Avoiding Credit and Charge Card Fraud

A thief goes through trash to find discarded receipts or carbons, and then uses your account numbers illegally.

A dishonest clerk makes an extra imprint from your credit or charge card and uses it to make personal charges.

You respond to a mailing asking you to call a long distance number for a free trip or bargain-priced travel package. You're told you must join a travel club first and you're asked for your account number so you can be billed. The catch! Charges you didn't make are added to your bill, and you never get your trip.

Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways. For example, someone may use your card number without your knowledge.

It's not always possible to prevent credit or charge card fraud from happening. But there are a few steps you can take to make it more difficult for a crook to capture your card or card numbers and minimize the possibility.
Guarding Against Fraud

Here are some tips to help protect yourself from credit and charge card fraud. 

Do:

• Sign your cards as soon as they arrive. 
  
• Carry your cards separately from your wallet, in a zippered compartment, a business card holder, or another small pouch. 
• Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place. 
• Keep an eye on your card during the transaction, and get it back as quickly as possible. 
  Void incorrect receipts. 
• Destroy carbons. 
• Save receipts to compare with billing statements. 
• Open bills promptly and reconcile accounts monthly, just as you would your checking account. 
• Report any questionable charges promptly and in writing to the card issuer. 
• Notify card companies in advance of a change in address. 
  
  Don't:
• Lend your card(s) to anyone. 
• Leave cards or receipts lying around. 
• Sign a blank receipt. When you sign a receipt, draw a line through any blank spaces above the total. 
• Write your account number on a postcard or the outside of an envelope. 
• Give out your account number over the phone unless you're making the call to a company you know is reputable. If you have questions about a company, check it out with your local consumer protection office or Better Business Bureau.
  
  

Credit Card Fraud Prevention Tips

Internet ScamBusters' 21 Credit Card Fraud Prevention Tips:

1. Keep an eye on your credit card every time you use it, and make sure you get it back as quickly as possible. Try not to let your credit card out of your sight whenever possible. 

2. Be very careful to whom you give your credit card. Don't give out your account number over the phone unless you initiate the call and you know the company is reputable. Never give your credit card info out when you receive a phone call. (For example, if you're told there has been a 'computer problem' and the caller needs you to verify information.) Legitimate companies don't call you to ask for a credit card number over the phone. 

3. Never respond to emails that request you provide your credit card info via email -- and don't ever respond to emails that ask you to go to a website to verify personal (and credit card) information. These are called 'phishing' scams. 

4. Never provide your credit card information on a website that is not a secure site. 

5. Sign your credit cards as soon as you receive them. 

6. Shred all credit card applications you receive. 

7. Don't write your PIN number on your credit card -- or have it anywhere near your credit card (in the event that your wallet gets stolen). 

8. Never leave your credit cards or receipts lying around. 

9. Shield your credit card number so that others around you can't copy it or capture it on a cell phone or other camera. 

10. Keep a list in a secure place with all of your account numbers and expiration dates, as well as the phone number and address of each bank that has issued you a credit card. Keep this list updated each time you get a new credit card. 

11. Only carry around credit cards that you absolutely need. Don't carry around extra credit cards that you rarely use. 

12. Open credit card bills promptly and make sure there are no bogus charges. Treat your credit card bill like your checking account -- reconcile it monthly. Save your receipts so you can compare them with your monthly bills. 

13. If you find any charges that you don't have a receipt for -- or that you don't recognize -- report these charges promptly (and in writing) to the credit card issuer. 

14. Always void and destroy incorrect receipts. 

15. Shred anything with your credit card number written on it. 

16. Never sign a blank credit card receipt. Carefully draw a line through blank portions of the receipt where additional charges could be fraudulently added. 

17. Carbon paper is rarely used these days, but if there is a carbon that is used in a credit card transaction, destroy it immediately. 

18. Never write your credit card account number in a public place (such as on a postcard or so that it shows through the envelope payment window). 

19. Ideally, it's a good idea to carry your credit cards separately from your wallet -- perhaps in a zippered compartment or a small pouch. 

