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Credit Card Fraud: Protective Measures & What to Do If It Happens to YouWhether you’re already a victim of credit card fraud, or you’re just looking for ways to try and prevent it, we can help.

This comprehensive post covers how credit card fraud happens, how often it happens, how to protect yourself, and how to respond (and clean up your credit) if it happens to you.

How credit card fraud happens

There are two categories of credit card fraud, both of which mean exactly what they sound like: 1) card-not-present fraud and 2) card present fraud.

Card-not-present fraud (CNP)

This is the most common type of credit card fraud, as thieves do not need to physically steal the card, or even see it. Stealing your credit card information is enough to get the job done. In card-not-present fraud, thieves may get their hands on your credit card info via:

  • Hacking
  • Phishing
  • Dumpster diving

Card present fraud

Again, this is exactly what it sounds like, in that thieves have physical access to your credit card. In card present fraud, thieves may:

  • Use a skimmer to extra info from the card
  • Take a picture of your credit card
  • Use a lost credit card
  • Use a stolen credit card (e.g., from your wallet, home, mailbox)

How credit card information gets used

Obviously, if a thief has your actual credit card, they can use it to make in-store purchases. That can be risky business, though, as in-store security cameras make it easier for authorities to track them down. What’s more common anyway is for a thief to have only your credit card information, which they can use to:

  • Charge online purchases
  • Take over one of your existing accounts (by changing your address and requesting a new card)
  • Open a new fraudulent account
  • Sell on the dark web

Thieves can also use your credit card information to make counterfeit cards, but counterfeiting is harder these days thanks to embedded EMV chips.

How often it happens

According to a study by Javelin Strategy & Research, there were 15.4 million victims of identity fraud in 2016. That’s 2 million more than the previous year, representing an increase of 16 percent over 2015. As reported by Fortune’s Jeff Bukhari, “The study did not look exclusively at credit card [fraud], but Javelin said the vast majority of identity theft fraud is linked to credit cards.”


  • Card-not-present fraud rose 40 percent in 2016
  • Account takeovers rose 61 percent in 2016
  • New fraudulent accounts rose 40 percent in 2016

To what can we attribute the uptick in credit card fraud? The very thing many believed would stop it:

“Many thought the use of electronic chips would derail criminal activity,” writes Bukhari. “But as it turns out, the new electronic chips embedded in cards seem to be actually spurring on more fraud than they prevent. The chips have made it harder for thieves [to] walk into a store and purchase goods with a counterfeit card, so the criminals are keeping their illegal activity online, where the new chips do not come into play.

“The anonymity of the internet also makes fraud less risky than an in-person scam where the criminal’s face is likely on camera, and the possibility of immediate apprehension by authorities exists. So in a way the new chips have helped fraudsters stay out of trouble.”

Bottom line, the prevalence of credit card fraud is overwhelming, and the risk to you is real.

How you can protect yourself


1) Don’t click on links inside emails that say they’re from your credit card issuer, as they could be fraudulent. Instead, go to the issuer’s website, login to your account, and look for your messages there. If you don’t see anything relevant to the email, call your credit card issuer. If it was a legitimate email, they will be able to tell you how to proceed.

2) Only use your credit card on sites that:

  • Show a lock icon and https:// in the address bar
  • You are familiar with (or that you take the time to verify for legitimacy)

3) Don’t store your credit card information on websites. Yes, it’s more convenient for you, but it also makes it easy for hackers, too. If you use a password manager (see below), it can save credit card information for you; when you enter your master password, it will auto-populate the fields.

4) Get smart with your passwords:

Sound overwhelming? Don’t let that dissuade you.  You can make it all a lot easier with the use of a password manager.

At home

5) Keep a list of all your credit cards – with relevant information – filed away in a safe place. This list should include credit card issuers, issuer phone numbers, account numbers, expiration dates, and three-digit security codes. This way you won’t have any trouble finding the information you need to reference if your credit cards are physically stolen (or lost). Keep this sensitive information in a safe or under some sort of lock and key.

6) Don’t leave credit card statements or credit cards just lying around the house. Obviously, you like to think you can trust everyone who comes into your home, whether they’re there in a personal or professional capacity. But the truth is, you just never know, and it’s better to be safe than sorry.

7) Shred credit card statements – and destroy expired credit cards – before throwing them away. Statements have your account number on them, as well as your name and address. And unless you were already a victim of fraud (in which case the issuer changed your account number) then the only thing that will change on your new card is the expiration date and 3-digit security number, not the account number. See a list of other documents that need shredding before disposal.

