Protect Yourself from Credit Card Fraud

Credit card fraud has been around as long as there have been credit cards. However, it is becoming a growth industry as the economy declines and credit card limits keep rising.

As a professional accountant, I often receive panicked calls from clients who are concerned that their credit cards are not safe. I explain to them that, with some common sense steps, they can make their cards less likely to be stolen. Protecting yourself from credit card fraud should be a cornerstone of your financial stability. While there is no way to guarantee that you won't be a victim of this type of theft, you can make yourself less of a target. Like any other theft, perpetrators look for the easiest heist. If you make your credit card information more secure, thieves are likely to seek out easier prey. Here are four easy ways to make yourself less vulnerable to these plastic thieves.

1. Physically protect your credit card.

Most people wouldn't leave a $20 bill laying out in the open, but many are lax with leaving their credit cards out in view. Credit cards are even more vulnerable to theft than cash, as it is only the number that needs to be lifted and not the actual card. You may find that your credit card has been used to fraudulently purchase merchandise online when your card is still in your wallet. Never let your card out of your view, even during retail or restaurant transactions.

2. Control all documents that contain your credit card number.

Your full card number appears more times than you think. While many transaction receipts do not print the full number, some do. Never throw your credit card receipts in the garbage or leave them in view. Store all credit card receipts in a locked file and shred after they are no longer needed. If you engage in a transaction with carbon receipts, ask for the carbons and shred them at home.

Your monthly credit card statement also carries the card number. Discuss with your bank the ability to go paperless. This allows you to see your statements online but prevents thieves from stealing your credit card statement from the mailbox. If you continue to receive paper statements, keep them in a locked file.

3. Reconcile your credit card statement monthly.

This is the most critical step to prevent large credit card fraud losses. Federal law requires credit card companies to cap losses of victims to $50 from the time the fraud is reported. If you do not review your statement each month, you may miss fraud occurring. Save all of your credit card receipts every month in a locked file, then compare them to the month-end statement. Ensure that you recognize every transaction on the statement and call the credit card company immediately if something is amiss.

4. Report the loss of your wallet or purse to the credit card company immediately.

To make this process easier, in a locked file, keep a list of all of your credit card numbers and their expiration dates along with the appropriate telephone numbers to call to save time. This allows the card company to freeze your cards immediately and prevent unauthorized usage.