a month allows for timely detection of errors or fraudulent charges. Prompt identification of discrepancies can prevent further financial complications and supports quicker resolution.

Setting up transaction alerts with the credit card issuer provides an early warning system for potential fraud. Many card issuers offer alerts that notify a cardholder via email or text message about specific account activities. These alerts can be configured for purchases exceeding a certain amount, international transactions, online purchases, or transactions at specific merchant types or locations. Receiving immediate notifications for unusual spending patterns or suspicious activity allows for quick investigation and reporting.

Periodically checking credit reports helps identify identity theft. Consumers are entitled to one free credit report annually from each of the three major credit bureaus—Equifax, Experian, and TransUnion—through AnnualCreditReport.com. Reviewing these reports allows individuals to spot any new credit card accounts opened in their name or suspicious inquiries that could signal identity theft. Spacing out requests from each bureau every four months can provide year-round monitoring of credit activity.

Actions for Unauthorized Use or Loss

When a credit card is lost or stolen, immediate action minimizes financial harm. Contact the card issuer directly and promptly to report the loss. This can be done by calling the customer service number found on the back of the card, on a recent statement, or through the issuer’s mobile app or website. Upon reporting, the issuer can immediately cancel the compromised card and arrange for a replacement. Many issuers also offer the option to temporarily lock or freeze the card, preventing new purchases while allowing recurring transactions to continue.

Disputing unauthorized charges on a statement is governed by federal consumer protections. Under the Fair Credit Billing Act (FCBA), a consumer’s liability for unauthorized credit card charges is limited to a maximum of $50, provided the loss or theft is reported promptly. Many card issuers voluntarily waive this $50 liability. To dispute a charge, cardholders must send a written notice to the card issuer’s billing inquiry address, not the payment address, within 60 days of the statement date showing the error. The written notice should include:

• Cardholder’s name
• Account number
• Date and amount of the disputed charge
• Brief description of the error

The card issuer is required to acknowledge the dispute within 30 days and investigate the matter within two billing cycles, or no more than 90 days.

If unauthorized credit card activity is part of an identity theft incident, take additional steps to protect your financial identity. Report the identity theft to the Federal Trade Commission (FTC) through IdentityTheft.gov. Freeze credit with each of the three major credit bureaus (Equifax, Experian, and TransUnion) to prevent new credit accounts from being opened in your name. This process must be initiated with each bureau separately, though federal law mandates it be offered for free. Filing a police report for identity theft provides an official record of the crime that may be required by some creditors or for other recovery processes.