Out and about

8) Limit the number of credit cards you carry. The only one you need is the one you’re planning to use (or want to have on you in case of an emergency). Keep the rest in a safe place at home.

9) Don’t leave your credit card exposed on a counter or table. Prying eyes could memorize your account number and expiration date, or surreptitiously take a picture of it.

10) Don’t let credit cards out of your sight. The most obvious obstacle to this practice is using credit cards in restaurants. Unless you pay at a register up front, your credit card will be out of your sight from the time your server takes it from the table until they return. This gives them ample time to skim it. As we blogged about a scam like this in 2013, this is not something you need to worry about with the vast majority of restaurant staff members. Buy it only takes one bad apple to turn you into a victim.

11) Before leaving a store, double-check that you have your card with you. We use them so much, that taking credit cards in and out of our wallets is something we do automatically, without much thought. Well, start thinking about it. Before you pick up your bags to leave, double-check your wallet to be sure your credit card is there.

12) Check for skimmers at ATMs, gas stations, and parking lots. Sure, skimmers can blend in, which is why thieves use them. But if you’re actually looking for something suspicious, chances are good you’re going to see it.

In general

13) Don’t let anyone borrow your credit card. Even if you trust the person 100 percent, certain they would never commit credit card fraud against, you may not be so certain about a couple of other critical considerations. One, are you certain of the steps they will take to protect your credit card? And two, are you certain about the trustworthiness of other people who could have access to your friend or family member’s wallet – at home, at work, or anywhere else?

14) Don’t give your credit card information to anyone who calls you for it. This is not to say you shouldn’t give credit card info over the phone. Just only do it when you are the one to initiate the call, using a number you know to be legitimate. That is the only way to verify who you are talking to; even caller ID can be manipulated.

15) Don’t sign receipts with blank lines. Anything could be added later and charged to your account. To guard against it, fill in blank lines with a zero.

16) Keep your receipts and/or a record of your transactions. They will come in handy to compare with your credit card statement. Granted, if you only use your card for a couple of purchases a month, you’ll have no problem remembering. But if you use your credit card several times a week, you’ll be hard-pressed to catch everything. Without receipts or a record, if you see a fraudulent charge on your statement, you’ll have nothing to compare against and may assume it’s yours when it’s not.

17) Check your online credit card account regularly. If you can do it daily, great. At the very least, check a few times a week. The sooner you can spot fraudulent charges, the quicker you can report them and minimize the damage.

18) Set up alerts for charges. Obviously, it’s a good idea to set up alerts for large purchases. But it might be even more important to be alerted to super-small charges. Fraudsters often verify the legitimacy of a credit card with a small transaction first. We’re talking as little as $5 or less. Contact your credit card issuer for details on how to set up your alerts.

19) Let your credit card issuer know when you move or travel. The more up-to-date they are on your whereabouts, they easier it will be for them to spot fraudulent transactions.

20) Always use the phone number on the back of your credit card. Never a number provided to you in an email. Never a number provided to you in a voicemail. They could be fraudulent. If you don’t have your card (or a list of your credit card information), look on your credit card issuer’s website (that you know to be legitimate; there are fake websites out there, too).

21) Consider placing a credit freeze on your credit reports. This will prevent new creditors from being able to check your credit reports. Since most credit card issuers will not issue new credit without a credit check, this is a great protective measure. That said, a credit freeze also applies to any new creditors you want to apply through as well. So if you are in the market for a loan or new credit card, you will need to lift the freeze first. Still not sure? As we blogged about credit freezes last year, consider the advice of the Public Interest Research Group (PIRG). As Weisbaum reports, U.S. PIRG “now advises everyone to put freezes on their accounts, even if they haven’t had their sensitive personal information stolen.”

22) Keep an eye on your credit reports. Fraudulent charges will show up on your statements. But unless you start receiving the statements, you’ll need your credit reports to alert you to fraudulent accounts on your credit reports. This means you do not want to limit your credit monitoring to every 12 months. Monitor your credit all year long through free credit monitoring sites. (Just be sure to sign up for these before you place a credit freeze on your account, as no one can be approved for access to your credit once the freeze is in place.)

What to do if credit card fraud is committed against you

No matter how many protective measures you take, there is no guaranteed means of preventing credit card fraud. Fortunately, as the FTC explains, your liability for unauthorized credit card use cannot exceed $50. And if it’s only your credit card number that’s stolen (not the actual card) or you report it before any unauthorized charges are made, your liability is zero.

If you discover fraudulent credit card charges or accounts in your name, you should:

Beyond that, double-check the protective measures outlined above to be sure you’re doing everything you can to protect yourself from credit card fraud going forward.