20. Never lend a credit card to anyone else. 

21. If you move, notify your credit card issuers in advance of your change of address.

Virtual credit card

Virtual credit cards, an invention of the European banking industry aimed at those too stupid for pet rocks, are marketed primarily through the virtual marketplace known as the Intarweb. 

Regular credit cards were enough of a scam; the bank sends clients plastic cards which likely only cost pennies for the bankers to stamp out and which aren't even real money. Once the unsuspecting client accepts the card, suddenly he starts getting bills from the bank every month for hundreds if not thousands of dollars. At that point it's too late, as the bank already has everyone's money. 

That person laughing all the way to the bank? That'd be the bank manager. Ha, ha, yoke's on you... 

Having gotten away with this, the next scam was the introduction of more new and unexplained service charges. Service? What service? Haven't seen any of that since the days of Robert Service and the Yukon gold rush. If you want to see a real human and not an automatic teller machine at a bank, good luck... banks do employ people, but they're all busy in the back rooms thinking up new service charges. 

So, if the public is gullible enough to pay ever-increasing service charges for service that is non-existent, why not take this one step further... create a banking product that doesn't exist either. 

And so the virtual card was born and launched online, on the pretext that even though it doesn't exist it could be used in e-commerce transactions where only a card number (and not the physical card itself) is required

Specialty credit cards

These types of cards are for consumers with unique needs for their credit use, such as business professionals and students. These credit card programs are designed specifically to meet the needs of those individuals. 

Business credit cards 

These cards are available for business owners and executives and have many of the same features as traditional credit cards: low introductory rates, cash back programs and airline rewards. The difference is these cards come with many additional benefits and perks exclusively for those in the business world.

Some of these bonuses include: Business expenses kept separate from personal expenses; special business rewards and savings; expense management reports; additional cards for employees; and higher credit limits.
Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying. Compare business credit cards.

Student credit cards 

Many college students need a credit card, but they generally have little or no credit history, which makes it difficult to get approved for a traditional card. Student credit cards are specifically designed for those enrolled in accredited four-year colleges and universities to help them build a credit history from the ground up. 

Compared to consumer credit cards, student credit cards are often scaled back somewhat in terms of rewards, features and other benefits, but they can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history with this type of credit card. Once they've proven financial responsibility, it will be much easier to qualify for reward cards and higher credit lines. Compare student credit cards.

Bad credit and/or credit repair cards

Credit can easily go from good to bad due to poor budgeting or simply by an overlap between jobs. If your credit score is less than satisfactory, it does not mean you cannot qualify for a credit card. There are several options available to those who have had bad credit in the past and for those who are currently trying to repair their credit. 

Depending on your specific situation, debt consolidation or use of introductory APRs on balance transfers may be wise choices. If you still need credit or want to start repairing your credit by proof of action, there are several credit cards designed to help rebuild poor credit histories.

Secured credit cards

Secured credit cards require collateral for approval. A security deposit of a predetermined amount is needed in order to secure the credit card, and the security deposit generally needs to be of equal or greater value than the credit amount. Collateral can come in the form of a car, boat, jewelry, stocks or anything else of monetary value. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history. 
Cards that help rebuild credit often come with low credit lines (such as $250) and additional fees, such as an application fee, may apply. Be sure to read over any terms and conditions for these add-on services before applying. If you use the card responsibly and pay all your bills on time, you can ask for a credit line increase down the road. The extra fees and low credit lines will be worth it if a secured credit card helps you get your overall credit back on track. Compare cards for bad credit.

Prepaid Credit cards 

Prepaid cards are not credit cards at all, but are used and accepted just like them. The advantages of prepaid cards is that there are no finance charges and they help you avoid debt since all purchases are paid for beforehand. With these cards you determine the credit line by transferring however much money you'd like to have available to spend to the card. This eliminates the risk of running up credit card debt and makes the budgeting process much easier. 
Although most prepaid cards do not charge finance fees, other fees may apply, including monthly fees, startup or application fees, over-limit fees, ATM fees, reload fees and more. Be sure to thoroughly look over the terms and conditions for each specific card before applying. Compare prepaid cards.